The methods used to analyze investment properties have come a long way. Not too long ago, real estate investors relied on spreadsheets, documents in which data were inserted. The investors would have to manually input the data which they have gathered and calculate analytics on many, many potential rental properties to do things like a real estate market analysis. For obvious reasons, this method was extremely time consuming and exhausting. Luckily, investors have evolved from this method and are never looking back. Reverting back to spreadsheets from investment property calculators would be like reverting to pigeon mail from email. Why would anyone do such a thing?
The thing is, no one will revert to spreadsheets, and neither should you. Rental property calculators have dominated the real estate landscape to the point that buying rental property calculator is one of the first things you should do in the real estate investing business.
What Does a Rental Property Calculator Do?
A rental property calculator, or an investment property calculator, is a tool real estate investors use to estimate the potential profitability of an income property. It does this by using input data based on predictive analytics. The input data include the property listing price, mortgage payments, and expenses, among others.
What Exactly Does a Rental Property Calculator Calculate?
You should be buying rental property calculator to know different data about a rental property you are interested in. Here are the main calculations a rental property calculator provides you with:
Cash flow is your bread and butter for rental income. In its most broad sense, cash flow is the amount of monthly income remaining after the monthly expenses have been paid off. Obviously, the goal of owning a rental property is to make money. So, without cash flow, or positive cash flow that is, that goal is not achievable. In other words, if you are paying more in expenses than what you are making, you do not have positive cash flow.
Cash on Cash Return
Another metric for the evaluation of an investment property is the cash on cash return. The CoC return measures an investment by the amount of cash put into the total investment. Not all investors rely on this metric, but it is still a very solid one. The cash on cash return depends on many variables. Since it relies on cash, some of these variables include down payment, closing costs, and repairs. A good range for the CoC return is between 8-12%.
Most rental property calculators require that you input these numbers manually, and the calculations are generated automatically. With Mashvisor’s rental property calculator, though, the cash on cash return is generated automatically. You can also adjust the numbers to your liking. This is one among the many reasons why you should be buying rental property calculator from Mashvisor.
The last of the big three investment metrics is the cap rate. The cap rate, or capitalization rate, evaluates a rental property’s returns regardless of how it was paid for. For this reason, it is a vital metric needed to understand an income property’s potential. A cap rate of 10% or more is considered good. The cap rate is calculated by dividing the net operating expenses by the realestate property’s price.
Why Is Buying Rental Property Calculator the First Thing to Do in Real Estate?
Not buying rental property calculator when beginning to invest in real estate will leave you lost and clueless. As already mentioned, using a rental property calculator helps you find out if a real estate property is a good investment opportunity. Aside from the big three metrics mentioned above, a rental property calculator will come in handy with many other forms of data. Imagine if you had to manually compute these numbers. That would take a heck of a long time. Therefore, to save time and energy and become more informed about properties, when you’re getting into real estate, get ready for buying rental property calculator.
Where to Find a Rental Property Calculator?
Rental property calculators are essential for real estate investors. That’s why they are relatively simple to find. Various real estate sites like Roofstock, BiggerPockets, Investfourmore, and others have rental property calculators.
This begs the question: If there are so many sources of rental property calculators, through which site can you find the best one? Here’s the answer: the one you’re on now!
How Is Mashvisor’s Rental Property Calculator Special?
Mashvisor’s rental property calculator is simply the best of the best. There are various reasons why.
For starters, Mashvisor’s calculator is extremely interactive. You’re able to set the numbers of any variable you desire. Mashvisor’s level of analysis is also noteworthy. Not only does our calculator break down a single property, but it also analyzes the property’s neighborhood. This extra level of detail will help you better understand the property’s potential and how that ties with your investment goals.
When it comes to neighborhoods, Mashvisor’s rental property calculator will crunch some vital numbers including: occupancy rates, average rent prices, median property prices, average CoC return, and average cap rate. The same numbers are generated for an individual property. Understanding your property AND your neighborhood is vital to the investment property’s success.
That’s not all the calculator can do. It doesn’t just work for traditional properties, it analyzes Airbnb rentals too! Finally, Mashvisor’s rental property calculator will inform you if the investment property has great potential or not through a percentage called the Mashmeter. What more can you ask for from a rental property calculator?!
Buying rental property calculator is one of the best, and most important, decisions you could make in real estate investing. As you start saving up for an income property, prepare for buying rental property calculator.
For more on buying rental property calculator and becoming a successful real estate investor, start your trial with Mashvisor!