Let’s take a moment to appreciate how technology has revolutionized real estate. Long, long ago, before things like a heat map generator, investment property calculator, and property search engines like Mashvisor existed, finding and analyzing investment opportunities was done by hand. If you were to analyze an investment property, tiresome spreadsheets were the go-to. Luckily, with the onset of rental property calculators, analyzing investment properties can be performed in minutes.
Property analysis through spreadsheets was time-consuming and exhausting. But before a real estate investor can analyze properties, he/she must find properties first. Finding investment properties was arguably even more strenuous than analyzing them. Fast-forward decades later, and finding investment properties is nothing but a cinch.
What Is Mashvisor’s Heat Map Generator?
Property search engines, like Mashvisor, have made searching for potential investment properties possible to do within minutes. However, when it comes to choosing the right investment property, it’s the heat map generator that we should thank.
A heat map generator is probably nothing new for most people. Heat map is essentially a tool that presents data in a visual form, rather than in a numerical one. News channels, for example, make use of heat maps when they show the results of surveys.
So, what does a heat map generator do for property search engines? It presents real estate investors with properties and areas that are based on the investors’ liking. Mashvisor’s heat map generator allows real estate investors to search for properties based on the metrics they desire. The heat map then presents how “hot” certain rental properties and areas are for different metrics. The map is color-coded. Colors towards red are “hot” and colors towards blue are “cold” for the selected data.
What Data Does Mashvisor’s Heat Map Generator Generate?
Mashvisor’s heat map generator, which generates data from rental comps and trends backed with predictive analytics, provides investors with vital forms of data. These data break into four main categories: cash on cash return, rental income, listing prices, and Airbnb occupancy rates.
Cash on Cash Return
One of the most important return on investment metrics is the cash on cash return. Cash on cash return is the perfect metric to see how much of a return real estate investors will receive on their investment property. This metric works just fine, regardless if the property was purchased fully in cash or through a mortgage. Here’s the formula for cash on cash return:
Cash on Cash Return: Net Operating Income / Total Cash Investment
A good cash on cash return is 10% or more. Rental properties financed through a mortgage tend to have higher cash on cash return, because less cash is put into the investment. Net operating income is simply the annual rental income subtracted by operating expenses.
When it comes to Mashvisor’s heat map generator, the potential cash on cash return for both traditional and Airbnb investment properties will be presented. This data will be extremely helpful when trying to decide whether a potential property will be a good investment or not.
Rental income is undoubtedly the main source of profit in real estate investing. Typically, the location of the rental property can be a huge determinant of how much rental income a property will generate. The heat map generator will help you find areas and properties that have a projected rental income close to what you would like to earn.
How is rental income determined by a heat map? There are a number of ways, the biggest of which, rental comps, is automatically incorporated into the heat map generator. The potential rental income can almost be thought of as a baseline. A good way to increase rental income is to renovate the property and add more amenities.
The listing price of a property is the most significant incentive when it comes to buying an investment property. Just like with rental income and cash on cash return, the heat map generator will find the listing prices of both traditional and Airbnb properties. If you’re on a budget, and 99% of investors are, using the heat map will set you up with the best property according to your budget. The heat map generator also considers if you’re financing through a mortgage if you set it to do so. Simply enter the down payment and the loan plan. The interest rates are set based on the area selected.
Airbnb Occupancy Rates
Occupancy rates can be difficult to determine… but not if you’re using Mashvisor’s heat map generator. The heat map allows Airbnb investors to find locations with high Airbnb occupancy rates. These occupancy rates tend to be directly proportional to the Airbnb rental income, meaning that the higher the occupancy rate, the higher the projected rental income. Like with the other data mentioned in this blog, rental comps are used to determine the occupancy rates of areas. Mashvisor also uses data directly from Airbnb, giving you the most accurate data imaginable.
Related: 4 Don’ts for Airbnb Occupancy Rates
What Other Data Can Investors Receive with Mashvisor’s Property Search?
There’s much more to Mashvisor’s search engine than the heat map generator. Much more information is available than just rental income, cash on cash return, listing prices, and Airbnb occupancy rates. The cap rate, which is a similar metric to cash on cash return, of properties and areas is also presented. Projected cash flow, arguably the most important number for real estate investors, is also given per property. The property search also allows you to search for investment properties based on the number of bedrooms and bathrooms that you are interested in. It also includes property types, like single family homes, multifamily homes, and townhouses. Mashvisor also gives each property a score based on its investment potential, another piece of information that will help you determine if a property is worth the investment.
To Sum It All Up
A heat map generator is the perfect wingman. It will help suit you up with the best investment property based on your situation and expectations. Whether you’re looking for a property with high cash on cash return, lucrative rental income, affordable listing price, and/or attractive Airbnb occupancy rates, Mashvisor’s heat map generator will help you find it all.