Rental Property Calculator: Calculate Investment Property ROI

Mashvisor’s rental property calculator has made real estate investing easier than ever. But what is it and what does it do for investors?

As a real estate investor, one of your jobs to succeed in the business is to evaluate an investment property before buying it to ensure that it will be profitable. A beginner investor might ask: How can property investors do that?

Table of Contents

1. What Is a Rental Property Calculator?
2. Why Does Every Real Estate Investor Need a Rental Property Calculator?
3. What to Look for in a Real Estate Investment Calculator
4. Mashvisor’s Rental Property Calculator: What Does It Calculate?

They need a real estate investing tool that provides them with all the numbers, metrics, and calculations necessary to analyze the potential of a long term or short term rental property. Since the real estate industry is constantly evolving in this digital age, investors need to keep up with the changing demands and be prepared with the needed resources.

It is the only way to achieve success in such a highly competitive industry. Here is where the rental property investment calculator comes in handy as the most comprehensive tool for analyzing rental properties for sale.

In this article, we will look at what the tool is, its features and capabilities, and how it can help investors make smarter, faster, and more efficient investment decisions. Moreover, we will find out the best rental property calculator currently available in the US market. To avoid suspense, we will let you know that this is Mashvisor.

So, relax and keep reading in order to learn everything you need to know about optimizing your income property investments for maximum ROI—with or without a mortgage!

What Is a Rental Property Calculator?

The rental property calculator—also known as an investment property calculator—is an online tool that helps real estate property investors make smarter and more profitable decisions. All an investor needs to do is input some basic information about a real estate investment property, such as the purchase price, the financing method, and the cash investment.

The tool then provides them with all the crucial numbers necessary to decide whether or not to go for this income property. In short, it helps you determine whether a rental property that you want to invest in can be profitable or not.

Furthermore, the best real estate investment calculator doesn’t even require investors to enter any numbers. Instead, it collects real estate and rental data from various reliable sources. It then works with the said data to forecast the performance of any residential property in the US housing market.

It means that even beginners can easily use the real estate investing app and start generating passive income in no time. The only information they’ll need to put in is related to their preferred rental strategy, budget, and financial preferences.

Why Does Every Real Estate Investor Need a Rental Property Calculator?

As one of the most important tools coming out of the recent surge in real estate technology advancements, using a rental property calculator comes with many important benefits. Just saying that such a tool optimizes the decision-making process for real estate investors is not enough. You need to understand how exactly it is done.

So, let’s look at what access to an investment property calculator allows investors to achieve:

Saving Time and Effort

Before the emergence of the rental property calculator, real estate investors used to spend weeks on different tasks. They include collecting data on the real estate market and investment properties and calculating all the necessary numbers. Other tasks involve coming up with the expected rental income, expenses, and profit from the targeted rental property.

Now, the real estate calculator automates the processes of real estate market analysis, rental market analysis, and rental property analysis. As a result, with Mashvisor’s rental property calculator, the entire journey of finding the investment potential of a rental property for sale can be done within minutes.

Thus, such a tool adds a lot of convenience to the life of a real estate investor. It truly takes real estate investing to a new level. With a rental property profit calculator, investors do not need to spend a lot of time researching data or going over numerous Excel spreadsheets. It is helpful not only for beginners but also those with extensive experience in the industry.

A rental property tax calculator comes in handy, as well as it supports investors in dealing with required tax payments. When done manually in Excel, figuring out taxes can be tedious and time-consuming. But now, the Mashvisor platform provides estimates of local property tax and rental income tax and factors them into the resulting investment property analysis.

Making Informed and Reliable Investment Decisions

Accuracy and comprehensiveness are other reasons why every real estate investor needs such a helpful tool as the rental property calculator.

First and foremost, powered by AI and machine learning algorithms, a tech tool can gather and analyze much more data than a human possibly can. That’s why it provides nationwide market coverage, while investors need to focus their investment property search and analysis on no more than a couple of locations.

Moreover, it means that all the analysis done by this tool will be based on the performance of comparable long term and short term rental properties, also known as rental comps. It makes the provided numbers and estimates highly accurate and reliable as they offer a comprehensive overview of the local rental market.

