One of the first steps that any real estate investor needs to make at the start of his/her career is to learn how to find rental properties for sale before investing in real estate.
While the steps mentioned here will focus on how to find rental properties for sale in particular, the same steps can also be used for finding most types of investment properties.
Also, keep in mind that this article aims to explain how to find rental properties for sale with a focus on the tools provided by Mashvisor’s platform. While there are several other methods that can be used to achieve the same results, and numerous data sources and mediums through which you can search for investment properties for sale, the steps we mention here will show you how to use Mashvisor to find rental properties for sale and obtain their analytics in less than 15 minutes, which is the highest value out of any other medium, source, or online platform.
Want to Learn More? Here are 4 Amazing Real Estate Investing Books that You Should Read
Learn How to Find Rental Properties for Sale
One of the most important aspects of real estate investing, and one of the first steps to any real estate investment, is the hunt for investment properties. Thus, learning how to find investment properties for sale is one of the first steps towards becoming a real estate investor.
There are many aspects that you need to take into consideration when learning how to find investment properties for sale. For example, before you actually begin your property search, you first need to decide on a real estate market, and as most real estate investors know, location is everything in real estate. The second thing that you need to decide on is the type of investment property that you would like to find.
There are several investment strategies in real estate, and each investment strategy will have an optimal type of real estate property as well as an optimal location for you to invest in.
In this article, we will focus on how to find rental properties for sale in your real estate market of choice using a single platform, and how you can use the different tools on this platform to locate the best investment properties anywhere in the US.
How to Find Rental Properties for Sale Using Mashvisor
Before we get into the details on how to find rental properties for sale using Mashvisor, let me first explain what Mashvisor is. Mashvisor is an online real estate analytics platform which was designed to help real estate investors find lucrative investment properties nationwide based on accurate real estate readings and data comps.
The platform gathers a large amount of data and listings for each area and uses specially designed formulas to calculate all the different values and metrics that are used by real estate investors to determine the viability and profitability of each investment property, with a high focus on helping users find rental properties for sale based on the property’s projected returns.
When trying to find rental properties for sale, it is crucial that you know how to measure the property’s performance and project its returns to know exactly what to expect from investing in that rental property. Some of the most important values and metrics that real estate investors use when trying to find rental properties for sale and determine their profitability are:
- Cap Rate
- Cash on Cash Return
- Occupancy Rate
- Cash Flow
To help you better understand what these metrics are and why they’re important when trying to find rental properties for sale, here’s a brief description of each of these metrics:
Cap Rate
The cap rate of an investment property is the amount of profit that the rental property will generate in relation to its market value. The cap rate is expressed as a percentage which indicates the rate of return that the rental property has as a portion of the current total market value of that property.
Here is the formula for calculating the cap rate:
Cap Rate = (NOI/Current Market Value) x 100
Related: How is Cap Rate Used for Evaluating a Real Estate Investment?
Cash on Cash Return
The cash on cash return is a very similar metric to the cap rate, but it calculates the amount of profit that the rental property will generate in relation to the actual cash invested in it. The biggest difference between the cash on cash return and the cap rate is that the cash on cash return takes into account the method of financing used for purchasing the rental property, and will only include the amount of money paid in cash, leaving out the amount borrowed by a mortgage or a loan.
The formula for calculating the cash on cash return is:
Cash on Cash Return = (NOI/Cash Invested) x 100
If you plan to start a rental property business, Mashvisor’s calculator also works as an Airbnb calculator for short-term rental property ROI calculations.
Related: Cash on Cash Return Calculator: A Great Real Estate Investing Tool or a Waste of Your Money?
Occupancy Rate
The occupancy rate of a rental property is the percentage of time during a year that the property is occupied or leased out to a tenant. The vacancy rate, on the other hand, is the percentage of time that the property is vacant throughout the year.
Cash Flow
The cash flow of a rental property is one of the most important factors for determining whether a rental property is profitable or not. A positive cash flow property will have a rental income that is higher than the costs and expenses of owning and running the property, while a negative cash flow rental property will have a rental income that is less than the amount of money used for running and owning the property.
Find Rental Properties for Sale Based on These Values
To help real estate investors find rental properties for sale, Mashvisor provides access to readily calculated values for each investment property using the metrics mentioned above. Using Mashvisor to find rental properties for sale can save real estate investors invaluable amounts of time which they would otherwise spend on acquiring the data for each investment property and calculating the results before comparing all the different properties to identify the biggest opportunities for investing.
Note: Want to try Mashvisor now? Click here and type in the name of any city in the US to see the best investment properties!
Mashvisor allows you to find rental properties for sale with a few simple steps that will only take 15 minutes of search, as illustrated here:
First, type in the name of the real estate market that you want to invest in. This can either be the name of a state, a city, or a neighborhood.
Type in the name of the city you want to invest in
Second, on the search results screen, select the neighborhood of your choice based on its average values, including the cap rate, cash on cash return, and rental income.
Choose the neighborhood that you want to invest in
Third, filter out the results that do not match your search criteria using the several filters that are available, including the cap rate and cash on cash return values that you would like to achieve, as well as the different aspects of the investment property such as its type, age, and size.
Use the filters to optimize the results based on your search criteria
Fourth, once you have a few investment properties that are potential investments, you can export the neighborhood’s data in an Excel sheet format to easily compare the results and identify 2-3 investment properties that are exceptionally well-performing.
Compare the different investment properties in an area
Fifth, once you’ve identified a few potential investment properties, you can visit each investment property’s analytics page to see how that property has been performing over the past 12 months and gain additional insights and data on that property.
Obtain all the data and analytics for the investment property of your choice
Related: How Mashvisor Revolutionized Cap Rate and Investment Property Analysis
Sixth, you can export the investment property analytics report to share it with a real estate agent or a family member to get a second opinion. If you don’t have an agent, the report will include the contact information for one of the top real estate agents working in the area. You can contact the agent and hire him/her to help you close the deal.
Download and share the investment property report to get a second opinion
Note: Ready to start searching? Click here to find the best rental property to invest in!
Now That You Know How to Find Rental Properties for Sale
Head over to Mashvisor, sign up for the free trial, and use the platform to find rental properties for sale with ease and at a higher speed based on accurate readings and analytics to make the optimal investment decisions and start making money in real estate.
Are you still unsure about investing in rental properties? Head over to Mashvisor.com/blog to find the latest articles on all the different aspects of real estate investing and learn the ins and outs of the business from real estate experts, professionals, and enthusiasts.