With the right tool, making money in real estate doesn’t have to be a grueling task. In the old days, real estate investors would have lengthy excel sheets and manual calculations trying to calculate the possible return on investment on their rental properties across their city. Now, many long-time real estate investors as well as some beginners have seen the benefit of using a rental property returns calculator and other real estate investment tools to make their investment property analysis not only easier but more accurate than ever before.
Though with all the rental property calculators out there, how do you know which one to use during your investment property search? The best rental property returns calculator is one that takes all factors into account when making its calculations, and Mashvisor’s investment property calculator does just that! Continue reading to learn all about why you should consider using Mashvisor’s rental property analysis platform as your primary real estate investing tool in the US housing market in 2022.
Why Use a Rental Property Returns Calculator?
Using a rental property calculator is beneficial to real estate investors as it not only saves on time and effort, but it all allows a more accurate estimate reading using predictive and historical analytics that can help you decipher your possible return on investment when buying and renting out a property. Mashvisor’s rental property calculator can collect the necessary real estate data in a matter of minutes and provide you with a full investment property analysis. It includes things like the expected rental income, cash on cash return, cap rate, occupancy rate, and possible rental expenses for any particular investment rental property in the US residential market.
In addition to data collection, using an investment property calculator like Mashivsor’s allows for greater accuracy as compared to manual calculation. Whether you are a long-time investor or a novice to real estate investing, human error in calculations could put your profit margins at risk. With the traditional and predictive analytics and comparative capabilities of a rental property returns calculator, you are guaranteed to be making a well-informed decision and investment with accurate data.
For any real estate investor who wants to see a positive cash flow and good return on investment, a rental property returns calculator is a must when moving forward in investment decisions. To try out Mashvisor’s rental property calculator and get the information you need, sign up for a 7-day free trial now.
Mashvisor’s Rental Property Calculator
The Mashivor rental property calculator is a digital feature of the Mashvisor real estate app that can help you find the best investment properties across the US real estate market and analyze their investment potential in a matter of minutes. No matter what your initial capital is, to have a profitable property you will need to consider a multitude of factors that will make or break your return margins. Some of the things you need to take into account, especially in the rental market, are location, type of property, rental strategy, market value, and market demand. Mashvisor’s rental property returns calculator includes features that will help you analyze all of these moving factors effectively.
Related: 10 Best Places to Buy Real Estate in 2022
Here are the key features of Mashvisor’s investment property calculator and how it can help you with your rental property analysis:
1. Mashvisor’s Area Analysis
While it may be a cliché, it is true when they say that location is everything in real estate investing. A large factor in making money in real estate relies on where you purchase your rental property, including the state, the city, and the neighborhood. While it is quite easy to find data on the best cities generating rental income at the moment, more often than not these quick searches only tell you part of the story and should be used as an initial guide. To truly determine your return on investment including rental property returns, you will need to do an extensive neighborhood analysis to make the best real estate investment decision.
Mashvisor offers the resources not only to help you in your initial search but also in your in-depth analysis. Mashvisor’s real estate blog is a great starting point to check different data points for various cities and get a better overview of which locations are considered prime areas. However, to deepen your research, Mashvisor’s real estate heat map can pinpoint which exact neighborhoods would be the best investment for your budget and strategy. An area that is lucrative for traditional rentals may not offer you much of a return if you plan to invest in an Airbnb property and vice versa.
Related: Best Cities for Airbnb Investment 2022: Where Should You Invest?
Knowing this, Mashvisor’s area analysis tool offers you a metric breakdown of the initial capital, average rental price, cash flow, cash on cash return, cap rate, and occupancy rate for both traditional and Airbnb rentals. No matter your budget or rental strategy, you will be able to see and compare the areas in the city that will offer you the best returns on your rental properties.
With your initial research and comparison of areas and neighborhoods that offer investment properties in your budget and rental strategy, you can further assess your options with Mashvisor’s investment property calculator. This will take into account different real estate trends in the area and show you the following:
- Median property price
- Average price per square foot
- Average traditional and Airbnb rental income
- Average traditional and Airbnb cash on cash return
- Average Airbnb occupancy rate
- Optimal rental strategy
- Optimal number of bedrooms
- Optimal property type
- Number of traditional and Airbnb properties for sale
- Walk Score
- Mashmeter Score
- Real estate comps
With these metrics, you should be able to determine just how strong the rental market is for both traditional and seasonal renters. While some factors may carry more weight than others, these 12 factors are taken into account by any good real estate investor regardless of where in the country you are based. By studying these factors, you should be able to choose a good investment property and reap benefits like a passive income from rent.
