In a previous blog, we broke down the difference between Real Estate Investing for Positive Cash Flow vs. Appreciation and came to a conclusion that many real estate investors prefer investing for positive cash flow. If you’re also looking to make money in real estate investing this way, then you must be wondering how to find positive cash flow properties.
One thing to keep in mind about positive cash flow properties is that you can either make them or find them. If you already own an investment property and want to learn how to make it a positive cash flowing one, read this blog. If you’re still new in real estate investing and want to learn how to find positive cash flow properties to invest in, keep on reading!
How to Find Positive Cash Flow Properties: Study Your Location
The first thing a real estate investor should do before making any investment decision is to perform a real estate market analysis. This allows him/her to study the different aspects of the market (location) which is important because the location is the main factor that determines profitability in real estate investing. Thus, the first step is to break down your real estate market and analyze the different numbers and data to see if it has properties that would generate positive cash flow.
To know how to find positive cash flow properties, property investors need to be open to opportunities wherever they come. Your city or local neighborhood may not necessarily be the best places to buy an investment property. In this case, you’ll have to start looking for investment opportunities in other housing markets (out-of-state real estate investing) if you truly want to succeed as a real estate investor.
Looking for a way to analyze a real estate market? The best and most efficient way is through Mashvisor. Simply type the name of the city where you wish to find an investment property and click “Start Analyzing.” You’ll then see a virtual map of the various areas in the city along with each area’s median property price, cash on cash return, and cap rate (for both traditional and Airbnb investments).
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
How to Find Positive Cash Flow Properties: Search for High Rental Income
When learning how to find positive cash flow properties, one thing to understand is rental income. In the cash flow calculations, real estate investors take their monthly rental income and subtract their monthly rental expenses. Thus, to generate positive cash flow, it’s crucial to have a rental income that is high enough to cover the rental expenses and leaves some extra profits for you as a real estate investor.
Therefore, after studying and analyzing your real estate market of choice, the next step in how to find positive cash flow properties is to look for neighborhoods and areas with the highest rental incomes. It’s very likely that you’ll find rental properties that generate positive cash flow in such areas.
While you’re using Mashvisor to analyze different locations, make use of the Heat Map. With this tool, you can sort your search results by setting your criteria for finding areas with the highest rental income. The best thing about this real estate investing tool is that it uses using visual cues. Thus, you can set the heat map to indicate the areas with the highest rental income, and you’ll immediately see the areas as either hot or cold for this feature. This makes it easier for a real estate investor to compare the different neighborhoods and see which one has positive cash flow rental properties. Want to learn how to use this tool? Read this blog!
To start using Mashvisor’s Heat Map for finding the best investment properties with positive cash flow across the US housing market, sign up for Mashvisor now.
How to Find Positive Cash Flow Properties: Find Investment Properties
Now you can start looking for your future investment property. There are different types of properties to consider (like single-family, multi-family, condos, townhouses, etc.). Property investors need to decide what type of property to buy that is in demand in their locations. For example, a single-family home would be the best choice if you’re investing in a school district. Rental properties with high demand usually have higher rental income, meaning they’re positive cash flow properties.
The best way to narrow down rental properties in your area is to use a property finder. Of course, since we like to make the process of real estate investing easier for beginner real estate investors, we offer a quick and efficient property finder tool! You can now search for and find the best investment properties in the cities of your choice based on various criteria (like your budget, rental strategy, and the number of bedrooms and bathrooms you want in the investment property).
With a click of a button, you’ll be given a list of the best and most profitable properties in the chosen location. You’ll get to see each property’s address, listing price, estimated value, and cash on cash return (both traditional and Airbnb) and more!
Do you have a free Mashvisor account? Click here to use our Property Finder and find positive cash flow properties in a matter of minutes!
How to Find Positive Cash Flow Properties: Analyze the Investment Property
The final step is something any real estate investor has to do before making a purchase. The investment property has to be analyzed to know the amount of expected rental income and rental expenses. Once you’ve found an investment property with our property finder, you can view the property page which shows you the comparable rental income and rental expenses of the said property.
Another useful tool that will help in how to find positive cash flow properties is the investment property calculator. With the help of traditional and predictive analytics, this tool evaluates the profitability of a property (regarding cash flow, cash on cash return, and cap rate) and then shows you the optimal rental strategy that’ll generate positive cash flow – traditional or Airbnb. Where can you find this tool? You know we’ve got your back; just sign up to Mashvisor and use our calculator to start analyzing any investment property across the US housing market!
The Bottom Line
There you have it – how to find positive cash flow properties in the US housing market. It might be a lengthy process for beginner real estate investors but, with the right tools, it won’t be too much of a hassle. Our tools have proven to turn a 3-months’ property search into just 15 minutes! So what are you waiting for? Click here to start out your 14-day free trial with Mashvisor and find your first positive cash flow property today.
To learn more about how we help property investors make faster and smarter real estate investment decisions, click here.