One of the most important parts of real estate investing is finding good real estate deals. At the same time, finding good real estate deals is one of the most difficult parts of the business. Many people are in fact turning to real estate with the hopes of building wealth, and as a result, it is becoming increasingly challenging to find a profitable and affordable real estate deal before the next investor pounces on it first. That’s why, as a real estate investor, you need to be equipped with the right tools that will help you find deals amidst the fierce competition in today’s housing market. In this guide, we lay out the 3 best real estate investment tools that you can use to find the best real estate deal.
How to Find the Best Real Estate Deal
1) Use a Real Estate Heatmap
The first step in the process of finding a good real estate deal is to run a neighborhood analysis in order to find a location that not only has affordable real estate but also a high potential for returns. The best way to do this is by using a real estate heatmap. A real estate heatmap is in principle similar to heatmaps used in weather forecasts, but instead of displaying temperatures, it displays neighborhood data. It uses different colors to represent different values on the map, which allows investors to see how different neighborhoods within a city are performing according to specific real estate metrics. Neighborhoods with the highest rates for the selected metric will be shown in green, while those with the lowest rates will be shown in red. This makes the process of narrowing down neighborhoods and finding real estate deals quicker and easier.
Mashvisor’s Heatmap Tool works using rental comps data and predictive analytics to give real estate investors the most accurate results. You can search for any city in the US housing market and analyze its major neighborhoods using the following filters:
- Listing Price: By activating the Listing Price filter, you can see which neighborhoods have cheap houses compared to the median price of the city. The red color on the map will show all the neighborhoods with the lowest listing price.
- Cash on Cash Return: Using this filter, you can see the average cash on cash return you can expect from a real estate property in each neighborhood. The cash on cash return basically tells you if the initial cash invested in a property is worth the returns. You should, therefore, be interested in neighborhoods highlighted in green.
- Rental Income: This filter will show you how much rental income you can expect in each neighborhood, for both the traditional (long-term) and Airbnb (short-term) rental strategies. You can identify the areas with the highest rental income by targeting the green color on the map.
- Airbnb Occupancy Rate: If you’re an Airbnb investor, this final metric will help you identify the best neighborhoods for Airbnb investing. Neighborhoods with the highest Airbnb occupancy rate will be shown in green.
Using all the filters above, you can easily identify the best neighborhood for real estate investing in your city of choice.
Related: Real Estate Heat Map: A Revolutionary Tool for Neighborhood Analysis
Want to give Mashvisor’s Heatmap a Try? If you sign up now, you can get 20% off after your 14-day free trial!
2) Use a Property Finder
Now that you’ve found a profitable neighborhood, the next step is to find the right real estate deal for you. There are plenty of investment properties listed for sale in a neighborhood, but in order to be a successful investor, you need to make sure to find a property that matches your investment goals. What type of property are you looking for? How much money are you able to invest? Are you interested in investing for the long-term or short-term? Are you looking for monthly positive cash flow, long term appreciation, or both? These are all examples of investment goals that you should set when it comes to searching for a real estate deal.
The best way to find property deals that match your investment goals is by using an online Property Finder. It’s a tool that uses machine-learning algorithms to find investment properties for sale based on the user’s search criteria. Mashvisor’s Property Finder allows you to set your search criteria using a number of filters. These filters include:
- Location: You need to specify which area(s) you want Mashvisor to search for real estate deals in. You can choose to search up to 5 different locations at once.
- Budget: You need to set the range of your budget to keep the search within. This will filter out any real estate deal that is too high above your target price, and as a result, you can be sure to search for cheap investment property for sale only.
- Type of Real Estate: You need to choose the type of property that you would like to invest in. You can select one (or more) of the following options: Single Family Home, Multi Family Home, Condo/Coop, or Other.
- Rental Strategy: You need to select your preferred rental strategy. There are two main strategies that you can opt for: traditional or Airbnb rentals. Depending on your preferred strategy, you can narrow down the search to only include traditional real estate deals or Airbnb real estate deals.
- Number of Bedrooms and Bathrooms: You need to specify the number of bedrooms and bathrooms that you would like the investment properties to have, so you can find real estate deals based on the numbers you provide.
Once you’ve set all the filters, the Property Finder will scour the market that you’re interested in investing in and provide you with a list of the best online real estate deals that are compatible with your filters.
Related: How to Find Investment Properties Using a Property Finder Tool
3) Use an Investment Property Calculator
Being provided with a bunch of online deals that match your search criteria is not a guarantee that you’ll end up with a positive cash flow investment with high returns. Not every listed property will, in fact, make for a good real estate deal. The final step is to analyze the different properties in order to choose the most profitable rental property out of the ones listed. To do this, you need another important real estate investing tool: the investment property calculator. This tool is used to compute all the important metrics needed to evaluate the profitability of an investment property.
You can use Mashvisor’s Investment Property Calculator to obtain these metrics for each listed property. They are actually readily calculated, based on rental comps data from the local housing market. All you have to do is click on the property listing that you’re interested in, and this will lead you to the investment property calculator page. After inputting your financing method and cash down payment, the calculator will display the following metrics:
- Rental Expenses (One-time startup costs and recurring monthly expenses)
- Rental Income (traditional and Airbnb)
- Cash Flow
- Cash on Cash Return (traditional and Airbnb)
- Cap Rate (traditional and Airbnb)
- Occupancy Rate (traditional and Airbnb)
- Optimal Rental Strategy
This analysis is available for each listed property. As a result, you can easily compare the different properties to each other based on the metrics mentioned above, and choose the best investment property for you to invest in.
Related: The Secret to Successful Real Estate Investing: Investment Property Calculator
How to find real estate deals? The answer is simple: with Mashvisor. Mashvisor provides investors with all the necessary tools for analyzing and finding investment property for sale. The best thing about them is that you don’t have to be tech-savvy to use them. They are all user-friendly and suitable for any real estate investor, professional and beginner alike.
Sign up for Mashvisor to start using these tools and find the best real estate deal in any US housing market.