In addition, there is always the risk of making a mistake when calculating by hand or when using an Excel spreadsheet. With so many factors to consider and figures to look into, errors can happen, especially when data collection and analysis are done manually. And the impact of these errors can quickly multiply on an Excel spreadsheet.

Thanks to technological advancements, real estate investors can use digital tools to reduce mistakes and make the process easier and more efficient.

Mashvisor’s rental property calculator uses traditional and predictive analytics, as well as comparative and historical data. This way, it provides real estate property investors with the most accurate results, eliminating the risk of making a decision based on wrong calculations.

Outperforming the Competition

The final reason why investors—both beginner and experienced ones—should get a hold of an investment property calculator is that that’s the only way to beat the competition. In 2023, all investors in your local market will be able to access some sort of an investment tool, whether the best one or not.

It means that you cannot expect to win against the competition unless you also use an online calculator. If you opt for the traditional way of investing in real estate, all good long term and short term rentals for sale will be gone before you are able to analyze them.

Overall, every real estate investor needs a rental property calculator because it allows them to make smart investment decisions and stand a chance against the competition. What used to be a manual process (including complicated Excel spreadsheets) that is time-consuming and error-prone is now made more accurate, profitable, and efficient by using this digital tool.

To get immediate access to the best rental property calculator in the US market, sign up for a free 7-day trial of Mashvisor now.

What to Look for in a Rental Property Calculator

There are so many rental property calculators available nowadays, but not all are the same and serve the same purpose. When choosing the best real estate investment calculator tool, investors should focus on the following features and capabilities:

• Integration of tools that help find profitable investment properties: What you need is an all-in-one real estate calculator. You need one that enables you to search for investment properties for sale and analyze multiple properties faster and more efficiently.
• Estimates of all relevant rental data: It takes a long time to do your own real estate market research and analysis. You need a reliable calculator that collects all the necessary information and analyzes it for you. It should show rental income, cost, and occupancy rate estimates for each property listing in a particular area.
• Features to calculate ROI: You need a real estate investment ROI calculator that can provide details such as rental occupancy rate, real estate cash flow, cap rate, and cash on cash return. It should also enable you to add information, such as property value, down payment, loan information, tax, and landlord insurance, to the ROI calculation.
• Auto-generated real estate comps: Look for a calculator that covers real estate comps specific to the real estate investment that is for sale. Comps refers to similar properties that recently sold, as it helps evaluate the fair market value of the property under investigation. It also lets you compare real estate comps of different listings.
• Rental analytics: Another feature to consider is traditional and Airbnb analytics to help you understand rental strategies. In 2023, when investors will resort to different ways of renting out properties, it pays to understand them all to make better decisions.

Mashvisor’s Rental Property Calculator: What Does It Calculate?

Mashvisor’s property profit calculator provides real estate investors with a few different numbers they need in order to decide whether a rental property for sale is a good opportunity. The most important metrics made readily available by our analytical tool include the following:

Rental Income

The rental income is the monthly revenue that investors are able to generate from their investment property. For long term rentals, the rental income is equivalent to the monthly rental rate. Meanwhile, for short term rentals, the rental income, also known as Airbnb revenue, is the daily rate multiplied by the occupancy rate measured in days.

Knowing what rent to charge for a rental property is tricky as it depends on the location, the current market state, and the local economy, as well as the supply and demand for rentals. Meanwhile, setting the right rate is crucial for optimizing occupancy and ROI, whether looking at cap rate or cash on cash return.

The Mashvisor rental property calculator tells investors how much they can expect to make from their income property based on the performance of similar rentals in the area.

Rental Expenses

Another metric that’s key for the performance of a long term or short term rental property is the costs associated with owning and renting out the property. They include both the initial startup expenses and the recurring monthly costs.

The investment property calculator available on the Mashvisor real estate investment platform provides estimates of both. The startup costs include inspections, repairs, furniture, appliances, and closing costs. The recurring expenses include homeowners insurance  for rental property, property tax, rental income tax, property management, utilities, cleaning fees, and HOA dues.

Both sets of values are preset based on the prevailing values in the local rental market. However, the investor can adjust each individual cost if they expect different results because of unique circumstances. Also, new values can be added if an investor incurs additional costs like marketing, for example.

