Investing in real estate makes for a lucrative business if you take the time to learn about every step of the process. Surely, experienced property investors have accumulated real estate skills in this way that have made them into the most successful real estate investors.
While you might be a beginner real estate investor, buying your first investment property has become easier with the emergence of real estate investing tools. These tools have helped investors at all levels in the business to hone their real estate skills. Below, we will introduce you to these real estate investment tools that will help you hone 3 of the most crucial real estate skills.
#1 Understanding the Location
As a first-time real estate investor, the first skill you want to acquire is to be able to spot profitable locations. The location of your investment property will impact its performance. It will, moreover, dictate the rental strategy and the type of tenants you will attract. Investing in a rental property near the seashore, for example, means that you should be targeting well-off tenants looking for short-term vacation home rentals.
When you are looking for an investment property, you want to find a good location that will have the right property to suit your goals, and of course a suitable price. Mashvisor was created to assist you in finding the best places to invest in real estate. Mashvisor’s heatmap analysis tool is the tool you need to hone your real estate skill of finding the perfect location.
Mashvisor’s Heatmap Analysis Tool
A heatmap analysis is an online tool in the form of a map that real estate investors use to find neighborhoods with property listings. The map essentially marks neighborhoods with possible real estate investments that are lucrative and displays them in a visual presentation to help buyers find lucrative properties faster. With the tool, a real estate investor can refine and set their search criteria, and based on that, the tool will find neighborhoods with investment properties for sale that cater to their needs.
The following are categories that you can use to refine your search:
- Rental Income
- Listing Price
- Cash on Cash Return (CoC)
- Airbnb Occupancy Rate
With Mashvisor’s heatmap analysis tool, you will be able to retrieve accurate real estate data on a certain neighborhood as opposed to manually deriving and calculating such data. The tool will not only save you effort but plenty of time that you could otherwise dedicate to other aspects of the rental property search.
#2 Finding an Investment Property with a High ROI
The next skill you’ll need is how to find an investment property. Finding investment properties that have a high potential for profit is a skill that requires due diligence. When you have landed on a neighborhood, your concerns would be finding the right property to bring about the highest return on investment. With Mashvisor’s rental property finder, we can lift off much of the burden of finding the most suitable property for your investment goals. Here’s a glimpse of Mashvisor’s rental property finder.
Mashvisor’s Rental Property Finder
A rental property finder is a digital tool that helps users find investment properties based on their preferences and search criteria. Particularly, Mashvisor’s property finder tool uses real estate property and housing market data along with analytics and metrics to provide you with a list of investment properties with the highest potential for returns. You will insert your budget, desired rental strategy, and property type to get a list of investment properties for sale within a location. The list will include income properties that have the highest potential for profits based on their cash on cash return.
Mashvisor’s Property Finder
Therefore, to hone your real estate skills, we recommend that you explore Mashvisor’s rental property finder. Getting started is free!
Related: Mashvisor Success Story: Here’s How Mashvisor Worked Its Magic on This Real Estate Investor
#3 Understanding and Determining Cap Rate
When you are investing in a rental property as a new real estate investor, you should understand how financial metrics such as the cap rate, cash on cash return, and cash flow work and how they could affect the profitability of your investment property. The Capitalization Rate, particularly, is one of the important metrics that you should use to assess the solvency and profitability of your investment property. It is a metric used to calculate the return on investment of a rental property based on its current market value. Understanding and correctly integrating the cap rate calculation in your assessment will add on to your real estate skills. Not only that, but you will also better assess the return of an investment. We, thus, encourage you to get more proficient with this metric and use it to better assess a property’s potential.
Here’s the formula for cap rate that you will need to use in your real estate investment analysis:
Cap Rate= Net Operating Income/Market Value of the Investment Property
The Net Operating Income (NOI) is all revenue from the property minus all necessary operating expenses. The Market Value of the investment property would be the purchase price of a recently sold property or the asking price if the property is still on the market.
Doing this for all the investment properties you are interested in can be difficult. So, to hone your skills in calculating the cap rate, Mashvisor has come to assist you.
Related: The Beginner’s Guide to Rental Property Analysis
Mashvisor’s Cap Rate Calculator
Buying an investment property has become easier with Mashvisor’s cap rate calculator (otherwise known as a rental property calculator). The predictive analytics this tool uses will help you make money from real estate investments. This tool will enhance your understanding of cap rate as it provides you with readily calculated rates for every investment property on the platform. With this, it’s easy to hone your real estate skills to better derive profits.
Investing in real estate is not complex. To excel and start accumulating profit, we encourage that you build your career by honing the aforementioned real estate skills. If you work to gain these real estate skills and supplement your learning with the tools that Mashvisor provides, you will become a proficient real estate investor and you will be making a profit even in the first months of your investment.
To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.