Table of Contents
- How to Calculate if a House Is a Good Deal for Investment
- What’s the Best Real Estate Calculator App for Identifying Potential Investments?
- Final Tips Before Making an Offer on Your Investment
With the incredible advances and upgrades in the ways in which we manage our day-to-day lives, we are beginning to use technology as our basic auxiliary tool. Lately, we’ve witnessed the tremendous utility of technology in the investment industry.
The real estate calculator app is slowly but surely becoming an indispensable tool for future investments. The main idea of a real estate app is to facilitate the process, provide accurate information, and save investors some time.
And on that note, Mashvisor’s real estate calculator app checks out all the boxes. It pulls data from numerous sources, assists investors in their journey, and searches for the next profitable investment location.
To learn more about the features of this real estate app and why it’s a must-have in your real estate kit, keep reading.
How to Calculate if a House Is a Good Deal for Investment
Before real estate calculator apps became a crucial part of the investing business, real estate investors were limited to the “traditional” methods of finding deals.
However, such a method of assessing whether your desired real estate investment is profitable or not took up a lot of the investor’s time and energy. At times, it was unreliable, too.
Here’s what they had to do:
Research the Market Traditionally
The lack of development and limited access to investment tools left investors with only one way of researching the real estate market: their own ties and connections with other agents in the business.
Until real estate blogs and dedicated websites took the spotlight, it was the primary means of gathering information about a specific real estate property.
And even though the approach offered some advantages—such as face-to-face interactions and seeing the property first-hand—it also took a significant amount of time.
What’s the situation like today?
The introduction of real estate calculator apps has enabled real estate investors to view and “visit” multiple locations virtually—and conduct full property research from the comfort of their own homes.
Calculate the Gross Rental Yield
Once the investor has discovered a potential real estate investment property, their next step would typically be to calculate the rental yield.
In essence, the rental yield represents the amount of money the investor makes on their real estate property. It’s specified by measuring the gap between the overall costs (expenses of the property) and the income the investor generates from the property.
In essence, it offers the investor a better insight into the potential returns on their investment, which, as you’d hopefully agree, is a pretty important factor in this industry.
So, here’s how investors would calculate their gross rental yield manually without using the apps available today:
- Step 1: Sum up the annual rent you would charge your tenant/s.
- Step 2: Divide the annual rent by the value of your property.
- Step 3: Multiply the number you get by 100.
The number you get represents the percentage of your gross rental yield.
Now, doing it without an actual real estate calculator to double-check your math might end up giving you an answer that is not entirely accurate.
What is considered a good rental yield, though?
It’s a seemingly simple question, yet the answer is pretty complex. It depends on the real estate property that you plan to buy—and where. Different real estate markets will value the investment properties in the area quite differently.
In any case, it’s crucial that you don’t overpay for your real estate investment.
Calculate the Capitalization Rate
The capitalization rate—or cap rate—represents a metric that real estate investors are often guided by when trying to estimate their future purchases. In essence, it helps real estate investors calculate the potential return on their investment.
The important thing to note is that it works regardless of the chosen real estate strategy—be it rental or BRRRR, the cap rate will give you an overview. Although it’s recommended to use other metrics, it is the most commonly used in real estate investing.
The capitalization rate formula is as follows:
Cap Rate = Net Operating Income / Property Value
Calculate Cash Flow
Another important step that real estate agents used to do in a “traditional way” is calculating cash flow.
We can tell you one thing right off the bat:
Manually calculating the cash flow of a real estate investment might not necessarily be a simple process—especially if more than one investment property is involved.
Cash flow implies the inflow and outflow of cash in the real estate business. For instance, a positive cash flow refers to the net amount of money an income property generates after expenses and liabilities. It’s what you should aim for, of course.
The good news is that nowadays, investors can calculate cash flow in real estate using the rental cash flow calculator app. It significantly simplifies the process and, more importantly, enables accurate results.
If the investor, however, chooses to go with the traditional method, the formula to calculate free cash flow is given below:
Free Cash Flow = Net Operating Profit After Taxes − Net Investment in Operating Capital
What’s the Best Real Estate Calculator App for Identifying Potential Investments?
By a long shot, Mashvisor is the best real estate calculator app that every investor should use. The app ensures reliability, up-to-date information—and access to $226.8bn worth of US properties.
Entering the US real estate market means juggling affordability, profit, and opportunities. And all of them become much easier with Mashvisor’s real estate calculator app by your side.
Here are a few reasons why our calculator app is best-suited for investors:
A User-Friendly Interface
The thing that sets our calculator app apart and makes it one of the best real estate apps out there is its user-friendly interface. In other words, investors who choose to use it won’t find it difficult to navigate the site—or the app itself.
The layout is kept simple and straightforward. There is no confusion or unnecessary options that will distract the investor. And if you make a mistake entering data, you can always return to point A of the app, enter your data again, and start over—no harm done.
Mashvisor’s team is well-aware of the primary reason real estate investors are looking to use the calculator app—to locate a property and conduct a thorough analysis.
