Mashvisor Real Estate Podcast: Episode #20 (Transcript)

Top 5 Rental Properties This Week: June 13th-19th, 2021

In the twentieth episode of the Mashvisor Real Estate Podcast: Top 5 Rental Properties This Week Mike Richardson, the star of the Mashvisor Investor Consultant Team, presents and analyzes the 5 top-performing traditional and Airbnb investment properties currently available for sale in the US housing market. These properties are handpicked by Mike to generate positive cash flow, high cap rate, and outstanding cash on cash return.

Real Estate Podcast Transcript

This is the Mashvisor Real Estate Podcast: Top 5 Rental Properties This Week, Episode Number 20. Hey, guys! This is Mike Richardson, Senior Investor Consultant and Product Specialist at Mashvisor. It is my great pleasure to welcome you back to our real estate investing podcast: Top 5 Rental Properties This Week. We are now at episode number 20. And once again, we’ll be looking at some of the absolutely more lucrative deals in the US market that are currently available for sale. These are properties that outperform not only their local market but the US market in general as well. This week marks the last day of school for the academic year, and you know what this means. People will now be listing their homes for sale to make their move while kids are off from school. The health authorities are relaxing more and more restrictions as the vaccination rates are increasing. This is expected to bring some comfort to the residential real estate market flexibility. Currently the market is a hot, seller’s market, all across the country. Inventory is low everywhere. Demand is high, especially in the best locations for investing. Prices are on the rise. And the mortgage rates are expected to start going up too. What all this means for real estate investors who want to buy a new investment property is that the next few weeks will be the best time to do that. When supply increases from all these new listings by families. And before property prices and interest rates get too high. So, if you’re thinking of investing in a rental property this year, you probably already know that location is one of the most important factors. Where your property is located will determine the price you need to pay, the start-up costs, the recurring expenses, the rental income that you can expect, and ultimately your return on investment. That’s why this week I looked at some of the absolutely top destinations for investing in real estate at the moment. As always, I used the Mashvisor platform to look at different markets that I know perform well for rental properties. I searched for different property types and price points because I know that each investor has a different budget and different preferences. I was able to find for you four Airbnb properties and one traditional rental property. But, guys, these properties that I have for you today offer such a high return on investment that you don’t see every day. So if you like any of these properties, if you think that any of them could be the right fit for you and for your rental strategy, make sure to check them out right away. You can find a link to each property in the show notes below. The link will take you to the property listing on our website. There you’ll find all the standard information that accompanies a property listing. You’ll see the exact property address, the number of beds and baths, the size of the property, and of course a detailed property description with the features and amenities. But that’s not all. What sets Mashvisor apart from all the other real estate analysis platforms out there is that we’ll help you determine the analysis for each property and its potential for both rental strategies, if it will be best for Airbnb or traditional. You will see what initial costs you can expect, monthly expenses. You will also see an estimate of the rental income, occupancy rate, cash flow, cap rate, and cash on cash return. The most important part is that all these numbers are based on the performance of similar, comparable rental properties in that area. We at Mashvisor gather real estate data from dozens of reliable sources before we apply our machine-learning algorithms to it. That’s how we are able to provide you with the most trusted real estate analytics in the US residential real estate market. And we’ve been able to turn 3 months of real estate search and analysis into just 15 minutes. So, guys, one last thing before we get started with the top 5 rental properties for this week. I want to assure you that Mashvisor is not involved in the sale of these properties or any other real estate properties. We are not a brokerage. We are a real estate data analytics software, and as such we help you search for profitable rental properties and analyze their investment potential with a few clicks of a button. So, let’s take a look at the best real estate investing opportunities currently available for sale: First on our list is in the City of Chicago. You probably don’t need convincing why Chicago has always been one of the best places to invest in real estate in the US. With a population of about 3 million people, Chicago is the largest city in the State of Illinois and the third most populous city in the US. And you know what a large population means – it means a strong demand for traditional rental properties as not all these people will be able to buy a home. Indeed, according to NeighborhoodScout, 56% of the population rents, which means over a million and a half renters in the City of Chicago. Chicago has one of the strongest and most diversified economies not only in the US but also worldwide. This means that more and more people are moving to Chicago each year and looking for places to rent. The strong economy also means that tenants are able to pay rent on time and in full, which is very important for landlords. In terms of property prices, the median value is $479,000, which is not bad for a major city. If you’d like to buy an investment property in a big city which will never go down, Chicago is a top choice. The property that we have for you today is a townhome. The address is 2535 West Monroe Street, and that’s in Chicago, Illinois 60612. The asking price is $235,000, offering you 3 beds and 1 bath, 1,120 square footage.

