What are the tools that you need when buying an investment property? If you are considering buying an investment property, then you should know there are several tools that you will need to use throughout the process to make it easier and faster.
Whether you are searching for investment properties, analyzing them, comparing them, or doing a comparative market analysis, there are tools and websites that can help you do all of those steps more efficiently and much faster than doing them on your own.
One of the biggest challenges that most real estate investors face in today’s market is that they spend too much time gathering data, making sense of it, analyzing it, and comparing it that by the time they have done all of that the properties that they were interested in would be long gone.
In order to avoid that, and to prevent the perfect investment property from slipping away, a number of websites and online tools and platforms were created to serve the needs of real estate investors and enable them to compete more fairly.
In this article, I will list the top tools that successful real estate investors use when buying an investment property to make the process easier and faster than ever before.
Search Tools & Filters
Obviously, the first step to buying an investment property is to find investment properties for sale.
Traditionally, in order to search for investment properties for sale, you would have to drive around and look for “for sale” signs, look for newspaper listings, or check out some billboards.
Today, however, all you have to do when searching for investment properties for sale is a quick Google search and you will find hundreds of real estate websites and platforms that were designed for that specific purpose.
Although these websites are a great solution for finding investment properties for sale, real estate investors who are interested in buying an investment property will typically have specific niches in mind in order to maximize their profits.
For this reason, certain websites were designed to help real estate investors customize and narrow down their search by providing them with unique filters to find specific properties with specific attributes that perfectly match their investment goals and strategies.
One of these online platforms, Mashvisor, allows real estate investors who are looking for rental properties for sale to narrow down their search based on their available budget, financing method, property type, rental strategy, and the return on investment that they would like to have (cap rate & cash on cash return) in addition to a number of other filters.
This allows real estate investors to easily and quickly find properties that match their search criteria without having to obtain this info about each individual property before determining whether it meets their investment goals or not.
Heat Map
Additionally, Mashvisor provides the user with a heat map feature.
The heat map is a unique feature that places a colored overlay on the map to give you visual indicators for the different areas within a market. When using this tool, you will have the option to choose from a number of metrics:
- Listing price
- Airbnb or traditional cap rate
- Airbnb or traditional cash on cash return
- Airbnb occupancy rate
When you select one of these filters, the different areas on the map will turn green, yellow, or red (green means high, red means low). This lets you easily determine the best neighborhoods, for example, within a city to invest in based on the desired metrics that you want your property to have.
Related: What Are the Basics and Benefits of Heat Map Analysis for Finding Rental Properties?
Neighborhood Comps
Before buying an investment property, you will want to decide on a neighborhood where properties perform well and generate profits. After that, you will also want to select and compare a number of properties within that neighborhood in order to identify the ones that have the highest potential for returns.
Traditionally, to do this step you will need to list the different properties and their info on a spreadsheet before manually comparing them based on their type, size, age, price, and projected returns. This process can be the hardest to pull off, especially if you’re a beginner real estate investor with not much experience in doing a comp analysis.
However, there now exist a number of websites that allow you to do all of this automatically and without much hassle. Mashvisor, for example, allows you to download an Excel sheet report for a neighborhood containing a list of the properties that match your search criteria. Using this sheet, you can then easily sort the property based on the different metrics and traits of the properties in order to identify the ones that match your investment goals the most.
Related: Neighborhood Analysis in Real Estate Investing
Investment Property Calculator
After you have finally decided on the property that you want to invest in, the final step before buying an investment property is to finalize your analysis and calculate the future returns of your property.
An investment property calculator is a tool that allows you to input values that are related to the property’s price, its rental income, its occupancy rate, the one-time costs and recurring expenses, as well as your mortgage info in order to calculate the projected returns of the property.
This is a crucial step before buying an investment property as it allows you to know exactly what to expect from investing in the property and the amount of profits that you will make from it over the years.
Related: Rental Property Calculator: The Must-Have Real Estate Investment Tool
Buying an Investment Property? Use an Investment Property Finder
Finally, one of the features that is unique to Mashvisor is the property finder tool.
When you’re searching for investment properties using Mashvisor or any other online platform, there is certain information related to your search that will be stored in the form of cookies.
The property finder tool allows you to enter a minimal amount of information about your search, such as your budget, the rental strategy that you want to use, and the market/s that you’re interested in. The tool will then take that info and combine it with all the different stored data in the form cookies in order to give you a list of investment properties that perfectly match your needs and investment goals.
This tool has a success rate of 83%, and it can save you thousands of hours which you would traditionally have to spend on the different processes, from searching for investment properties for sale to analyzing them and identifying the best ones.
Related: How to Find Investment Properties Using a Property Finder Tool
What’s Next?
If you’re interested in buying an investment property, but you still don’t know where to start, Mashvisor can be the perfect place for you to do all the necessary steps, from searching to finally making the decision of buying an investment property that is guaranteed to be profitable.
You can learn all about Mashvisor and how to use it by visiting our help center, by scheduling a time for a free demo call, or by watching our demo videos.