Real estate investing is not only a potential way of making a lot of money but also a very exciting enterprise. It’s different from investing in stocks because you get personally involved in your investments, i.e., your income properties. Well, to be honest, investing in real estate can be very, very boring, that is, if you don’t have the right technology and tools at your disposal. But high-tech is permeating just about any aspect of our lives, and real estate investing is not left behind. One of the coolest – and most useful – “tools” you will ever have access to in this business is a rental property calculator. We will go as far as saying: Don’t even think about purchasing and managing an investment property.
before obtaining a good rental property calculator first. The good news for any new potential real estate investors is that Mashvisor has an excellent rental property calculator which will be of great help to anyone in real estate investing.
Before we talk about all the amazing features of a rental property calculator, let’s first define what that is:
What Is a Rental Property Calculator?
A rental property calculator, similar to an investment property calculator, is a user-friendly tool which provides real estate investors with all the crucial numbers that they need in order to decide whether to go for a certain income property or not, after they input some basic information about the property, such as the price, the financing method, the cash investment, etc.
Related: Why An Investment Property Calculator Tells You More Than Just Numbers
Why Is a Rental Property Calculator So Useful?
The quick answer to this question is: Because it saves you a lot of time and efforts! Before we had access to a rental property calculator due to technological developments, investors had to spend days and nights collecting data on investment properties and doing all the necessary calculations to come up with the expected profit from any particular income property. Now, thanks to the rental property calculator, we can do all this instantly.
Where Can I Find a Rental Property Calculator?
Again, another question with a simple answer: RIGHT HERE. Mashvisor offers you a rental property calculator which will provide you with all the numbers required to make your investment decision.
Why Is Mashvisor’s Rental Property Calculator So Cool?
Because it not only gives you a ton of information but is also highly interactive. You can manipulate the inputs in any way you want to see how this will affect the outputs. But let’s see what our rental property calculator does for you.
What Does Mashvisor’s Rental Property Calculator Calculate?
Generally speaking, there are two basic types of data which Mashvisor’s rental property calculator will supply: neighborhood-based and property-based.
At the Neighborhood Level
Sometimes a real estate investor knows that he/she wants to invest in a particular city but has no clue which neighborhood is the best. This is especially true for out-of-state real estate investing, in which case the investor is less likely to be familiar with the peculiarities of each neighborhood. This case would be one excellent use of our rental property calculator. Mashvisor will provide you with all crucial real estate investing numbers for any major neighborhood in hundreds of cities across the US: median property price, average square foot price, average rental income, average cash on cash (CoC) return, and average capitalization (cap) rate. Any real estate investor knows that these are the most important numbers you need to decide whether to consider a certain neighborhood or not. But that’s not all.
Related: 5 Ways To Create A Positive Cash Flow Income Property
In addition, Mashvisor’s rental property calculator will give you four more features developed especially for our product:
- Mashmeter: The Mashmeter simply tells you how good or bad a neighborhood is for real estate investing, expressed as a percentage. This allows you to easily compare between neighborhoods. The score is based on actual quantitative and qualitative data and Mashvisor’s analysis, which makes it highly reliable.
- Optimal strategy: To make your life even easier and your chances for a high profit even better, Mashvisor tells you what the best strategy for investing in any neighborhood is: traditional or Airbnb.
- Optimal property type: To save you lots of time for research and calculations, the Mashvisor rental property calculator will also give you concrete advice on the most profitable type of property (house, townhouse, single-family home, condo, etc.) in your neighborhood.
- Optimal number of bedrooms: Yes another kind of information you will be able to get is how many bedrooms your future income property should have for the best profitability.
At the Property Level
Once you have settled on a city and a neighborhood, it’s time to choose your specific investment property. You will already have a very good idea about what kind of property (property type, number of bedrooms, etc.) you should be looking for after consulting Mashvisor’s neighborhood rental property calculator. For concrete properties, Mashvisor will once again provide you with the basic numbers: rental income, monthly expenses, cash flow, CoC return, cap rate, and occupancy rate. Mashvisor’s rental property calculator will give you evidence-based estimates of all the costs associated with buying, managing, and renting out an income property, both one-time initial costs and recurring expenses. But you are still able to change these numbers in any way which you think might be more reasonable for your particular case. You can also explore the best financing strategy (cash or mortgage) for the property based on your financial situation. Any time you change your down payment from let’s say $20,000 to $50,000 or vice versa, the rental property calculator will recalculate all numbers dependent on your cash investment and monthly expenses, most importantly the cash flow, CoC return, and cap rate.
Related: Top 5 Sources for Your Rental Property Search
Traditional versus Airbnb
Mashvisor’s rental property calculator disintegrates all numbers into two categories based on the rental strategy: in the case of traditional renting and in the case of Airbnb renting. As you explore neighborhoods and properties on Mashvisor, you will see that the rental strategy is a major determinant of income as well as expenses and profitability. Most neighborhoods and properties have significantly different rental income, CoC return, cap rate, and occupancy rate for traditional and Airbnb. In many cases, the strategy is what will make all the difference between making losses and making a profit on an investment property.
Looking for a free tool to estimate the potential Airbnb rental income of your property? Use our Airbnb calculator.
The moral of the story is – don’t be outmoded by using spreadsheets for your investment property analysis. Get yourself up-to-date by acquiring a good, reliable rental property calculator before you even start looking at specific properties. For your next income property, visit Mashvisor for analytics and comps on thousands of properties across the US.