Real estate investing has never been this easy before as with Mashvisor’s rental property calculator! As a real estate investor, one of your jobs to succeed in the investing business is to evaluate an investment property before buying it to ensure that it will be profitable. A beginner real estate investor might ask: How can property investors even do that?
Well, they need a real estate investing tool that provides them with the numbers and calculations necessary to evaluate a real estate investment property. And since the real estate industry is evolving in this digital day and age, investors need to keep up with the changing demands and be prepared with the needed resources to achieve success in this industry. Here is where the rental property investment calculator comes in handy!
Keep reading as we explain what a rental property calculator is, its different features, and why Mashvisor’s version is the best one in town!
What Is a Rental Property Calculator?
The rental property calculator – also known as the investment property calculator – is an online real estate investing tool in which real estate property investors input some basic information about a real estate investment property (such as the purchase price, the financing method, the cash investment, etc.). The tool then provides them with all the crucial numbers needed to decide whether or not to go for this income property. In short, it helps you determine whether a rental property that you want to invest in can be profitable or not.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Why Does Every Real Estate Investor Need One?
Before real estate property investors got hold of an investment property calculator, they would spend weeks collecting data on the real estate market and investment properties, calculating all the necessary numbers and coming up with the expected rental income, expenses, and profit from the targeted rental property. A rental property tax calculator will come in handy as well in dealing with the required tax payments. The process can be tedious and time-consuming. What if there is something that can be used to make data collection and analysis more efficient?
There are so many real estate investment calculators available. Bear in mind, however, that while there are different calculators available, not all of them are the same. With Mashvisor’s rental property calculator, the entire process can be done within minutes! Nowadays, a real estate investor who uses it saves lots of time and effort. Thus, such a tool adds a lot of convenience to the life of a real estate investor. It truly takes real estate investing to new level. With a rental property profit calculator, investors do not need to spend a lot of time researching data or going over numerous spreadsheets. It is helpful not only for beginners but to also those with extensive experience in the industry.
Accuracy is another reason why every real estate investor needs such a helpful tool. There is always the risk of making a mistake when calculating by hand or when using a spreadsheet. With so many factors to consider and figures to look into, errors can happen especially when data collection and analysis are done manually. Thanks to technological advancements, real estate investors can use a digital tool to reduce mistakes and make the process easier and more efficient. However, it’s not ideal to rely solely on digital tools. The human element is also important.
Mashvisor’s rental property calculator uses traditional and predictive analytics as well as comparative and historical data and provides real estate property investors with the most accurate results, which eliminates the risk of making a decision based on wrong calculations.
Overall, every real estate investor needs a rental property calculator because it allows them to make smart real estate investing decisions. What used to be a manual process that is time-consuming and prone to mistakes is now made more efficient by using this digital tool. To get immediate access to the best rental property calculator there is, sign up for a Mashvisor trial now.
Mashvisor’s Rental Property Calculator: What Does It Calculate?
Mashvisor’s property profit calculator provides real estate property investors with the numbers they need in order to estimate the expected rental income, expenses, and profit from a certain income property. The three most important numbers (or metrics) are:
Cash Flow: In simple words, cash flow is the difference between the monthly rental income and the monthly expenses of a real estate investment property. This number could be positive or negative. Obviously, as a real estate investor, you always want to invest in positive cash flow investment properties! Negative cash flow means the expenses exceed the profits, which means that you’re actually losing instead of making money from your income property. Mashvisor’s rental cash flow calculator provides property investors with cash flow details after all the numbers have been added.
Capitalization Rate: Another important metric that the calculator can provide is the capitalization rate or cap rate. It is the ratio of the net operating income (NOI) over the property’s value. For example, if the NOI of an investment property is $10,000, and its value is $100,000, the cap rate would be 10%. Real estate property investors are advised to invest in a property with a cap rate above 10%. Mashvisor’s tool provides readily calculated cap rate ratios for thousands of investment properties across the US housing market!
Cash on Cash Return: The cash on cash return is the NOI over the total cash investment. Calculating CoC return means real estate property investors can determine the expected profits they’d make whether they pay for the income property all in cash or with a mortgage loan. In real estate investing, investment properties with cash on cash return of at least 8% are good investments. Similar to the cap rate, Mashvisor’s rental property mortgage calculator also provides real estate property investors with the cash on cash return for investment properties.
Related: What is a Good Cash on Cash Return?
Investors can use Mashvisor’s rental property calculator to check the cash on cash return provided by the investment properties.
What to Look for in a Real Estate Investment Calculator
A real estate investment calculator tool will help you know if an investment property is worth investing in. With so many calculators available nowadays, how can you choose the best one? Well, there are several important things to consider.
- Integration of tools that help find profitable investment properties: What you need is an all-in-one real estate calculator. You need one that enables you to search investment properties and analyze multiple properties faster and in a more efficient manner.