Related: The 10 Best Rental Markets in Florida
A key feature worth noting in Mashvisor’s real estate investment tool is that it also allows you to download a full report on your investment property’s area to be studied further. While it is advisable to always get a second opinion from professionals, Mashvisors investment tools can help speed up the process and narrow down your options quickly. When discussing your ideal area with your real estate agent, you can share the excel file and compare different listings available with ease.
2. Mashvisor’s Comprehensive Investment Property Analysis
After doing a neighborhood analysis, you will have to choose a property in that area. While the area itself may have a good track record, the rate of return you see will heavily rely on the actual property you purchase. On a regular basis, this will involve hours of sifting and comparing each listing within your budget to each other and trying to figure out which one offers you the best returns.
However, with the comprehensive investment property analysis of the Mashvisor platform, you can sift through all the properties available with filters that not only meet your budget requirements but also other important criteria that will allow you to yield great return on investment. For example, you are might be looking for a single family home within a certain budget to rent out on a monthly basis. With the Mashvisor property finder, you can indicate that, and you will get access to all the listings that match these exact criteria, while eliminating all others.
With this process of elimination, you are not left with just a handful of properties to invest in. While this is great progress, this is where it can get a bit tricky as it will really come down to the finer points and calculations of each property. To be sure about your investment, Mashvisor has all the analytics from start-up costs, rental income, cash flow, cash on cash return, strategy suggestions, and real estate comps to help you in your investment decision. With all of these factors coming into play, Mashvisor does provide a one-stop solution as your rental property returns calculator and ensures that you put your investment in the right place.
Let’s have an in-depth look at the analysis and information which Mashvisor’s investment property tools can offer you in your investment journey:
1. Out-of-Pocket Rental Expense Calculator
Before making money in real estate, you will have to shell out the capital. While most people think this involves just the price of buying the property, there are a lot of costs in renting out a property and maintaining it during a rental agreement. Mashvisor not only lists the different costs you may acquire in that area but will also give you an estimate of how much you should expect to spend on each cost.
For your ease, the app will split the expenses into initial one-time costs and monthly expenses. Under one-time costs, you can expect things like closing costs, escrow fees, repair costs, and inspection fees to be included. On the other hand, monthly costs will include insurance, property taxes, mortgages, homeowners association dues, utilities, and listing costs if it is vacant.
It is important to note all of these things as you should aim for a place that demands a median rent that covers most of your fees, if not all. The whole point of investment properties is to generate income and positive cash flow so if a place has high fees attached to it, you may want to go with a different option to yield higher monthly returns.
2. Average Rental Price
To be used hand in hand with the rental expense data points, the investment property calculator can show you the amount of money a specific property can generate on the rental market. By having these two data points, you can easily decipher if a property is worth purchasing and investing in.
Traditionally, you would have to use rental comps to simply find the rental income estimates, but with Mashvisor’s calculator, you can have the average rental price in a matter of minutes and compare both traditional and Airbnb rentals instantly. With this, you can also calculate what your positive cash flow may be. While not always a primary factor for real estate investors, those new to the real estate market should look for a positive cash flow for their first few properties.
Related: How to Find Rental Comps Using Mashvisor
3. Return on Investment
Perhaps one of the main reasons to use a rental property returns calculator is to determine just how profitable the property will be down the line. Profitability is often measured by two things, specifically cap rate and cash on cash return. It is imperative that you have these calculations before investing your money as they will be your primary basis on whether you should invest in a property or not.
Mashvisor’s Rental Property Returns Calculator
For easily accessible computations, Mashvisor’s rental property returns calculator provides both cash on cash return and cap rate computations and estimates for you to use. Using your mortgage information and location, they will generate an estimate of the property price, available loans, mortgage plans, down payments, and interest rates and base its cash on cash return estimates and cap rate through that.
4. Occupancy Rates and Rental Strategy
Occupancy rates and rental strategy often go hand in hand, and you will need data to know which type of rental strategy thrives and boosts occupancy in that area. Some areas that use a seasonal rental strategy like Airbnb can yield higher occupancy rates, while others do better with traditional rental contracts. The last thing you want is to have an Airbnb in a traditional renter’s market with no guests or a traditional rental strategy in a seasonal renter market and lose out on potential income. Whatever you decide, Mashvisor’s investment property calculator can help you determine the occupancy rate and rental strategy that is most likely to benefit you with your particular prospective property.
Getting Started with a Rental Property Return Calculator 2022
Overall, using any rental property returns calculator and investment property tools will benefit your real estate decisions immensely moving forward in 2022. From narrowing down the best areas to giving you a side by side comparison of each property, such a tool will give you the best chances of you meeting all your investment goals. Working with Mashvisor’s rental property return calculator will give you the necessary analysis of the present US housing market and help anyone from a novice investor to a longtime real estate veteran. Sign up for a 7-day free trial now.