The process of finding the right property in the traditional manner can be both costly and tiring. That’s because investors usually have to look at a number of properties or hire multiple real estate agents that can provide them with what they need. The idea is to compare rental properties to gain a better understanding of property prices, potential profits, mortgage rates, and more. After gathering such information, an investor should have an idea of what kind of property to buy.
How do you obtain rental comps? What are considered rental comps? Don’t know where to start or pick from the hundreds of properties available? These are just some of the few questions that might be crossing your mind. Mashvisor’s predictive analytics has found you a way to make your real estate search scale wider yet way simpler than ever before. The predictive analytics of Mashvisor can help you analyze rental comps on your own either for an entire neighborhood or property.
Neighborhood Rental Comps
The very first step to begin your rental comps is to choose a location. Mashvisor’s predictive analytics search engine is easy. Searching a city will give you a map view of the city’s neighborhoods. The heatmap allows you to highlight the areas based on what is considered to be the most important criteria to you. The heatmap includes listing price, Airbnb cash on cash return, traditional cash on cash return, Airbnb rental income, traditional rental income and Airbnb occupancy rate.
For example, if we were searching for properties in Miami and wanted to explore the Airbnb rental income data, the heatmap gives an analysis of each neighborhood’s Airbnb rental income potential, highlighted by red being the lowest and green being the highest.
In Miami, the map shows us clearly that Airbnb rental income in Brickell neighborhood is significantly higher than in Allapattah. This right here is a primary example of a how a rental comp analysis gives the investor insight about which neighborhood to invest in. Analyzing Airbnb rental income alone is not enough; one must analyze all relevant data. What’s the point of analyzing the most profitable Airbnb rental income neighborhood when you can’t afford buying a property there?
The second image clearly shows that property prices in Brickell neighborhood are significantly higher than those in Allapattah. Income and price are surely correlated; the more you spend or the more lucrative your neighborhood is then the more profit you will make.
Property Rental Comps
After analyzing all possible neighborhoods, Mashvisor offers its users the freedom to analyze properties within a particular neighborhood. We can continue with the previous example and analyze Brickell neighborhood even further by looking at rental comps for properties there. After selecting the neighborhood, we then have a a closer map view of that neighborhood being divided into areas based on rental comps also shown on the spectrum of red to green.
Going into more details with Mashvisor doesn’t stop there. If you are interested in a neighborhood but have specific requirements for a property, Mashvisor allows you to use a list of filters that narrow the search criteria to your needs. The most prominent ones are financial which are cash on cash return, budget, and cap rate. However, if you are looking for property features then additional filters include number of bedrooms, number of bathrooms, year built, and square feet.
To explain how rental comps work between two properties using Mashvisor, we use two properties that are located in Brickell, Miami as an example, 999 Southwest 1 Avenue #2109 and 485 Brickell Avenue #3901. These properties both have one bedroom and bathroom. In the rental comps data, it is clearly visible that 485 Brickell Avenue is more expensive than 999 Southwest 1 Avenue because of its location in the neighborhood being closer to downtown Miami and proximity to the coastline.
The second step would be selecting both properties to have a closer look at their other rental comps predictive data in more detail. What we realize is, while it is cheaper, 999 Southwest 1 Avenue is an inferior investment to 485 Brickell Avenue. The latter having a $50,000 higher listing price but is far superior in generating income using either rental strategy, traditional and Airbnb.
Potential new investors don’t need to look further than Mashvisor to obtain a tool which will save them time and effort in finding a property that ticks all the boxes. Having rental comps data in many different cities under your control with the click of a button is without a doubt, a relief. Utilizing that power and understanding it will also prepare you for the challenges you face ahead in your real estate investment.