Even though real estate investing provides many opportunities for success, investing in income properties is not as easy as it may seem at first sight. This is due to the fact that a real estate investor should put a lot of time and effort in the process of finding income properties. The latter includes finding the best places to invest in real estate. In addition, investing in income properties which will be profitable is also a top priority. This means that the investor should take many variables into consideration. All that is needed before he/she comes to the step where he/she is finally ready to buy an investment property. Such variables are, for instance, choosing the best neighborhood as well as the optimal rental strategy; of course, the listing price is of significant importance as well. We should also review other real estate metrics. For example, the potential rental income along with the return on investment and the cash on cash return may speak a lot about the property. Luckily, with the development of technology, successful investing in income properties becomes easier. This is because there are many real estate investment tools to help in finding income properties with good cash on cash return and high rental income, for instance. Today we will explore one of these real estate investments tools. We will see what it is like to be using a heatmap when investing in income properties. But before we start with understanding the process of finding income properties using a heatmap, we need to see what a heatmap actually is.
#1 Using a Heatmap: What Is That?
I am sure you are already familiar with the concept of a heatmap. It is a widely useful tool in various spheres of our everyday live. For example, a heatmap may present the best restaurants in town, the hottest vacation cities, even the voting on the last elections. When used for investing in income properties, using a heatmap has similar functions. The tool will guide you in finding the best places to invest in real estate. This might be showing you the most profitable neighborhood in the city of your choice. However, it might also be presenting you with the properties which are expected to generate the highest rental income. Additionally, using a heatmap is certainly helpful in choosing the optimal rental strategy. As you probably already know, choosing the optimal rental strategy is essential for the success of your rental business. Moreover, the heatmap might be used when you buy an investment property to show you the listing price. Thus, you can compare the listing price of several different properties at the same time. If you are interested in learning more about using a heatmap, make sure to read “How to Find the Best Investment Property Using a Heatmap”.
#2 Mashvisor’s Heatmap
- Using Mashvisor’s Heatmap
Sure enough, when it comes to using real estate investment tools for investing in income properties, there are some that are performing better than others. This is exactly the case with using Mashvisor’s heatmap. Mashvisor’s heatmap helps you in performing neighborhood analysis. It shows a number on the map. Respectively, the highest the number, the better the performance of properties in the specific area. Using Mashvisor’s heatmap will enable you to easily compare real estate metrics. Such are, for instance, the cash on cash return and the potential rental income. The visualization will allow you to quickly find properties with good cash on cash return, for example, which is particularly useful when investing in income properties. Another feature of the tool is that it will help you in choosing the optimal rental strategy for your property. This is so because Mashvisor’s heatmap reveals the results for each rental strategy. The tool compares data such as Airbnb cash on cash return, Airbnb rental income, and Airbnb occupancy rate to traditional cash on cash return and traditional rental income. Consequently, it is easy to spot which rental strategy is most profitable for the location of your choice. If you want to learn more on this topic, check out “How to Choose Rental Strategy: Finding Income Properties Using Heatmap”. Needless to say, all of these features may come very handy when you want to buy an investment property. However, the tool has some special characteristics that are worth paying attention to as well.
- Special Features of Mashvisor’s Heatmap
The tool is presenting you with precise data about Airbnb cash on cash return and traditional cash on cash return. Also, it indicates the Airbnb rental income as well as the traditional rental income for the area. However, it is possible that seeing all these numbers brings some sort of confusion. This is especially the case when investing in income properties and comparing multiple investments simultaneously. That is why Mashvisor’s heatmap uses color symbols. In this way, the tool is not only showing you the cash on cash return scores, but you can easily spot the properties with good cash on cash return, based on their color. There are three symbolic colors in the heatmap analysis: green, orange, and red. When it comes to finding the best places to invest in real estate, the green colored spots on the map symbolize areas performing above the average. If, on the other hand, the location is in orange, we speak about a moderate performance. The red color shows performance below the average one. This color scheme is also very useful when you explore the property prices: green means more expensive and luxurious properties; orange – averagely priced investments; and red – relatively affordable rentals. This is extremely helpful for investing in income properties that fit your budget as well as computing the expected return on investment.
Using Mashvisor’s heatmap can be a great way to find properties with high return on investment and growing rental income. Additionally, you can easily explore metrics depending on your rental strategy. If you are interested in short-term rentals, you can check the Airbnb cash on cash return, Airbnb rental income, and Airbnb occupancy rate. If you want to invest in long-term rentals, traditional cash on cash return and traditional rental income are the values you would need. To learn more about finding income properties with heatmap analysis, you can read “Finding Income Properties Using a Heatmap”. To start looking for, analyzing and investing in income properties in your city and neighborhood of choice, click here.