Looking for a way to make buying an investment property faster and more profitable? Consider the best cash on cash return calculator 2020 here on Mashvisor.
Do you want to make money in real estate in 2020? Do you want to buy profitable rental properties each and every time? If the answer is yes, then you need the best cash on cash return calculator 2020 for all your real estate investing projects.
But what makes for the best cash on cash return calculator? The simple answer is: Being able to turn 3 months of research into 15 minutes. The more complicated answer you can find in this article, so keep reading to find out why Mashvisor emerged as the top rental property calculator among all real estate investor websites.
What Is Cash on Cash Return in Real Estate Investing?
If you are a beginner real estate investor, you might still not be aware of the concept of cash on cash return alone, not to mention a real estate cash on cash return calculator. This is one of the most important metrics of return on investment (ROI) in real estate. Here’s how to calculate cash on cash return:
Cash on Cash Return Formula:
Cash on Cash Return = Net Operating Income/Total Cash Investment
What more experienced real estate investors will notice right away is that while this measure resembles capitalization rate (or cap rate, for short), another key real estate metric, there is a major difference between the two formulas. Namely, the cash on cash return factors in the method of financing of a rental property (cash vs. mortgage), whereas the cap rate does not. This is the most significant advantage of the cash on cash return metric as the majority of investors need to apply for a mortgage loan which affects their rate of return. However, this also makes the calculation more complicated, pushing further the need for a cash on cash return rental calculator.
Before we proceed with a detailed analysis of this real estate investing tool, let us tell you what is considered good cash on cash return in the US housing market 2020. Most experts tend to agree that a good realistic range is about 8-12%. Of course, the higher the better because it means that you are making more from real estate for the money you have invested.
What Is a Cash on Cash Return Calculator?
This is a specific investment property calculator that helps investors find the best neighborhoods and the best investment properties for sale in any housing market for owning rental property. In other words, this is one of the must-have real estate investment tools in 2020 to make profitable investing decisions and compete with other, more experienced investors.
In specific, this online real estate calculator performs neighborhood analysis to highlight the top locations to buy rental property in any US real estate market. Moreover, it conducts investment property analysis on all MLS listings, foreclosures, bank owned homes, short sales, and off market properties in a city to point out the ones which will generate the highest return on investment based on an investor’s preferred rental strategy and in line with all his/her requirements and expectations including budget, preferred property type, number of bedrooms, and others. What this means is that in 2020 beginner real estate investors will be able to search for, identify, and analyze rental properties like never before – quickly, efficiently, and accurately.
For comparison, don’t forget to take a look at Mashvisor’s cap rate calculator as well.
What Does the Best Cash on Cash Return Calculator 2020 Compute?
If you are intrigued by this investment return calculator and would like to learn more about it, let’s have a detailed look at what Mashvisor’s cash on cash return calculator 2020 can do for you.
The first step towards figuring out the cash on cash return of any investment property is estimating all startup and recurrent expenses associated with buying and owning a rental property. Getting these numbers requires lengthy research and complicated calculations, which means that being a Math expert is a prerequisite for making profitable real estate investing decisions. Well, this might have been the case in the 20th century, but it is no longer true in 2020. The best cash on cash return calculator – like the one available on Mashvisor’s platform – will provide you with:
- All one-time startup costs such as property price, home inspection, closing costs, repair costs, and needed furniture and appliances
- All recurring monthly expenses including mortgage payments (customized for your method of financing), property tax, property insurance, property management, rental income tax, HOA dues (if investing in a condo), property maintenance, utilities (if investing in short term rental properties), and cleaning fees (if buying an Airbnb property)
Can you imagine how much time and effort getting all these numbers manually will require? A LOT. With Mashvisor’s rental calculator, you will get them with a few clicks of your mouse.
Compute Rental Income and Occupancy Rate
The second most important factor for calculating the return on investment of your rental property in terms of cash on cash return is the rental income which it will generate. To get an accurate and reliable estimate of the monthly rental income, traditionally investors needed to get numerous rental comps which would take lots of time and energy. In 2020, this is no longer the case because of the best cash on cash return calculator – Mashvisor’s.
This real estate investing tool uses big data, predictive analytics, and machine learning algorithms to conduct rental market analysis as well as investment property analysis of all comparable rental properties to estimate how much rental income any property will produce. This includes both traditional rental income and Airbnb rental income. Moreover, the forecasted rental income will take into consideration the traditional occupancy rate and the Airbnb occupancy rate prevailing in the local housing market.
Related: Where Can You Find Airbnb Occupancy Rate Data for Real Estate Investing?
Calculate Cash Flow and Cash on Cash Return
We’ve come to the best feature of Mashvisor’s rental property calculator. You no longer need to know how to calculate net operating income or any other real estate metric. Our investment property calculator works as a rental income calculator, a cash flow calculator, and a cash on cash return calculator as well as a few other must-have real estate investment tools.
Based on the estimated costs and expenses and the predicted rental income, it will calculate exactly how much cash flow an investment property is expected to bring and what cash on cash return it will generate. Once again, all this will happen with a few clicks of a button and within a couple of seconds. The calculations will include both traditional cash on cash return and Airbnb cash on cash return so that investors can compare between the two rental strategies and make the best decision.
As an example, below you can see a part of what Mashvisor’s cash on cash return calculator has to say about this particular property in the Chicago real estate market.
The end result? Beginner real estate investors are guaranteed positive cash flow properties with high cash on cash return.
What Are the Benefits of Using This Real Estate Investment Tool?
Using the best cash on cash return calculator 2020 has many advantages for real estate investors. Here are the chief ones:
- Best Financing Method: Mashvisor’s cash on cash return calculator has a built-in mortgage calculator which helps investors figure out the most appropriate way to pay for their rental property – in cash or with a mortgage. Moreover, users can choose between various mortgage options or input their own parameters to get the most accurate results. All metrics for return on investment will be recalculated right away.
- Optimal Rental Strategy: Finding the best places to invest in real estate in 2020 and identifying a top-performing rental property is just the beginning. Once you’ve done that, you have to decide what the best rental strategy for this particular property is as traditional rentals and Airbnb rentals produce very different cash on cash return and cap rate. Mashvisor’s investment property calculator will estimate the cash on cash return for both strategies for each and every property in the US housing market 2020 to help you make the most profitable real estate investing decision.
If you’ve already decided to invest in Airbnb in 2020, you will find using The Airbnb Profitability Calculator: The Best Friend of the Short-Term Rentals Investor particularly helpful.
Real estate investing 2020 is not about working hard but working smart, and using the best cash on cash return calculator does exactly that – it helps beginner investors make the most profitable decisions with minimum effort. Still not convinced of the benefits of this tool? How about getting access to a free online calculator for 14 days to try it out yourself? Sign up for Mashvisor’s cash on cash return calculator now for a two-week free trial and a 20% discount after. Begin your investment property search 2020 now!