If you’re looking to become a real estate investor, then you’re probably wondering: Where can you find the best real estate investment properties for sale?
Real estate investment properties are properties that you can purchase for the purpose of making profits. There are three main types of investment properties in real estate depending on the investing strategy that you’re using and what you intend to do with the property after you’ve purchased it:
- Buy and hold investment properties are real estate properties that have a high potential for appreciation over a period of time, allowing a real estate investor to purchase the property and hold it until its price has risen, allowing him/her to sell it at a higher price for a profit.
- Rental properties are investment properties that you can purchase and rent out to tenants, and that can generate profits through their rental income and positive cash flow.
- Fix and flip investment properties are distressed properties that require a significant amount of renovation and repairs to get them back into a habitable condition, allowing real estate investors to purchase them at a low price, fix them, and then sell them at a drastically higher price for a profit.
No matter what type of investment property you’re looking for, if you want to become a successful real estate investor, then you should learn about what makes for the best real estate investment properties for sale, as well as the sources and websites that you can use to find them.
What makes for the best real estate investment properties for sale?
In order for an investment property to qualify and be a profitable real estate investment, there are certain traits that the property must have.
The two main aspects that make up for the best investment property in real estate are the property’s location and its potential for returns.
Location
The location of an investment property is perhaps the most important aspect to take into consideration, and it will have the biggest impact on the property’s performance. Before you start your search for real estate investment properties for sale, you should first set your mind on a location (a city and a neighborhood) that you’d like to invest in.
Each location or real estate market has its own characteristics and factors that dictate that market’s performance and determine the optimal investment strategy in it. For example, if you’re looking for a real estate market to invest in a rental property, then perhaps you might want to consider college towns. College towns can be a great choice for investing in rental properties due to the abundance of tenants who are moving in and out of the area on a regular basis. This allows your rental property to maintain a competitive occupancy rate, which will effectively increase your rental income and cash flow.
Also, before investing in any market, it is recommended to do a market research to gain a better understanding of that market and the different factors that affect its performance.
Ask yourself the following questions:
- Does the local housing market show signs of development and potential for appreciation?
- What are the unemployment rates and crime rates in the market?
- What’s the availability of transportation services in the local housing market?
- Is it a seller’s market or a buyer’s market?
- What’s the price-to-rent ratio in the real estate market?
These are only a few of the questions that you should be asking yourself when deciding on a housing market to search for real estate investment properties for sale.
Related: 5 Ways to Find an Investment Property
Return on investment
After setting your mind on a housing market or a location for an investment property, it’s time to run the numbers and do the calculations to see if the investment property has the potential for profits or not. After all, that’s the main reason why you’re looking for an investment property as a real estate investor.
There are multiple ways for you to calculate an investment property’s returns and determine how profitable it will be.
The two main metrics used in real estate investing for estimating the returns of an investment property are the cap rate and the cash on cash return. Before deciding to purchase any real estate investment property for sale, it is an absolute must that you calculate these metrics and see if it’s a right fit for you.
The cap rate of an investment property is a metric that calculates the property’s returns based on its cash flow and current market value. This means that the cap rate will tell you the percentage that the property’s cash flow is against its total price and how much time it will take for that property’s profits to cover the total price of the property.
The cash on cash return, on the other hand, is similar to the cap rate, but it only takes into consideration the amount of cash that you, the real estate investor, have paid to the acquisition of the property. This means that the cash on cash return does not include the amount of borrowed money used to acquire the property, and it can be used to estimate the amount of time that the property will take to pay back the amount of actual cash that you’ve invested in it.
Related: What Are the Advantages of Real Estate Investment Analysis?
Websites for finding real estate investment properties for sale
Knowing the main aspects that should be taken into consideration when searching for real estate investment properties for sale is crucial before you start considering your options for the sources and websites that can be used for finding investment properties.
There are numerous online sources and websites for real estate investing that you can use to gain access to real estate listings and investment properties for sale. However, knowing which source to use is also an important step towards finding the best real estate investment properties for sale. This is because not all websites are equal, and not all of them will provide the same type of data and information related to the property.
Zillow.com, for example, is among the most popular choices when it comes to websites that provide real estate listings as well as estimates for each investment property’s returns. With a massive amount of real estate listings, using Zillow will ensure that you have access to most available real estate investment properties for sale, and you will also be able to gain some insights on each property to determine its profitability.
Other examples of websites that provide you with access to real estate listings and analytics include Trulia.com, Redfin.com, and even Craigslist.com. These can be used for searching for and finding available listings and rental properties for sale.
Mashvisor.com is one of the best websites where you can use to obtain listings and real estate analytics that can help you easily find rental properties for sale based on their estimated returns, and it can also be used to gain insights on entire markets, cities, or neighborhoods with tools that can be used to conduct a quick comparative market analysis for each housing market to determine the best performing rental property in it.
Click here to start searching for the best rental properties for sale in your market of choice!
Mashvisor’s tools specialize in helping new real estate investors find rental properties for sale to invest in by providing them with the data needed to make wise investment decisions based on the investor’s criteria and investment strategy.
Related: Where Can You Find Airbnb Properties for Sale?
Bottom Line
Finding real estate investment properties for sale can be a simple and easy task for any real estate investor. However, finding the best investment and rental properties based on actual data and analysis, as well as choosing the right market or neighborhood to invest in, can be a daunting and time-consuming task that requires a good knowledge of the real estate business.
For that reason, Mashvisor can save you invaluable amounts of time by turning three months worth of research into 15 minutes. So, if you’re interested in becoming a real estate investor, or if you’re an experienced investor who’s looking for ways to boost your business and pick up the speed on your investments, Mashvisor is the perfect fit for you!