Investing in real estate has been a subject of debate for a long time. This is because many aspiring investors are scared to invest in real estate because they view it as a form of gambling. While real estate is usually considered a stable investment that can bring great returns, real estate investment risks can be very intimidating. The fear of losing money can, however, prevent you from taking any important action.
But is investing in real estate gambling or can you put the odds in your favor? Can you invest in real estate without the fear of losing money? Read on to get more insight.
Related: The Ultimate Guide to Getting Started in Real Estate Investing
Is Investing in Real Estate Gambling?
While real estate has some degree of risk, taking an extreme view against real estate investing will only make you miss out on potentially lucrative investments. The fact is that investing in real estate is not gambling. Unlike playing the lottery where the outcome is unpredictable and one can only rely on luck, a real estate investor can estimate their return on investment before they invest in real estate.
By properly researching the real estate market and analyzing investment properties, you can have realistic expectations and take luck out of the equation. Property data will help you estimate the potential profit or loss associated with an investment property. Therefore, how well you do your research is going to determine your chances of finding the most profitable investment properties.
Using Real Estate Investment Tools
Your success in real estate is not beyond your control. While no real estate investment is without risk, you can take some precautions to mitigate the risk. But how can you best mitigate the risks of real estate investing?
Well, the best way is to do the math using real estate investment tools. While any form of research is better than none, manual analysis of real estate investment opportunities can be time-consuming and inaccurate. That’s why you need to use modern real estate investment tools before you invest in real estate.
With the increase in the popularity of big data, predictive analytics, AI, and machine learning algorithms, you can find a good investment property easily and efficiently. Here are the top real estate investment tools to use in searching for and analyzing the best investment properties for sale:
1. Educational Real Estate Investment Tools
Real estate investing has lots of moving parts. To avoid making costly mistakes, you should ensure that you only make knowledge-based decisions. With proper real estate education, you will have an edge over your competition. For instance, you should learn how to find a good market for investment, how to search for investment properties, how to analyze investment properties, and how to buy them.
You don’t have to acquire a degree in real estate to be a successful real estate investor. There are many ways you can acquire basic knowledge of real estate investing. Be sure to check out real estate investor blogs, podcasts, videos, and ebooks. The more you learn, the better your investment decisions will be. Avoid gambling by checking out more real estate investment tips on Mashvisor’s blog.
2. The Real Estate Heatmap
When you decide to invest in real estate, the first step to finding good real estate deals is to find a good location. While you may find an investment property in an undesirable neighborhood that looks good, you should not take it at face value because it may not yield your desired income.
The location of your investment property will determine your occupancy rate, rental income, and the type of tenants you get. Whether you’re buying Airbnb property or a traditional rental, you want to buy in profitable locations. To find one, you need to conduct real estate market analysis.
One tool that you can use to find a good location for investment is the real estate heatmap. The tool provides a visual representation of neighborhood performance using different colors. It is a must-have tool in 2020 for conducting neighborhood analysis.
Using big data and machine learning, the heatmap analysis tool can help you find the best neighborhood in your market of choice in the US housing market in a matter of minutes. You can set up a number of filters such as listing price, rental income (traditional and Airbnb), cash on cash return (traditional and Airbnb), and Airbnb occupancy rate.
Related: Finding Income Properties Using a Heatmap
3. Online Property Finders
After finding a good investment location, the next step is to find potential investment properties. However, using traditional methods like looking for “For Sale” signs and checking local newspapers may not be very effective in 2020.
Tech-savvy real estate investors know the importance of using online property finders to gain a competitive edge over the competition. Mashvisor’s rental property finder is one such tool. It uses predictive analytics and machine-learning algorithms to help investors find lucrative rental properties for sale in any US housing market. The results will match your search criteria and investment goals in terms of property type, optimal rental strategy, listing price, and ROI.
4. Real Estate Investment Calculator
Using an online property finder may provide you with a list of rental properties for sale that matches your criteria and goals but won’t help you determine which is the best one. Before you invest in real estate, you should use a real estate investment calculator to estimate the return on investment of each rental property for sale.
Mashvisor’s real estate investment calculator provides investors a readily available analysis for investment properties for sale in the U.S. housing market. This includes rental expenses, rental income, occupancy rate, cash flow, cap rate, and cash on cash return for both Airbnb and traditional rental strategies.
The Bottom Line
While there’s no risk-free real estate investment, an investor can effectively mitigate risks of real estate investing by performing proper due diligence. Don’t gamble anymore when you invest in real estate. With the right real estate investment tools, you can minimize the risk of real estate investing effectively. Stack the odds in your favor by using Mashvisor’s real estate investment tools for your property search and analysis.
Mashvisor is the best real estate investment software for both Airbnb analytics and traditional analytics in 2020. All our tools provide a user-friendly experience and can be used by anyone. You don’t have to be tech-savvy or an experienced real estate investor to use them.
To start your 7-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.
Related: The Tool That Eliminates Fear of Investing in Real Estate