The potential rental income for this property is $1,830. With your recurring expenses at $546, your expected cap rate is at 6.56%. You’ll also have a very high occupancy rate of 92% with this rental value. If you’re deciding to finance, you can easily put 20% down on a deal like this. That will be around $46,000 upfront. Your monthly mortgage will be $772. Your cash flow will turn into $412, and your cash on cash return will be 11.31%. This is a stable and strong rental property that you can depend on. It’s a property that if you’ve considered looking for traditional investments, it’s rare to find this type of realistic rates of return. So I would highly recommend that you explore this option. This could be a great fit for you. Next on our list is in Flagstaff, Arizona. Flagstaff is a medium-sized city in the State of Arizona. It’s surrounded by mountains, pine forests, and deserts, which makes the nature really unique. Flagstaff is a gateway to Arizona’s tallest mountain as well as the Arizona Snowbowl ski resort. That’s why the city is a popular destination both in the summer and the winter. This is reflected by the exceptionally high average Airbnb occupancy rate. We at Mashvisor have been able to estimate the average Airbnb occupancy rate at 77%. In terms of affordability, the median property price is $563,000 at this moment. This is almost double the national average but is still below the values in other top locations for investing. Short-term rentals are fully legal in the local market but are regulated, and you need to pay taxes. You can choose whether to manage your Airbnb property on your own or to hire a professional manager for a smoother process. The property that we have for you today is a townhouse. The address is 1650 E Jacob Way, Flagstaff, AZ 86001. The asking price is $429,999, offering you 4 beds, 3 baths, 1,598 square footage.

The property is a new-looking, great, renovated property. It’s been on the market for not too long. It’s located in a great part of town. No wonder the occupancy rate on this property is extremely high. The average Airbnb occupancy rate in this zip code is 84%. The potential rental income for this property is $5,640. Its recurring expenses are $2,384. So we’re looking at a great property that offers you outstanding rates of return for an Airbnb. You can expect a cap rate of about 9.09%. If you decided to finance a deal like this and put 20% down, your monthly mortgage will be around $1,413. That puts your cash flow at $1,843 and your cash on cash return at an extremely lucrative level of 23.85%. These are very rare deals. So if you’ve considered investing in the State of Arizona, you’re looking for unique markets that have extremely strong Airbnb occupancy rates, this is a property that you should absolutely check out. So if it sounds like a fit for you, check out the property in the show notes below. Next on our list is in Gulf Shores, Alabama. Gulf Shores is a city on the Gulf Coast of the State of Alabama. This small town is a popular tourist destination. The main attractions include the Gulf State Park, the beaches, the trails, the golf courses, the natural beauty, the culture, and the history. Visitors are able to spot sea turtles as well as different migratory birds. The close-by Alabama Gulf Coast Zoo allows you to meet kangaroos, sloths, and other different types of animals. That’s one of the reasons why Gulf Shores is a favorite destination for families with children. So, Gulf Shores is a perfect location for investing in an Airbnb property for savvy investors. Importantly, short-term rentals are legal. As an Airbnb host, you are expected to pay some taxes, but these are collected directly by the Airbnb platform, which makes the process much easier and more efficient for hosts. The property that we have for you today is a single-family home. The address is 1485 W Lagoon Avenue #205, and that’s in Gulf Shores, AL. The zip code is 36542. The asking price is $575,000, offering you 4 beds, 3 baths, 2,659 square footage.

The average Airbnb occupancy rate in the market is 73%. The potential rental income for this property is $7,150. With your recurring expenses including a local management company at $2,600, that puts your cap rate at 9.49% and your occupancy rate at 76%. Deciding to finance a deal like this. If you’re putting 20% down on a property like this, your monthly mortgage will be around $1,886 and your cash on cash return at an extremely lucrative level of 25.91%. Again, that’s 25.91%. You don’t see deals like this for a traditional investment. It’s rare that you can even find Airbnb that generates this type of returns. So I will highly, highly recommend investors to look at this property if they’ve considered investing in states like Alabama. Next on our list is in Crestline, California. Crestline is one of these hidden treasures in the California real estate market. It might not be the first place that you think about for rental properties, but it’s one of the most profitable locations for Airbnb rentals in the summer of 2021. The geographical position and the nature of Crestline is what makes it such a popular destination among travelers. It’s located in the San Bernardino Mountains, and it’s the closest mountain resort town to the major cities of Southern California. It’s home to Lake Gregory and Lake Gregory Regional Park as well as its beautiful hiking trails. It’s also home to multiple restaurants and to many profitable Airbnb rental properties which are very popular among tourists. A great thing about Crestline is the affordable real estate prices. We at Mashvisor have estimated the median property price at just below $350,000. This is not much above the national average, which makes Crestline an affordable option for even beginner, first-time investors. Another great thing is the really high cap rate for Airbnb rental properties.So, if you think that this market could be the right fit for you, you should keep in mind that San Bernardino County, where Crestline is located, has some strict Airbnb laws and regulations. You should study those before buying a property and renting it out on Airbnb or any other platform. Or even better, you can hire one of the local vacation rental property management companies to help you manage all aspects of your Airbnb property. The property that we have for you today is a single-family home. The address is 23857 Zuger DR, and that’s in Crestline, CA 92325. The asking price is $429,000, offering you 4 beds, 2 baths, 1,408 square footage. It’s only been on the market for 19 days.

