Real Estate Analysis What Is the Fastest Way to Analyze Rental Property? by Alex Karani April 13, 2020April 12, 2020 by Alex Karani April 13, 2020April 12, 2020 Investing in rental properties can bring long-term financial rewards if you know what you are doing. To know whether you are getting a good real estate deal, you will need to do a lot of research. You can’t just buy any rental property for sale and expect to make good returns. The secret to finding a great real estate deal is to do the math. However, rental property analysis can be daunting because you need to consider several numbers and assess multiple rental properties. You could rely on real estate agents to analyze rental property for you, but perhaps you prefer to do it on your own. Using investment analysis spreadsheets is not only less accurate but can also be time-consuming. And as you know, time is money. Just imagine how long it would take you to manually collect data on a real estate market and rental properties, and then use Excel spreadsheets to do your calculations for important metrics. This is what investors have been doing for a while but, fortunately, don’t have to any more. Related: Why an Investment Property Calculator Is Better Than Spreadsheets So, what is the fastest way to analyze rental property without making unnecessary mistakes? It’s simple: Use a rental property calculator! This rental property analysis tool makes a real estate investor’s life easier in a number of ways and increases the chance of success. In this article, we are going to learn about Mashvisor’s rental property calculator, which is one of the best calculators for analyzing rental property. Read on to learn more about this calculator. Introducing Mashvisor’s Rental Property Calculator Mashvisor’s rental property calculator is a rental property analysis tool used by investors to estimate potential returns so as to know whether a rental property for sale will make a good investment. With this tool, you can calculate and project financial outcomes from a real estate investment opportunity based on data provided by the calculator. All this can be done with the click of a button. Mashvisor’s calculator uses up-to-date property data and predictive analytics as well as data provided by the users to generate the most accurate results. The data is accumulated from real estate markets around the US, making it possible for investors to take advantage of investment opportunities in any rental market. With an accurate forecast of return on investment, real estate investors are able to make the best investment decisions. Our calculator is easy to use and will save you a lot of time and effort when you want to analyze rental property. The tool will automatically display readily-calculated data and numbers. Here is a detailed description of how to analyze rental property using our rental property calculator and the unique features it offers. Using Mashvisor’s Rental Property Calculator After you have found a rental property for sale on the Mashvisor platform and accessed the calculator, you can easily analyze its potential for profit with just a few clicks. You will first need to key in some data relating to the subject property. Input Data The first step of using Mashvisor’s calculator to analyze rental property is to enter your data with regard to the following: 1. Mortgage/Financing In this section of the calculator, you are required to select your financing method (mortgage or cash). If you have selected the mortgage option, you will also need to specify the loan type, the loan amount, the down payment, and the interest rate on the mortgage. Mashvisor’s Rental Property Calculator – Financing This data is important because financing costs will affect the future cash flow and return on investment of the property. You can play around with these mortgage details to see what will yield a better ROI. Output Data Once you’ve entered all the above data, the calculator will do the projections and provide you with some key property metrics. These metrics will help you determine whether the rental property will be a good investment. They include: 1. Rental Property Expenses One type of output data that affects profitability is rental property expenses. This includes both one-time startup costs (like inspections, repairs, closing costs, and furnishing) as well as recurring costs (like insurance, property tax, rental income tax, property management, HOA dues, and utilities). In this section, the calculator will provide expense estimates based on location and rental comps. However, you can easily modify these expenses and/or add custom expenses to the list. Mashvisor’s Rental Property Calculator – Rental Expenses Related: A Comprehensive List of Rental Property Expenses for Investors 2. Cash Flow Cash flow refers to the income you are left with after paying off all monthly rental expenses. This is one of the most important real estate metrics that investors use to analyze rental property. Positive cash flow shows that the investor will be making money from the investment property. Investing in positive cash flow properties ensures that you don’t use money from your pocket to offset some rental expenses. If you have been wondering how to analyze rental properties for maximum cash flow, this is the tool to use. Sign Up for Mashvisor 3. Cash on Cash Return Cash on cash return is another essential metric computed by Mashvisor’s calculator. It shows the return estimate of an investment property based on the amount of cash invested. This metric is usually used to analyze rental properties financed with a mortgage. Related: What Is a Good Cash on Cash Return in 2020? 4. Capitalization Rate (Cap Rate) Cap rate is the ratio of the net operating income of a rental property to its fair market value. This metric evaluates the profitability of a rental property regardless of the method of financing. This makes it a good metric for comparing multiple rental properties. Mashvisor’s Rental Property Calculator: Special Features Apart from numbers, Mashvisor’s rental property calculator provides users with other unique features. Here are some of these features: 1. Optimal Rental Strategy With Mashvisor’s calculator, you don’t have to worry about which rental strategy is more favorable for a particular rental property. The tool provides real estate metrics for both Airbnb and traditional rental strategies. This enables investors to make a quick comparison and accurately determine the optimal rental strategy. Mashvisor’s Rental Property Calculator – Optimal Rental Strategy 2. Investment Payback Balance From the Payback Balance section of the rental property calculator, you can see how much profit the rental property is expected to generate or lose for a period of up to 10 years subject to its current stats. Mashvisor’s Rental Property Calculator – Investment Payback Palance 3. Real Estate Comps To properly analyze rental property, you need to know its market value. This can be done by comparing it with other similar rental properties in the same area. Mashvisor’s rental property calculator allows you to easily find rental comps for any rental property on the platform. Mashvisor’s Rental Property Calculator – Real Estate Comps Related: How to Easily Find Real Estate Comps The Bottom Line Knowing what to expect from potential investment properties can help you avoid losing money in real estate. Luckily, rental property calculators like Mashvisor’s have revolutionized rental property analysis and made it faster and more accurate. If you want to efficiently analyze vacation rental property or traditional rental property in 2020, be sure to use our calculator. With our calculator, you will be able to make smart investment decisions much quicker. To start your 7-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here. Start Your Investment Property Search! START FREE TRIAL Cap RateCash FlowCash on Cash ReturnInvestment CalculatorMortgageRental Strategies 0 FacebookTwitterGoogle +PinterestLinkedin Alex Karani Alex is an entrepreneur and an experienced content writer focused on personal finance, business, and investing. For over six years, he has contributed to a number of publications, both online and print. When he's not writing or working, Alex enjoys reading, traveling, and the outdoors. 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