The real estate investment calculator has been the tool that all successful real estate investors use. For this, we are going to skip all kinds of introduction and dig straight to the point!
First: What is a real estate investment calculator?
A real estate investment calculator is a real estate investing tool that all investors use. It has been one of the most important tools to determine whether a certain investment property is worthwhile. Basically, this tool calculates the most basic real estate metrics in order to help perform, accurately, real estate market analysis as well as investment property analysis.
Second: What is a real estate investment calculator used for?
Calculate Capitalization Rate:
The capitalization rate is one of the most important real estate metrics. Simply, it calculates the estimated return on a certain investment property. The formula for calculating capitalization rate is simple as all you have to do is divide the net operating income by the value of your property. This indicates the time you will need to retrieve the money you have invested in the property in the first place.
Calculate Rental Income:
The real estate investment calculator is also used to estimate the rental income an investment property produces. Taking into consideration all the surrounding circumstances of an investment property, it gives the most accurate figures. With this tool, you will be able to determine whether your investment property is doing well or not. Therefore, you can take required measure to improve your property.
Not only that, but it also helps you calculate the property’s rental expenses in the most accurate and efficient way. As a result, you will be able to keep track of every penny coming in and out of your investment property.
Calculate Positive or Negative Cash Flow:
What can you possibly wish for other than having a positive cash flow investment property? Well, in this case, you should most definitely use a real estate investment calculator. It is, in fact, a must in your case. You must be able to determine whether your investment property is generating positive cash flow or not. Otherwise, you will end up putting in your own money! The last thing any real estate investor needs is a negative cash flow property that drains his/her own finances.
Calculate Cash on Cash Return:
The cash on cash return is another basic real estate metric. It is basically used to calculate the return on investment in regards to the total amount invested in cash. So, if you have financed your investment property with a mortgage, and you have put a 20% in down payment, then you calculate the down payment as this metric relies on the actual cash paid towards your investment in relevance to its net operating income. In fact, this is what makes it different from the capitalization rate. The latter calculates the total market value of your investment property. It does not take into consideration the financing method you used for your investment property. Therefore, the cash on cash return is higher when you take a loan instead of paying in cash.
Third: What are the advantages of using a real estate investment calculator?
Gives accurate numbers: It is important for a real estate investor to understand how his/her property is performing. Therefore, what he/she needs is a tool that will provide him/her with all the accurate numbers on his/her investment property. All you have to do is insert the required information, and the real estate investment calculator will do the rest for you. With this tool, you will be able to know exactly where your real estate investing business is standing.
Saves time: Many real estate investors use old-school methods for calculating the main metrics of real estate investing. Spreadsheets are one of those old-school methods. But wait! Why would you want to waste so much time when there is a useful tool to do so?! Besides, can you imagine making an error on a spreadsheet and do your calculations based on that one mistake?! That is a disaster, of course. So, save up your time and efforts and make sure to use a real estate investment calculator instead.
Finally: Where do you find the best real estate investment calculator?
Here we come to the most interesting part of this blog. We are going to save you the time and efforts of trying to look for the best real estate investment calculator. Instead, we are going to introduce you to Mashmeter. This is, in fact, a real estate investment calculator that is exclusive to Mashvisor. This tool will not only help you calculate the basic metrics but also:
It will help you perform location screening: As you already know, location is a vital factor in your real estate business success. Therefore, our real estate investment calculator will give you all the data in a certain location. All you have to do is insert the information, and you will have it right there. You will be able to determine whether the area is worthwhile or not. It will also help you perform accurate real estate market analysis for a certain property in a certain market.
It will help you choose the right real estate investing strategy: Many investors face the challenge of choosing the right strategy for their real estate investing business. Indeed, this is a very challenging process, especially for beginner real estate investors. The good news is that our real estate investment calculator will tell you what real estate investing strategies are best for you. Our real estate investment calculator will tell you what investment strategies are best for a certain area. This information is usually based on historical and statistical data as well as real estate comps.
The real estate investment calculator is, indeed, a must for every real estate investor. If your goal as an investor is to join the club of successful real estate investors and start making money, then go ahead and learn what it takes to use it. It is simple and accurate and what could be a better combination than that!