The average Airbnb occupancy rate is 60%. It’s located right next to Lake Gregory, so you’re looking at a property that’s located in the right part of town. The potential rental income is $5,826. The recurring expenses are $2,337. That puts your cap rate at 9.76%, and your occupancy rate is 64%. Deciding to finance a deal like this and putting 20% down will easily be able to get you 26.52% cash on cash return. Again, that is above 25% cash on cash return. These are not deals that we typically see, so I’m highly recommending for investors who are interested in unique locations, love the opportunity and the affordability of buying in California to absolutely check out this property. This is a great fit for investors. So if it sounds like a fit for you, please check out the property in the show notes below. Next on our list is in Key West, Florida. Key West is an island city off the coast of the southern part of Florida. While all of the Florida market is great for investing in both traditional and Airbnb rental properties, Key West has always been one of the top locations for short-term rentals. You have the beaches, you have the coral reefs, you have the beautiful climate, the warm waters – everything that you need for a perfect tourist destination. So, if you’re looking for the ideal location for your Airbnb rental property in 2021, you should definitely consider Key West. Now, one thing that you should keep in mind is the high home values. The median property price is around $1,200,000 at this point. I’ve been able to find you a property that’s listed for about 30% less, but generally speaking Key West is better suited for experienced real estate investors who have a solid budget or who are able to find the best financing solutions. If you go for a conventional mortgage loan, as an investor you’ll need to put a few hundred thousand dollars down. However, unlike most of Florida, short-term rentals are regulated in Key West. So you need to check out the laws and make sure that you are able to stay within the limits. Alternatively, you can hire a professional property manager who will help you to run a profitable, yet legal Airbnb business in Key West. The property that we have for you today is a single-family home. The address is 2105 Fogarty Avenue, and that’s in Key West, FL 33040. The asking price is $865,000, offering you 4 beds, 3 baths, 1,950 square footage. The property is renovated and fully furnished, ready to be rented out as an Airbnb. It’s located very close to midtown, so it will be very easy to generate good occupancy rates. The potential rental income for this property is $12,119. With your recurring expenses at $4,277, your cap rate is as high as 10.88%. Your occupancy rate is at 59%. If you’re deciding to finance a deal like this, you can put 20% down. That will be estimated around $170,000 upfront. Your monthly mortgage will be right below $3,000. Your cash flow will be over $60,000 in annual cash flow. Your cash on cash return will be 33.69%. Again, that is 33.69%. This is a deal that you don’t wanna miss out on. This will make you very successful in the short-term rental business. So, I will highly recommend that investors check out this property. Key West has always brought in these properties that really stand out, but a deal like this is very rare.  So, guys, these are the top 5 rental properties for this week. Remember that you don’t find properties like this every day. Usually deals like these, they get sold very quickly. Now, keep in mind that if none of these properties are the right fit for you, make sure to check out other properties on our Mashvisor platform. We have over half a million listings, and you can filter through your criteria, your budget, your expected rental income. You can explore different locations, and you’ll have a full list of the top-performing Airbnb or traditional properties. If this is the first time that you hear about Mashvisor, and you’re still not sure, you can start a 7-day trial absolutely free. All you have to do is go to Mashvisor.com and enter promo code TOP5, this is capital T, capital O, capital P, and then the number 5. Promo code TOP 5 will give you access to a 7-day free trial. And if you decide not to cancel after the trial, you will benefit from a 15% forever discount on your quarterly or annual plans. So this is a great discount that can get you started.

And if you, guys, have any questions, you can always get in touch with me directly. Email me at mike@mashvisor.com. I’d love to hear what you’re thinking, where you wanna go, and what type of investment properties you’re mostly interested in. So, guys, that’s all from me today. I hope that you are able to find your dream property. And if not, keep in mind that I will be back next week with more properties. Meanwhile, happy investing! To listen to more episodes of the Mashvisor Real Estate Podcast, click here.