In addition, Mashvisor features a mortgage calculator where investors can check how different mortgage types affect their cash flow and ROI. The related metrics include the property price, the down payment, the mortgage type, the loan term, and the interest rate. Once again, they are all customizable.

Changing any cost estimate results in the automatic recalculation of all other real estate metrics. In other words, the Mashvisor rental property calculator is highly interactive and adaptive to the specific situation of each investor.

Cash Flow

In simple words, cash flow is the difference between the monthly rental income and the monthly expenses of a real estate investment property. The cash flow figure can be positive or negative. Obviously, as a real estate investor, you always want to invest in positive cash flow investment properties.

Negative cash flow means that the expenses exceed the profits, which boils down to the fact that you’re actually losing instead of making money from your income property.

Mashvisor’s rental cash flow calculator provides property investors with cash flow details after adding all the numbers, including rental income and rental expenses. Thus, with just a few clicks of a button, even beginner investors can make sure that their property is going to make money and not lose money.

Return on Investment 

The main reason real estate investors conduct a rental property analysis is to determine the profitability potential. This is mainly indicated by return on investment. The two key ROI metrics are cap rate and cash on cash return. These calculations can be very difficult to do manually, especially when analyzing multiple rental property investments. However, with Mashvisor’s cash on cash return calculator and cap rate calculator, in 2021 you can access readily available estimates of these ROI numbers.

Our return on investment calculator also has an inbuilt investment property mortgage calculator. This interactive feature allows you to calculate your potential cash flow and cash on cash return based on the mortgage information you put in. This includes property price, loan amount, mortgage type, loan term, down payment, and interest rate.

Cap Rate

Another important metric that the Mashvisor calculator can provide is the capitalization rate or cap rate. It is the ratio of the net operating income (NOI) over the property’s purchase price or current market value. While the cap rate is relatively easy to calculate, it doesn’t take into account the method of financing, so it should be used in conjunction with other ROI measures.

Moreover, if you want to compare a few potential markets and a few rental properties for sale, things can get complicated when calculating the cap rate. That’s why it’s a brilliant move to rely on a rental property calculator when doing capitalization rate calculations. Mashvisor’s tool provides readily calculated cap rates for thousands of investment properties in the US.

All you need to do is to look for properties with a good cap rate of 8-12%. Going below the 8% mark means you are not optimizing the performance of your investment property. Alternatively, going above the 12% mark entails too much risk, as the cap rate also measures the level of risks associated with a specific income property.

Cash on Cash Return

The cash on cash return is the annual cash flow before tax over the total cash investment. Calculating the CoC return means real estate property investors can determine the expected profits they’d make whether they pay for the income property all in cash or with a mortgage loan.

The fact that it factors in the financing method differentiates the cash on cash return from the cap rate, making the former the most comprehensive measure of the rate of return in real estate. However, this fact also makes the CoC return metric complicated to calculate, especially when choosing between different markets and properties.

So it’s even more important for an investment property calculator to include the CoC figure in its analysis. The good news is that Mashvisor’s rental property calculator provides real estate property investors with the cash on cash return for investment properties for sale across the US. Just keep in mind that a good cash on cash return is usually above 8%.

Mashvisor’s Special Features

The Mashvisor rental property calculator comes with several special features, which include:

Neighborhood Analysis

What makes Mashvisor’s rental property calculator different from other available online tools is that it provides real estate investors with all crucial numbers at the neighborhood level. It is in addition to the property-level data and analytics.

The metrics include the median property price, average square foot price, average rental income, average Airbnb occupancy rate, and average cash on cash return. Moreover, investors can see the number of investment properties for sale in the area, as well as the number of existing long term and short term rental listings.

Other metrics that the calculator provides are the Walk Score, the Transit Score, and the Bike Score, all showing how attractive a neighborhood is for tenants and Airbnb guests.

Last but not least, the calculator defines the better rental strategy for the chosen neighborhood, as well as the Mashmeter score. The latter measures the overall attractiveness of an area for investing in rental properties.

Moreover, the Mashvisor neighborhood analysis pages provide nationwide coverage, including all areas in the largest cities and the smallest towns. All in all, real estate investors can use solid long term and short term rental data to compare different neighborhoods and choose the best one for their real estate investing strategy.

