Why You Need a Real Estate Investment Calculator to Succeed in the Business

The real estate investment calculator is a tool that you do not want to miss. Find out why.

As the technology advances, real estate investing tools are also advancing. Therefore, getting rid of your spreadsheets makes more sense. So, why do you need these tools in the first place?

Reason #1: The real estate investment calculator is a combination of tools

The real estate investment calculator is a mix of various tools. These tools are essential for calculating the return on investment of a property through the various different measures. This combination includes the following tools:

First, the cap rate calculator:

The cap rate is a real estate metric that no real estate investor should overlook. The significance of this measure comes down to the return on investment in relation to the overall property price. For this, you will need to calculate the annual cash flow an investment property generates. Then you divide whatever value you get by the total price of the property.

The cap rate is actually a great way to estimate the rate of return for investment properties regardless of the financing strategy involved. Thus, serving as a quick measure of profitability.

However, quickly does not mean simple. In order for you to calculate the annual cash flow, you would have to estimate the rental income and deduct all the monthly rental expenses from that.

By now, you get our point. It is too much and too delicate to be doing it manually. Therefore, it leaves you with one option: using a real estate investment calculator.

Second, the cash on cash return calculator:

The CoC return is another metric real estate investors should not take lightly. Simply, it is another way to calculate the return on investment on a cash investment basis. This means, that you only take into account the amount of cash you have invested from your own pocket leaving behind other financing resources.

The cash on cash return calculator is, in fact, one of the best tools you can use for rental property investments. However, along with the cap rate calculator, it feels like too much in terms of real estate expenses for buying these tools. Yet another reason to use a real estate investment calculator!

Reason #2: The best real estate investments are in the best locations

No wonder we keep hearing the saying “location, location, location” when it comes to real estate investing. Because the best real estate investments are in the best location, always. So, how do you find these locations? Simply by using the real estate investment calculator. Not only does it perform the previous investment property analysis, but also the real estate market analysis.

This means that this tool also looks at the surroundings of an investment property to determine whether the location is suitable for investing. What makes a location suitable, you ask? The rate of appreciation and the other similar properties around it, of course.

Reason #3: The real estate investment calculator tells you how much to charge for rent

One feature of the real estate investment calculator is its ability to aid in determining how much to charge for rent. How is that? Well, based on the comparative market analysis it performs.

As we have mentioned before, the real estate investment calculator performs both cap rate and cash on cash return calculations. In addition to that, it also analyzes a location for you for the best real estate investments.

These factors are all important determinants for how much a landlord should charge for rent. After all, after performing a neighborhood analysis, you want to set a competent price. However, you do not want it to be too high and therefore lose rental demand for your rental property. Also, you do not want it too low so that it has a negative impact on your monthly rental income and therefore your cash flow. The way you do it is by comparing the investment property of interest to others similar to it in the same location. This will help you get an idea of how much the property is worth and what the median rent value is.

Now you are wondering why is it that important. Well, it is so because rental properties are income properties. They are called this way because you should be making money in real estate through an income property. Thus, the last thing you want is one that drains your energy and money.

Reason #4: The real estate investment calculator tells you how much money you can make

By now, you should know for certain that making money in real estate is all about positive cash flow. So, how do you go about buying an investment property that generates that kind of cash flow? By using the real estate investment calculator, of course.

We are pretty sure that you have noticed that all of the reasons we gave for using the real estate investment calculator are connected to each other. You can’t take one reason and overlook the rest. You will need a combination of tools, you will also need to find the best locations for the best real estate investments. Moreover, you will have to determine how much to charge for rent and finally, how much money you’ll be able to make. Most importantly, that is exactly what the most successful real estate investors do to succeed. So, what are you waiting for?!

Reason #5: Save time with the real estate investment calculator

Well, come on! We all want to produce more in little time. And, needless to say, you need the real estate investment calculator to do that!

Hint: Using Mashvisor’s investment property calculator might be of great help 😀

Mashvisor:

Searching for the best real estate investing tools does not have to be that hard. By reading this blog, you are actually a few steps away from the best real estate investment calculator in the business. In fact, you are a step away from the most accurate heat map analysis for your business. Mashvisor is the place you want to go for this purpose. So, make sure to click here to subscribe to our services.

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