- Estimates of relevant data including rental income, cost, and occupancy rate: It takes a long time to do your own real estate market research and analysis. You need a reliable calculator that collects all the necessary information and analyzes it for you. It can show rental income, cost, and occupancy rate estimates for each property listing in a particular area.
- Features to calculate ROI: You need a rental property ROI calculator that can provide details such as rental occupancy rate, cap rate, and real estate cash flow. It should also enable you to add other information, such as property price, type of mortgage, downpayment, loan amount, loan term, as well as interest rate.
- Auto-generated real estate comps: Look for a calculator that covers real estate comps specific to the real estate investment that is for sale. It should also let you compare real estate comps of different listings.
- Analytics (traditional and Airbnb): Another feature to consider is traditional and Airbnb analytics to help you understand rental strategies. In this day and age when landlords have different ways of renting out properties, it pays to understand all of them so you can make better decisions.
Special Features
Mashvisor rental property calculator also come with several special features, such as:
Neighborhood Analysis
What makes Mashvisor’s rental property calculator different from the rest is that it provides real estate property investors with all crucial real estate investing numbers (like the median property price, average square foot price, average rental income, occupancy rate, the average cash on cash return, cash flow, and average cap rate) at the neighborhood level! It is such an important feature as it offers relevant information on very specific areas when looking for profitable properties. As a result, the real estate investor can use this data to compare different neighborhoods in hundreds of US cities and towns and decide how profitable a certain neighborhood is and whether or not it’s good for real estate investing.
Related: Hottest Airbnb Markets 2022: Where Should You Invest?
Rental Property Analysis
Now, after getting all the necessary information on the neighborhood level, Mashvisor’s rental property calculator will give real estate property investors even more insight into the best investment property type (house, townhouse, single-family home, multi-family home, condo, etc.) in the area. Through the rental property income calculator, Mashvisor will provide the basic numbers (rental income, expenses, cash flow, cash on cash return, cap rate, and occupancy rate) of each income property in that area in order for the real estate investor to decide which one is most profitable.
Mashvisor’s rental property investment calculator also gives estimates of both one-time costs and recurring expenses associated with buying, managing, and renting out an investment property. Not only that, but the real estate investor can play around and change these numbers and determine the best financing strategy based on the results. For example, you can change the amount of the down payment, and the rental property calculator will, in turn, recalculate all numbers related to the investment.
Mashvisor’s rental property calculator also gives estimates of both one-time startup costs and recurring expenses from purchasing, managing, and renting out an investment property.
Optimal Rental Strategy
In real estate investing, one factor that determines how profitable an income property will be is the rental strategy. Property investors could rent out their investment properties either as traditional rentals or Airbnb rentals. Each rental strategy has different rental income, expenses, occupancy rate, cash on cash return, and cap rate. To decide which rental strategy is optimal, a rental property calculator is needed!
Mashvisor’s own tool also helps real estate property investors choose the optimal rental strategy for the income property. How? Easy! All data provided by the tool is disaggregated into two categories based on the rental strategy: traditional and Airbnb data. Based on the real estate investor’s input in addition to the neighborhood and property analysis, Mashvisor will tell you which rental strategy is most profitable.
Related: Airbnb vs Traditional Renting: What’s the Best Real Estate Strategy?
Other Features
Several other features are worth looking into, including:
Mashmeter
Mashmeter is a tool that simply tells property investors how good or bad a neighborhood is for real estate investing, presented as a percentage. This allows a real estate investor to easily compare between neighborhoods. The score is highly reliable as it’s based on actual quantitative and qualitative data and Mashvisor’s analysis.
Optimal Number of Bedrooms
The final feature of Mashvisor’s tool is the possibility to give the real estate investor an indication of the number of bedrooms that an investment property should have to achieve the best profits in a certain neighborhood.
Conclusion
Are you a beginner in real estate investing? Or an experienced real estate investor? Whatever level you’re in, it takes a great deal of research, skills, and determination to be successful in the property investment industry. There are so many factors to consider and data to analyze. It can be challenging and overwhelming at times. The good thing is, there are also a lot of resources – online and offline – to guide you and expand your knowledge which is essential in this evolving industry. It is also wise to take advantage of available tools that will make certain processes easier and more efficient. One of them is a real estate investment calculator.
Keep in mind that not all calculators are the same so it’s best to know the different features to look for so you can choose the right one. Do your research and compare different calculators. You may also want to seek advice from other real estate investors and see the investment calculators that they use. At the end of the day, it’s important to use one that can make your job easier.
So, whether you’re a beginner real estate investor who is looking to buy your first investment property, or an experienced real estate investor who is searching for your next income property, be smart and make use of Mashvisor’s rental property calculator! This real estate investing tool will guarantee that you make the best investment decisions and find profitable investment properties in any state, city, and neighborhood in the US housing market!
To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.
