So, you’ve decided to make the big decision to invest in a real estate property. The world of real estate investing is vast, and starting a property search can be overwhelming for a beginner real estate investor. With all the listings and millions of investment properties available, how do property investors ensure finding the best investment property out there?
Thanks to the ever-developing technologies, real estate investing is now far different from how it used to be. Property investors now have access to a number of real estates investing tools that help them make smart investment decisions for a successful career. In this guide, we’re discussing 4 of the most important real estate investing tools that property investors need to conduct a successful property search.
Thus, keep reading to learn how to perform a real estate property search to find the best investment properties with a high return on investment.
Investment Property Search Tool: Cap Rate Calculator
The cap rate is one of the most widely used real estate metrics to measure the return on investment of a rental property. Seeing as the goal of property investors is to make money from real estate, you need to calculate the cap rate when performing a property search to ensure finding profitable investment properties that will generate a good return on investment.
Furthermore, cap rate corresponds to the level of risk associated with the investment property: low cap rates correspond to a lower level of associated risks and vise versa. When performing a property search, you want to find investment properties with higher cap rates – higher risks yield higher profits.
Related: Cap Rate in Real Estate Investing: Everything You Need to Know
Calculating the cap rate before buying a rental property is important, yet it seems a hard task to compute it manually. This is why real estate investors need the cap rate calculator – a particular type of rental property calculator – when performing a property search.
As mentioned, when performing a property search, every real estate investor aims to find a profitable investment property. One indicator of profitable investment properties is positive cash flow – when the rental property generates a monthly rental income higher than its monthly expenses. The cap rate calculator estimates the net annual income and the overall property costs. Thus, this real estate investing tool is useful for doing an investment property analysis while conducting a property search to find positive cash flow properties.
In addition, during a property search, real estate investors usually compare different investment properties. The cap rate calculator computes the values of different investment properties within seconds, further making the comparison process faster and easier.
To start analyzing and comparing investment properties in your city and neighborhood of choice, click here.
Investment Property Search Tool: Cash on Cash Calculator
The cash on cash return calculator (another type of the rental property calculator) is an important real estate investing tool that property investors should use in their property search. The cash on cash return is another real estate metric used to measure the return on investment. However, what makes it different from the cap rate metric is that it shows property investors a percentage of the profits they should expect taking into account how much cash they actually invested. The cap rate, on the other hand, measures profitability regardless of the financing method – all cash or mortgage.
The cash on cash return calculator does more than just compute the return on investment during a property search. This real estate investing tool helps property investors find the best investment property based on their preferred financing method. Say a real estate investor decided to take a mortgage to buy a rental property. Using the cash on cash return calculator, he/she can play around with the down payment level, the loan amount, the loan type, and the interest rate to find the best investment property. The same thing goes for paying fully in cash – it shows property investors the return on investment based on the amount of cash they actually invest.
This saves real estate investors a lot of time when performing a property search based on the financing method. The cash on cash return calculator also allows real estate investors to analyze the profitability of different investment properties to compare them and identify the best one that generates the highest return on investment. Thus, the cash on cash return calculator is essential when performing a property search to make smart real estate investing decisions.
Related: Cash on Cash Return Calculator Tells You More Than Just Numbers
Mashvisor’s Rental Property Calculator
If you’re wondering where you can find a cap rate calculator and a cash on cash return calculator, then you’re in luck! Mashvisor offers real estate investors a rental property calculator—a real estate investing tool that is user-friendly and easily accessible online. This tool allows you to calculate the different values related to an investment property, including both cash on cash return and cap rate, in addition to the cash flow and occupancy rate. And if you’re looking for a free tool for estimating the Airbnb rental income of any property in the US, you can use Mashvisor’s Airbnb calculator.
Mashvisor helps real estate investors minimize the effort needed for calculating values manually and turns 3 months of property search into 15 minutes.
Click here to start your property search using Mashvisor’s rental property calculator.
Investment Property Search Tool: Investment Property Finder Tool
A property finder is a digital tool used to find investment properties based on the real estate investor’s preferences and search criteria. For example, when performing a property search, one real estate investor might be interested in a specific type of investment property in a certain city. The investment property finder will allow them to easily set their preferences by using filters, and the real estate investing tool will provide them with a list of properties that match their criteria.
However, not all investment property finder tools are the same. For example, Mashvisor’s property finder tool makes use of a wide range of data comps, analytics, and metrics to provide real estate investors with lists of investment properties across the US housing market with the highest potential for profits.
Mashvisor’s investment property finder tool also takes into account your budget, desired returns, and property type to provide you with a list of properties in your city/cities of choice that have the highest potential for profits based on their cap rate, cash on cash return, and occupancy rate. Property search can’t get any easier than this!
Related: How to Find Investment Properties Using a Property Finder Tool
Investment Property Search Tool: Heat Map
The heat map is a widely used tool in various spheres of our everyday life, including real estate investing. The tool will guide real estate investors in their property search to find the best places to invest in real estate. The heat map helps real estate investors in finding:
- The best neighborhoods in your city
- The best investment properties which are expected to generate the highest return on investment
- The optimal rental strategy (traditional or Airbnb)
- The listing price to easily compare the listing prices of several different properties at the same time.
Needless to say, all of these features are very handy when performing a property search.
Related: How to Find the Best Investment Property Using a Heat Map
Mashvisor also offers property investors with the heat map function. Using Mashvisor’s heat map will enable property investors to easily compare real estate metrics (you can find the best investment properties with the highest cap rates or cash on cash return).
In addition, this real estate investing tool will help you in choosing the optimal rental strategy for your property. A real estate investor interested in short-term rentals can check Airbnb cash on cash return, Airbnb rental income, and Airbnb occupancy rate. On the other hand, if you want to invest in long-term rentals, you can check traditional cash on cash return and traditional rental income.
Consequently, Mashvisor’s heat map makes property search an easy process – not only you can find properties with high return on investment, but you also can easily spot which rental strategy is most profitable for the location of your choice!
To start looking for and analyzing investment properties in your city and neighborhood of choice, click here.
Final Thoughts on Investment Property Search Tools
A successful investment property search is the first step towards a successful career as a real estate investor. Make sure you use the above-mentioned real estate investing tools to find the best investment properties in the US housing market that generate a high return on investment. Sign up with Mashvisor to get full access to our rental property calculator, rental property finder, and heat map!
To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.