If you are looking for a passive income stream, learning how to get into rental properties may be the thing for you. Although some may argue that flipping houses, property management, or becoming a real estate agent are the best real estate career paths, none can bring in passive income. On the other hand, buying rental property and subsequently hiring a property manager is one of the easiest ways to make money in real estate. That is, when you have Mashvisor on your team!
In this article, we will focus on how to become a real estate investor using Mashvisor. But before we get into how Mashvisor can help you, let’s look at what you need to decide before you get started.
What You Need to Decide Before You Get Started with Rental Properties
Before buying a rental property, there are a few things to decide so you know where to begin with your search for an investment property.
Size of Investment
The price of the rental investment property is not your only cost. There are also closing costs, repairs, and perhaps even furnishing for the intended purpose. Decide how much you are willing to spend in total. It is important to stay cash-flow positive when first getting into rental properties. Knowing your costs upfront will help you achieve this.
Investment Property Type
There are many kinds of real estate you can buy and rent out: a single family house, a multi family home, a condo. Each type attracts a different target group of tenants. It is good to think about who you would want to occupy your property before starting your search.
When first getting into rental properties, it seems easy to buy cheap abandoned properties and turn them into top-notch rentals. But repairs and upgrades are often more expensive than you think and take more time than you want to spare. So set limits on the condition and the amount of work needed to get the property ready to rent out. The fewer things that need fixing, the sooner you will start renting it and generating cash flow. Risky investments are not how to get into rental properties for the first time.
Do you want your rental property to be close to home or do you want it to double as your vacation home? If you are willing to invest in housing markets outside your city, take a look at the most profitable locations for traditional rentals in 2020 and the most profitable Airbnb locations for 2020.
Owning rental properties is one thing, managing them is completely another. You can do it yourself if you live nearby and it is just one property. But when you start renting houses on Airbnb, for instance, you will most probably need some help checking guests in and out all the time. Long term rentals are much easier to manage. Tenants are usually responsible for cleaning, shoveling snow, mowing the lawn, etc. Condos usually come with some property management provided, which adds to the cost.
How to Get into Rental Properties Successfully with Mashvisor
To start your own rental property business, you need to be very good at finding income properties. Not just any location will bring you the rental income you want. The two general groups of clients you would have to consider when choosing a real estate market are:
- Tenants. For long term rentals, look for family-friendly locations with access to parks, shopping areas, eateries, and schools.
- Tourists. For short term rentals, look for the best locations within walking distance of downtown and major landmarks, with access to public transport. Business districts are also a good place to look because people traveling for work prefer staying close to the office.
That is why you need to do a complete market and rental property analysis before buying investment property. Mashvisor is a platform that offers handy tools to help you in finding investment properties fitting your criteria and expectations. Here are some of the tools that any real estate investor would find helpful.
Heatmap Analysis Tool
The Mashvisor heatmap helps if you do not know where and how to find rental properties for sale that meet certain criteria. It lets you see how different areas perform in terms of listing prices, traditional and Airbnb rental income, traditional and Airbnb cash on cash return, and more. This way you can choose an area to invest in based on the state of its rental market.
With this neighborhood analysis, you can identify good and bad neighborhoods. For example, bad ones may be marked in red when you select the Cash on Cash Return filter. Try it out for yourself by signing up for Mashvisor.
Rental Property Finder
The Mashvisor property finder lists the best rental properties in your area of choice based on cash on cash return. This way you can easily choose the best one(s) that fits your real investing needs.
To learn more about the property finder and how it’ll help you get into rental properties, click here!
Rental Property Calculator
You can enter your own startup costs and mortgage details in the Mashvisor rental property calculator to get an accurate estimate of the cap rate and cash on cash return. This is all necessary for planning your property management and cash flow. You’ll also get to see your expected occupancy rate as well as other key property metrics.
Traditional vs Airbnb Rental Property Analysis
The Mashvisor rental property calculator also lets you compare the expected rental income and return on investment metrics from Airbnb vs renting out to help you decide on a rental strategy. You can also see other Airbnb and traditional rental properties in the area and benchmark the ones you are interested in buying. Compare by the number of bedrooms and bathrooms, Airbnb occupancy rate, Airbnb ratings, and other Airbnb metrics. This will all help you make an informed rental property investment.
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.
One of the best things about Mashvisor is that real estate data is accurate and real-time. The data for Airbnb properties comes directly from Airbnb and the MLS and is verified using data from real Airbnb hosts and the traditional rentals data – from reliable sites like Zillow and the MLS.
Using all the tools Mashvisor has to offer, you can start your own rental property business with confidence. Finding income properties and earning optimal income will be easy and fast.
Ready to get started with rental properties with Mashvisor? Start your 7-day free trial now.