If you are thinking about becoming a real estate investor, then it might be the time to try a different approach to real estate investing. Being new to real estate investing can be an intimidating idea; after all the process of purchasing a real estate property involves many aspects. The process can include understanding the best locations, the median values of real estate properties in your target location, and the financial profit of the investment. But what if there was a real estate investing tool that could give you the opportunity to analyze investments from the comfort of your own home? Mashvisor’s investment property calculator offers you just that and more.
Mashvisor’s investment property calculator is a tool that gives actual and interested real estate investors the ability to search for rental properties with a click of a button. However, the best part comes in calculating and predicting financial outcomes from a potential investment based on the costs provided by the calculator or input by the user. Using accumulated data from various rental properties from different neighborhoods in cities around the US, Mashvisor’s investment property calculator gives investors an opportunity to take their investment boundaries to an unlimited zone. Gone are the days of hiring real estate agents to find you an investing bargain; the age of Mashvisor’s investment property calculator is here instead.
The investment property calculator does not only give the returns based on what is entered, but also provides insights by using predictive and comparative data and algorithms.
Key Calculations of the Investment Property Calculator Include:
- Cash on Cash Return: The cash on cash return equals the net operating income (NOI) over the total cash investment, which means that you can differentiate between whether you paid for your investment property all in cash or with a loan. Experts recommend going for investments with cash on cash return of at least 8% to assure good profitability.
- Capitalization Rate: The cap rate is the ratio of the net operating income over the real estate property asset value. For example, if the NOI is $10,000, and the property value is $100,000, the cap rate would be 10%. If the cap rate is below 10%, it is advised to not invest in that income property.
- Positive/Negative Cash Flow: Cash flow is basically the difference between the monthly rental income and the monthly expenses of a rental property. Having negative cash flow means that the real estate investment is a bad one, because the expenses exceed the revenues. Mashvisor’s rental property calculator gives potential and existing real estate investors cash flow details after all the numbers have been added.
Unique Features of Mashvisor’s Investment Property Calculator
Now what differentiates Mashvisor’s investment property calculator is the work put into it through data collection to not only calculate the finances of your investment in the form of cap rate, rental income, and cash on cash return. It offers way more than this – Mashvisor gives you a detailed neighborhood analysis is the city of your choosing, and gives a complete property analysis after you have selected the neighborhood.
Mashvisor’s search map makes it easy for real estate investors to find investment properties in any area they want to invest in. The search gives you an overall map view of a certain city with names of neighborhoods and a general overview of the best ones. Using the rental property calculator filter allows the user to have a view on which neighborhood is a better investment choice based on different categories. The data that can be used to compare neighborhoods in general includes the listing property price, the Airbnb and traditional cash on cash return, the Airbnb and traditional cap rate, the Airbnb and traditional rental income, and the Airbnb occupancy rate. Selecting any one of them would give each neighborhood a color, which refers to a scale meter on the bottom of the screen.
The neighborhood insight option allows you to get more insight about the optimal property type, the optimal bedroom number, and the optimal rental strategy to use (Airbnb vs. traditional). Mashvisor also provides investment property buyers with the Mashmeter, which works in a percentage form to give each neighborhood a score that can be comparable to other neighborhoods in the same or different city.
- Mashmeter: The Mashmeter is a unique tool available only at Mashvisor. It gives the investor an evaluation if investing in a particular neighborhood will be good or bad investment. The score will be given in a percentage form according to qualitative and quantitative data collected.
- Optimal Rental Strategy: The data that was collected allows Mashvisor’s investment property calculator to give the user an evaluation for the best rental strategy for an investment property a particular neighborhood. The optimal rental strategy will be traditional or Airbnb.
Investment Property Analysis
The investment property calculator goes into more details when analyzing a property that you have selected. It gives you the chance to make the calculator more interactive and to start being creative with the numbers according to how you think you’ll be able to finance the investment, cash flow expectation, and expenses.
The analysis will initially provide real estate investors with rental strategy comparisons for both Airbnb and traditional rentals. The comparison criteria include rental income (which can be edited), monthly expenses, cash flow, CoC return, cap rate, and occupancy rate. This comparison makes it easier for real estate investors to understand why and how a certain strategy is better for that investment property by showing the numbers.
Secondly, you look at the financing/mortgage section of the rental property calculator. That section allows the user to choose the financing method for that property: either mortgage or cash. Selecting the mortgage option allows the real estate investor to adjust the down payment, the loan amount, the loan type, and the interest rate, which gives investors a better understanding of the future cash flow depending on the mortgage details.
Thirdly, the investment property calculator deals with the expenses related to the rental property. The expenses are divided into two parts: one time costs and recurring costs, both of which can be edited easily. The one time costs include inspections, repairs, furnishing, and any other first time cost the real estate investor wants to add to the list. Recurring costs are those that are most common in all rental properties, such as insurance, utilities, property management, property tax, and any customized expense that the user wants to add.
Being new to real estate investing shouldn’t be as intimidating as it was before, because with Mashvisor’s investment property calculator, you will have your own personal guide on what to expect from your real estate investments. Real estate investing has never been easier and more accessible to people who were afraid to make that leap into the investing world.