Successful real estate investors all over the world know that in order to find and buy the best rental properties, they need to make some research in advance. Real estate market analysis is a very popular method when it comes to investigating potential real estate investments. However, with the development of technologies, some new tools come in use in the real estate world. Such a tool, for instance, is the investment property calculator. It is widely known that the investment property calculator eliminates the need for real estate market analysis. “Why is that so?”, you may ask. In order to answer your question, we will go deep in exploring what real estate market analysis is. Additionally, we will review the investment property calculator. Last but not least, we will compare the two research methods. If you are eager to learn more on this real estate topic, keep on reading.
#1 What Is Real Estate Market Analysis?
Real estate market analysis is, simply put, the gathering of data for various real estate investments and analyzing it later. The aim of conducting such analysis is getting insightful information about a chosen investment property, its surroundings, the supply and demand in the area, etc. Moreover, real estate investors can review how the chosen rental properties are performing in the current market. Additionally, such type of analysis is useful when a real estate investor is trying to sell his/her property. Further, real estate market analysis can be extremely helpful in choosing how much to charge for your rental properties. The latter is extremely important. This is because the setting the rent properly is the way to have your property occupied and receive a profitable rental income at the same time. It is important to note that there are two types of real estate market analysis: qualitative and quantitative. As the qualitative approach deals with the features of the building and its surrounding area, the quantitative one, on the other hand, presents the computation of various real estate metrics: return on investment, cash on cash return, cap rate, etc. There are several steps which real estate investors need to follow in order to conduct real estate market analysis:
- Analyzing Real Estate Investments
This means exploring in detail the property you are willing to buy or sell. It is necessary to take in mind its location and surroundings as well. Do not forget to also consider the features of the building. These include the number of bedrooms and bathrooms, the living area footage, and any other additional characteristics. Mashvisor can provide you with information on real estate comps, depending on the location and property of your choice.
- Identifying Real Estate Comps
An essential step in conducting real estate market analysis is identifying the real estate comps. Real estate comps are recently sold properties with similar characteristics to the property of your interest. Such properties are used to determine the adequate market value of a real estate property you want to sell or one you are willing to buy. Additionally, they might be a guide in choosing your rent charge as it is typically between 0.8% and 1.1% of the market value of the rental property. Thus, such analysis might play a significant role in receiving a constant and cost-effective rental income.
- Check Pending as Well as Expired Listings
Pending and expired listings can give you an idea about unsuccessful real estate strategies. By exploring them, you can easily make conclusions regarding the investments you are actually interested in.
#2 What Is the Investment Property Calculator and Why Does It Eliminate the Need of Real Estate Market Analysis?
The investment property calculator is a recently developed real estate tool used by many successful real estate investors. The main advantage of the tool over real estate market analysis is its efficiency. Without the need for data gathering, using spreadsheets, and taking multiple steps in order to compute real estate metrics such as cash on cash return, cap rate, and return on investment, the tool does all the work in a couple of seconds. In this way the real estate investor can conduct analysis anytime, anywhere. Additionally, he/she can carry the results without any problem and use them as a reference point, when needed. Besides all this, the tool eliminates the mistake of making an involuntary error when computing the numbers. Thus, it provides you with accurate results and detailed information in no time unlike real estate market analysis which require multiple steps in order to achieve the best results possible.
Mashvisor’s investment property calculator, for instance, does so much more than simply computing the cap rate, cash on cash return, return on investment, and potential rental income. Mashvisor’s investment property calculator can provide you with detailed neighborhood analysis as well as in-depth investment property analysis. This is yet another reason to use this tool instead of real estate market analysis. Additionally, the tool provides you with numbers regarding the occupancy rates, the median property price, etc. Further, it indicates the optimal rental strategy for your investment property. It also indicates whether or not a neighborhood is a good area for real estate investments. Last but not least, the investment property calculator, provided by Mashvisor, enables you to choose a financing method. In this way, you will get more precise results in no time.
With all the factors above, it is easy to conclude that the investment property calculator eliminates the need for real estate market analysis. The reason behind this is the fact that the tool provides faster and more accurate results. Furthermore, it offers additional useful information which the real estate investor can use in his/her investment strategy in order to be more successful and make money in real estate.
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