Rental Property Analysis

After offering all necessary neighborhood information, Mashvisor’s rental property calculator will give real estate investors even more insights into the potential of specific properties.

Mashvisor allows investors to conduct thorough rental property analysis on the hundreds of thousands of MLS listings and off market properties available on its platform. But that’s not all. You can also enter the address of any residential property you have in mind in the US market, and the Mashvisor calculator will perform an analysis on it as well.

The property-level analysis includes the following data points:

• Listing price
• Average price per square foot
• Comparable rental income
• One-time startup costs
• Monthly expenses
• Cash flow
• Cash on cash return
• Cap rate
• Occupancy rate

All rental data and analytics are based on the performance of actual rental comps in the same market. However, numbers are customizable, so investors can easily change them if they plan to manage their property in a way that will yield different results from their competitors. As soon as any value is changed, all other metrics will be automatically recalculated.

Optimal Rental Strategy

In real estate investing, one factor that determines how profitable an income property will be is the rental strategy. Property investors can rent out their investment properties either on a monthly basis as long term rentals or on a daily basis as short term rentals.

Each rental strategy comes with different rental income, expenses, occupancy rate, cash on cash return, and cap rate. To decide which rental strategy is optimal, a rental property calculator is needed.

Mashvisor’s tool also helps real estate property investors choose the optimal rental strategy for the income property.

How?

Easy!

Mashvisor’s investment property calculator provides the same level of analysis for the property being rented out on a long term and short term basis. It allows investors to see which rental strategy yields the better cash flow and cap rate in order to optimize their ROI.

Based on the real estate investor’s input, in addition to the neighborhood and property analysis, Mashvisor will tell you which rental strategy is the most profitable for your specific situation.

Best Neighborhood Search

The real estate heatmap tool, available with the Mashvisor calculator, allows investors to find the best areas for investing in either short term or long term rental properties in any market. The heatmap is a color-coded diagram of a city that shows the high, medium, and low values for the following averages:

• Listing price
• Rental income
• Cash on cash return
• Vacation rental occupancy rate

The heatmap tool helps investors locate a few areas with affordable property values and good rental income and return on investment. Then, they can move to the neighborhood analysis pages to deepen their research and analysis.

Top Rental Property Search

The Mashvisor rental property calculator helps you not only analyze the potential of rentals but actually look for available investment properties for sale that match your criteria.

On the Mashvisor investment property search engine or Property Finder, you can enter your exact requirements. They can include location, budget, preferred rental strategy, rental income, ROI, property type and size, etc.

Once you’ve done that, you will get a comprehensive list of all available properties for sale that match your criteria. It is a combination of MLS listings and some off market opportunities.

For each property, you will get the same level of investment property analysis as discussed above.

Mashmeter

The Mashmeter is a score that simply tells real estate investors how good or bad a neighborhood is for real estate investing, presented as a percentage. The score is uniquely developed and calculated by Mashvisor, relying on AI and machine learning algorithms, and is a number that no other calculator provides.

The Mashmeter allows rental property buyers to compare neighborhoods they’ve never seen or visited. The score is just one of the features of the Mashvisor rental property calculator that puts beginner investors on an equal footing with those with decades of experience in the field.

Getting Started With the Best Rental Property Calculator

Are you a beginner in real estate investing? Or an experienced real estate investor? Whatever expertise level you’re in, it takes a great deal of research, skills, and determination to be successful in the property investment industry. There are so many factors to consider and data to analyze. It can be challenging and overwhelming at times.

The good thing is that there are also a lot of resources—online and offline—to guide you and help you expand your knowledge which is essential in this evolving industry. It is also wise to take advantage of available tools to make the whole process easier, less stressful, and more efficient. The most important one of them is the rental property calculator.

The best investment property calculator in the market will help you search for and analyze both profitable markets and top-performing rental properties for sale. It will obtain data from reliable sources and rely on rental comps for its analysis. It will help you choose the optimal rental strategy for your location and property.

If you’re still wondering where to find such a tool, the answer is right here at Mashvisor. For all the reasons we’ve listed below, Mashvisor has the best rental property calculator in 2023.

But don’t just take our word for granted.

Click here now to start your 7-day free trial of Mashvisor to ensure that our calculator checks all the boxes for you.