Having a positive cash flow property will ensure the success of a rental property. There are two ways to have positive cash flow properties in the US housing market; you can either create them or find them. We’ve talked about creating positive cash flow properties before, so now it’s time to talk about how to find them.
Knowing how to find positive cash flow properties will help you earn high rental income from the get-go. Finding these properties is easier said than done, however. Don’t worry though, it’s not “finding needle from the haystack” difficult. As long as you follow these steps and search diligently, you can find positive cash flow properties quicker than you expect.
1.) Get Your Finances Ready
Before you even consider how to find positive cash flow properties, you will need to have your finances in check. That’s because positive cash flow properties tend to be in more expensive areas, or are at least more expensive properties.
So, before you start looking for money-making investment properties, make sure you are eligible to qualify for a mortgage. To qualify for a loan, you will need a good credit score. A good FICO credit score is at least 630. This score will increase if this is not the first time you have taken a mortgage.
Credit isn’t the only requirement you will need. Many lenders will require that you have up to six months’ worth of mortgage payments in your bank account. You will also need cash for a down payment. A down payment of 20% is common, but just like with credit requirements, the payment may increase if you have previously taken a loan.
2.) Look for Profitable Areas
Once your financial funding has been considered, you can begin your quest on how to find positive cash flow properties. In the broadest of terms, there are two areas to find properties in the US housing market; in-state or out-of-state. Your best bet is the look for properties in your state, and preferably near you. That’s because if any attention is needed for your property, you will not be too far. This isn’t to say out-of-state investing is not wise. On the contrary, out-of-state investing can be great for many investors, especially those investing in turn-key properties.
If you’re having trouble finding an area with positive cash flow income properties, think about places in your location that generate a lot of money. For instance, if your area contains many colleges, consider renting out in a college town or renting to college students. A more common example is to find properties near popular tourist attractions in your area. Airbnb properties tend to thrive in areas with many tourist attractions.
You could rely on word-of-mouth and local advertisements to find properties. You could also turn to the Internet i.e. 90% of real estate investors find rental properties via the web. Websites like Mashvisor can help you find multiple properties an in any area of choice in no time. With Mashvisor, you can find all types of rental properties across the US in an instant!
3.) Analyze the Area
To know how to find positive cash flow properties, you must conduct thorough market and property analysis. No good investment comes from thin air. If you do not study the rental property beforehand, you might be making a huge mistake and taking on more cost than anticipated. Once you have found an area of choice, break it down and analyze numbers and data to see if the area has properties with positive cash flow.
Whether you plan to analyze local or out-of-state areas, use a heatmap. And since Mashvisor never leaves you empty-handed, you can be rest assured that we have a heatmap! All you need to do to find positive cash flow properties with Mashvisor’s heatmap is to insert positive cash flow as your main focus. The areas scoring high in positive cash flow will be displayed. This process saves you a lot of time and energy. It will literally take you few minutes.
4.) Choose a Property
To learn how to find positive cash flow properties in a suitable area, it’s time to narrow down the properties. Consider the property type when looking for a property and how it is impacted by the area. For instance, if the area is a school district, a condo or single-family home would be ideal choices. There are different types of rental properties to consider, including townhouses and others. If you search with Mashvisor, you can narrow down these choices, and many others, to suit your investment goals.
The interior and exterior of the investment property are things you need to keep in mind when knowing how to find positive cash flow properties. How many bathrooms and bedrooms do you want the property to have? Does the property have curb appeal? How about some parking space? The answers to these types of questions can significantly impact the property’s positive cash flow. You should also inspect a rental property before thinking about purchasing it, making sure its functions run smoothly.
5.) Study the Property
The final step in how to find positive cash flow properties is to analyze the investment property. Mashvisor can quickly help you evaluate a property. The property’s cash flow will be presented after adjusting for your estimated monthly expenses. A good positive cash flow is between 8% to 10%, anything over will have great cash flow. Along with the percentage, Mashvisor can break down expenses and the overall property potential through its investment property calculator.
And there you have it. That’s how to find positive cash flow properties to earn you steady income for the long haul. Knowing how to find positive cash flow properties is vital for all investors, as positive cash flow is the essence of lucrative income in real estate. Finding these properties requires research, proper planning, and commitment. Go out there and hunt for rental properties to earn you passive income today!
For more on how to find positive cash flow properties, visit us at Mashvisor.