Making money in real estate can be quite challenging, especially when the house investor aims to find the most profitable real estate investments. Every professional real estate investor in the field has once wondered how to make money in real estate. The answer to this inquiry is actually pretty simple. The key is in performing analysis prior to buying an investment property. Real estate analysis is typically divided into two main groups: real estate market analysis and investment property analysis.
Briefly, real estate market analysis deals with exploring the local housing market. This involves defining the condition of the market. Is it a buyer’s market or seller’s market? Moreover, by performing such a research, the real estate investor should be able to review the medium property price, rental income, rental expenses and occupancy rate for Airbnb rentals and traditional rentals in the location. Further, based on the information, the real estate investor should be able to identify the optimal rental strategy for investment properties in the market.
Besides knowing the median rental income, rental expenses, and occupancy rate for the general real estate market, it is also important to know these values for individual income properties in order to find the best real estate investments. Completing investment property analysis can help you in achieving this. This analysis consists of computing real estate metrics for separate investment properties. Some of the most important metrics are the cap rate, cash on cash return, return on investment as well as the previously mentioned ones.
Conducting each type of analyses requires a lot of work, computations, and time. However, the current technological innovations allow real estate investors to perform analysis much quicker, and more efficiently and accurately. You can achieve this through the use of various real estate investing tools. One of the game-changing real estate investing tools is the rental property investment calculator. This is also the topic of this blog- the rental property investment calculator.
#1 What Is the Rental Property Investment Calculator?
As previously mentioned, the rental property investment calculator is one of the most popular and useful real estate investing tools. The rental property investment calculator is also known by the names “rental property calculator” and “investment property calculator.” This is a tool which can help you conduct both real estate market analysis as well as investment property analysis in a matter of seconds.
The investment property calculator is easily accessible online and it is pretty affordable as well. One of the biggest advantages the tool has is the enormous amount of data which it has access to. This way, you as a house investor, can truly explore the available markets and choose from the best real estate investments. Moreover, the tool can help in preventing any mistakes while computing the real estate metrics manually. In addition, you can access the information anywhere, anytime. Needless to mention, this is extremely helpful for finding and financing the most profitable real estate investments. To give you a better idea of the kind of information you can receive from using the rental property investment calculator, here is a brief explanation of the most important metrics presented by the tool.
Curious to learn more about the rental property calculator? Make sure to read “Rental Property Calculator: The Must-Have Real Estate Investment Tool.”
Cap rate presents the rate of return on a property on the basis of the amount the investment will potentially generate. To compute the value, you need to divide the Net Operating Income by the current market value of the property. Interested to know what is a good cap rate for rentals? Make sure to read “FAQs: What Is a Good Cap Rate for Rental Property?”
Cash on Cash Return
Cash on cash return is typically used as an indication of whether a property classifies as one of the best real estate investments. The value is the Net Operating Income over the total cash invested in the property.
Return on Investment
Return on investment presents the return as a percentage of the investment. This metric expresses the total growth of the investment property and is useful when comparing real estate investments.
This represents the potential money your investment property will generate over a specific period of time, typically a month. It is important to note that Airbnb rentals are priced and rented out differently than traditional rentals. Make sure you are comparing similar types of investment properties.
Rental expenses are the costs associated with your income properties. These may include any repairs that the property needs as well as taxes, management fees, etc.
This category simply represents how occupied the income properties are in the region and how this rate is divided throughout the year. This way, you can decide if the market holds some of the most profitable real estate investments or not. Interested in learning tips on how to boost your Airbnb Occupancy rate? Make sure to read “5 Ways to Boost Your Airbnb Occupancy Rate.”
Now, without further ado, let’s explore which is the best rental property investment calculator and why that is so.
#2 Why Is Mashvisor’s Rental Property Investment Calculator the Best Rental Property Investment Calculator?
If you are still wondering how to make money in real estate, here is the answer: use Mashvisor’s investment property calculator. Mashvisor offers the best rental property investment calculator and there are a few reasons that back up this statement.
First of all, the rental property calculator offers detailed neighborhood analysis as well as in-depth property information. Additionally, Mashvisor’s rental property calculator suggests the optimal rental strategy for your investments. As you probably already know, in order to be making money in real estate, you should have identified the optimal rental strategy for your investments. This is simply because Airbnb rentals and traditional rentals perform at their best in different types of real estate markets. Moreover, when buying an investment property, it is absolutely necessary to apply your investment strategy to your financing method and keep the two synchronized. Luckily, Mashvisor’s tool offers you the opportunity to enter a financial method of subsidizing your property as a variable. This will help adapt the results to your own budget scheme. And this is how you start making money in real estate.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.