As it is every year, buying rental properties will be the best investment you can make in 2020. That’s because real estate investing is very profitable. But, just how lucrative can a rental property be? In other words, how can you forecast a property’s return on investment (ROI)? The answer lies with a rent investment calculator.
What Is a Rent Investment Calculator?
So, what is a rent investment calculator exactly? Also known by other names such as a rental property calculator, a rent investment calculator is the ultimate tool for real estate investors. The calculator computes and estimates vital property metrics. Some of the calculator’s functions include:
- Calculating rental income
- Estimating rental property expenses
- Forecasting ROI for rental property
To put it in one sentence, a real estate calculator performs an investment property analysis. As a result, it determines the viability of a cash flow rental property. This job was reserved for spreadsheets in the past. However, they have since become obsolete because of the rental property calculator.
Where Can You Find the Best Rental Property Calculator in 2020?
A rent return on investment calculator is a must-have tool for real estate investors. So, where can you find the best calculator for 2020? The answer is, right here! Mashvisor’s rent investment calculator is the best of the best. With its accuracy, efficiency, and unique features, Mashvisor’s calculator will put you ahead of the competition. To get a taste of Mashvisor’s calculator, CLICK HERE! You’ll be able to start a FREE 7-day trial with the calculator and all of Mashvisor’s real estate investment tools!
How Does Mashvisor’s Rent Investment Calculator Work?
Mashvisor’s real estate investment calculator uses the most accurate sources of real estate analytical data and trends. Along with this information, the calculator depends on user input. As a result, it produces the most accurate output data available.
Mashvisor’s Input Data
In order to forecast ROI for rental property, the calculator requires input data. The most important inputs are financing costs and rental property expenses.
ROI predictions heavily depend on financing. Using a mortgage or cash can make a huge difference in an investment property’s ROI. Mashvisor’s rent investment calculator understands this. As a result, users can select the financing method they will use to buy a property. Investors using a loan must also insert the amounts of the mortgage, down payment, and interest rate. The loan type must also be specified.
Rental Property Expenses
Return on investment predictions are also influenced by property expenses. Mashvisor’s real estate calculator actually provides users with estimates of two important types of expenses based on local real estate comps. One-time startup costs are the first type. These rental property expenses are only paid once. They include inspection costs, closing costs, and furnishing expenses. Then, we have recurring costs. These are paid continuously to maintain rental properties. Examples include HOA dues, income tax, utilities, insurance, and much more.
Based on your own research as well as any expenses unique to your future rental property business, the calculator allows you to adjust and add expenses as you please.
Mashvisor’s Output Data
Once Mashvisor’s calculator obtains input data, it can forecast ROI for rental property. The rental property ROI calculator does so by computing three metrics.
When analyzing investment properties, calculating cash flow is a must. It is defined as the difference between monthly income and expenses. A positive cash flow rental property has a net profit. A negative cash flow, on the other hand, is a net loss. Mashvisor’s calculator crunches cash flow for all rental properties for sale on the platform.
Cash on Cash Return
The rent investment calculator also computes cash on cash return. This ROI metric, also known as CoC return, is an important one. CoC return calculates ROI based on the amount of cash invested in a property. It also uses cash flow and the financing costs for its return on investment forecast. As a result, CoC return is a vital metric for investors who finance properties with a loan.
The last, but not least, of the calculator’s ROI calculations is cap rate. Short for capitalization rate, cap rates forecast ROI for rental property regardless of the financing method. Therefore, cap rate is best suited for the comparison of similar investment properties for sale.
What Are the Other Unique Features of Mashvisor’s Calculator?
Mashvisor’s rent investment calculator provides valuable information with its inputs and outputs. However, it also computes other unique forms of real estate data. Here are two examples:
Optimal Rental Strategy
The success of an investment rental property largely depends on its rental strategy. That begs an important question. How can you definitively know which rental strategy is best for your property? As you would expect, Mashvisor’s calculator has the answer! The calculator provides both traditional and Airbnb data for each selected property. Unique data for each strategy, such as the Airbnb occupancy rate, is also provided. Above all, the calculator will actively tell you which strategy is best for your rental property.
Real Estate Comps
An important part of analyzing rental property investments is conducting a comparative market analysis. This is done using real estate comps. Real estate comps are properties similar to a selected property. By comparing them, real estate investors can determine the value of a property. With Mashvisor’s rent investment calculator, the work of finding comps is done for you! Mashvisor’s calculator automatically lists the best real estate comps for every selected property. It does so for both traditional and Airbnb rental properties.
The Botton Line
A rent investment calculator is the best tool for real estate investing. With Mashvisor’s calculator, you can forecast ROI for rental property, determine optimal rental strategy, estimate expenses, and much more!