Everything else is pretty easy to locate as the website is easy to navigate for all types of users—from beginners to experienced investors.
Data Accuracy
One of the best characteristics of a real estate calculator app is data accuracy.
You need to be able to rely on accurate and up-to-date data on the app you’re using. It’ll significantly facilitate your decision-making process when assessing an investment property.
Juggling information that you collected without some form of verification will not bring you anything—and it certainly won’t tell you how profitable your investment really is.
And precisely for this reason, the “traditional” way of calculating the profitability of real estate investments is a thing of the past. Real estate calculator apps have replaced the manual method of doing the math. For that, we have to thank the Mashvisor app and the advancement of technology that allowed it to happen.
Our calculator app is based on one of the most extensive, accurate, and precise databases. It is regularly updated, and its data is gathered exclusively from verified and trusted sources, such as Zillow, Realtor.com, Airbnb, and many others.
If you’re looking for a dependable and up-to-date real estate calculator app, look no further; Mashvisor has you covered.
The calculator app also allows investors to locate several prospective properties at a time and present information, making the data analysis process much more reliable than the other available apps.
Efficient Tools
One can argue that real estate investors considering using our calculator app are most interested in its specific functions. What sets Mashvisor apart as one of the best calculator apps in the business are the following features:
- Property price
- Traditional or Airbnb rental income
- Traditional or Airbnb cash on cash return
- Traditional or Airbnb occupancy rate
- Start-up costs
- Monthly expenses
The specific functions above—and the fact that you’ll be able to see the value and potential costs of your future real estate investment up close—is what sets Mashvisor’s tools apart from the competitors.
Mashvisor’s real estate calculator app lets investors see a property’s value and potential costs of their real estate investment up close.
Budget-Friendly
And lastly, when talking about any real estate calculator app, we can’t fail to mention the cost of using the app. Once again, Mashvisor manages to stand out from the rest here, giving the investor a chance to use many different services at an affordable price.
More specifically, Mashvisor offers three different plans:
- The Lite Plan ($17.99 a month)
- The Standard Plan ($49.99 per month)
- The Professional Plan ($74.99 a month)
With the specific plan you choose, different features will be offered within our calculator app. It goes without saying that each package offers special benefits, as well—and it is up to the investor to decide which one is best suited for their needs.
Mashvisor’s affordable pricing plans for its real estate calculator app allow investors to use its different services and features.
Final Tips Before Making an Offer on Your Investment
Before you start—or even in the process of using a calculator app—there are some things you should note. They’ll help you make a smart and well-calculated decision before making your final offer on the investment property:
Get Pre-approved
Once you’ve potentially located the next real estate investment opportunity by using a calculator app, it’s time to consider how you’ll finance your venture.
Or, in other words:
If you don’t have the means to fund the investment right now, we encourage you to talk to your lender and, if possible, get pre-approved for a mortgage.
On that note, using a real estate calculator app can help you get a hold of the ratio between your current financial situation and the value of the property.
Set a Budget
It’s essential that you set a budget before you make an offer on your future investment property.
For real estate investors going into this business, it’s absolutely necessary that they use the proper tools—mainly the real estate app calculator—and have an idea about their budget.
Of course, it’s generally preferable to have a bit more money set aside. It will be helpful in case any unforeseen circumstances arise and you end up spending more than you originally anticipated.
And again, a real estate calculator app can help you navigate such calculations and estimate how much money you will need for your investment venture.
Save for a Downpayment
Since calculations, estimates, and your future expenses are the main focus of today’s article, it is important to discuss the downpayment for your future investment property, too.
Unless you’re financially stable enough to pay in cash, chances are you’ll usually need to set aside at least 20% of the full purchase price as a down payment. It is to avoid applying for private mortgage insurance.
It is another important step where using a real estate calculator app can be pretty helpful.
Conclusion
We’ve covered the topic of real estate calculator apps designed to assist investors in developing a solid real estate strategy. Using a real estate calculator app, you can pin down the next location for your investment.
Now, here are the key takeaways.
Considering the major technological advancements, the process of “traditionally” assessing the potential profitability of a real estate investment is slowly dying out. As a reliable substitute, investors now use real estate calculator apps to help them complete the process quickly.
In the traditional method, investors needed to use the data they collected themselves. They also had to rely on some connections that might not be up-to-date. With real estate calculator apps, that’s not the case.
Our calculator app, for example, packs all the benefits within one easy-to-use software. It provides accurate information, calculation speed, and the possibility to access the entire US housing market, all in one place.
The calculator app gives real estate investors some security and confidence when navigating the housing market.
Lastly, our calculator app can also be useful in the later stages of the investment journey. You can rely on it when saving up money for a downpayment, drawing up a budget, and making an offer.
In short, Mashvisor’s real estate calculator app can guide you throughout your investment journey.
With the help of Mashvisor’s reliable tools, investing in real estate is easy. By using our Property Finder tool, investors can rest assured knowing that they can access the entire US housing market in one place. Our tool is designed to help them pin down their next real estate investments—in a matter of minutes.
Sign up for Mashvisor now and get 15% off.