The Ultimate Rental Property Analysis Calculator

The ability to assess deals is a very important factor for the success of both experienced and beginner real estate investors. Whether you are assessing an existing property or thinking of purchasing a new one, a comprehensive rental property analysis is crucial.

6 Factors to Consider in Rental Property Analysis

Here are some of the factors to consider when doing a return on investment analysis (ROI) for a rental property:

Property type – An investment property could be a multi family home, single family home, an apartment, duplex, condo, townhouse, etc. Each property type comes with its own advantages and disadvantages and the ROI analysis will be somewhat unique to each type.
Rental strategy – You can either focus on long- or short-term rental properties. Short-term rentals could be Airbnb rentals or vacation homes, while long-term rental properties involve long-term tenants. Both strategies can bring a good return depending on your target market.
Rental income and cash flow – Rental income analysis and calculating cash flow will help real estate investors establish whether or not a real estate investment will be profitable. This will require a cash flow calculator.
Vacancy rates – This is the portion of the year when a real estate investment property does not have tenants. An ideal vacancy rate would be 0%, meaning the rental property is occupied all throughout the year. While a zero percent vacancy rate is possible, the possibility of vacancies should be factored in during rental property analysis. It’s also important to note that a 100% Airbnb occupancy rate is not very realistic and needs to be taken into consideration during an analysis of this type of property.
Operating expenditures – Running a rental property involves ongoing costs such as insurance, utilities, maintenance, and other operational costs. A proper cost analysis will help determine the operating expenditure of the property.
Capital expenditures – Unlike operating costs, capital expenditures refer to costs that arise periodically. For example, physical assets such as equipment or industrial buildings could be considered capital expenditures.

Learn More: Rental Property Analysis: What You Need & Where to Find It

Imagine adding all of this information into spreadsheets in order to complete a full analysis. It’s as difficult as it sounds! The good news is that a rental investment property calculator is one of the real estate investment tools that can make your decision-making much easier.

What Is a Rental Property Calculator?

Also known as the rental income calculator, the rental property analysis calculator helps potential property owners assess if a rental property is a good investment to buy. This calculator works using data such as your mortgage rate, your property’s current value, expected monthly rental income, and loan terms. It also includes your down payment, closing costs, renovation costs, and more. Using these numbers, the rental income calculator will show your return on investment in the form of cap rate and cash on cash return.

The rental property analysis calculator developed by Mashvisor is the ultimate investment calculator. It is useful for analyzing a wide range of properties including apartments, condos, single family homes, and multi family homes. Here’s what Mashvisor’s calculator looks like:

Mashvisor's rental property analysis calculator and how it works

Mashvisor’s Rental Property Calculator

Who Is It For?

Mashvisor’s rental property calculator is ideal for investors who need to decide whether or not to buy a property. It’s great for both beginner and experienced real estate investors.

However, the rental property analysis calculator is not suitable for fix-and-flip investors who buy a property with the aim of improving it and selling it for a profit. Such short-term investors are usually not concerned about monthly cash flow or rental income. Instead, their focus is on the after repair value (ARV) and the returns they can make by selling the property fast. So while you can still find investment properties on Mashvisor for this type of real estate investment strategy (like foreclosures, short sales, bank owned properties, etc.), the calculator is meant for a rental property investment strategy.

What Can You Do With the Rental Property Analysis Calculator?

Real estate investors can use Mashvisor’s rental property calculator to perform the following aspects of real estate investment analysis:

Conduct a Complete Investment Property Analysis

Mashvisor’s investment calculator uses predictive analysis to offer investors data on traditional and Airbnb rental properties. This makes it easier for real estate investors to accurately analyze investment properties. In addition, the calculator allows users to select a financing method (mortgage or cash) and adjust figures such as loan amount, interest rate, down payment, and other one-time and ongoing costs.

With this, the rental property analysis calculator will allow you to:

Calculate Cash Flow

This metric shows the amount of profit a real estate investor can anticipate after subtracting all costs from rental income. Mashvisor’s rental property analysis calculator provides data on the rental income as well as expense estimates so you don’t have to worry about gathering this information yourself to calculate the cash flow.

Calculate Cash on Cash Return

This is a real estate metric that measures the return on investment based on the initial cash investment. Calculating cash on cash return is easy; simply divide the net operating income (NOI) by the cash invested initially. For instance, if a property is financed using a mortgage with a 15% down payment, the cash on cash return will be calculated based on the down payment and a few other initial fees.

With Mashvisor’s rental property analysis calculator, you can add in all financing expenses as well as other costs involved in financing an investment property such as closing costs and commission fees. Essentially, it works as a cash on cash return calculator and allows you to quickly determine if a rental property will give you a good CoC return.

Calculate Capitalization Rate

Unlike the cash on cash return, the cap rate calculation does not consider the financing method. Using a cap rate calculator, you can find the cap rate ratio by dividing the annual net operating income (NOI) of an investment property by its current value. Calculating cap rate is very important for comparing an investment property’s price with other comparable units in the area. With Mashvisor, you don’t have to spend any time calculating the cap rate. Instead, it comes readily calculated for every investment property on the platform. This means you can take a quick look at dozens of properties in one sit down and narrow down your investment options rather quickly based on this metric.

Perform a Neighborhood Analysis

This feature allows real estate investors to compare different neighborhoods concurrently using a heatmap. The data generated includes the rental income for traditional rentals vs Airbnb, listing property price, average cash on cash return, and rental property occupancy rate.

Choose the Optimal Rental Strategy for Each Property

In real estate investing, rental strategy plays a major role in determining the profitability of an investment property. Property investors could decide to rent out their properties as Airbnb rentals or traditional rentals. Each strategy has its own cap rate, cash on cash return, occupancy rate, expenses, and rental income. Because Mashvisor’s rental property analysis calculator provides data based on both strategies for every property, investors will be able to easily figure out which rental strategy is optimal.

Conclusion

Finding accurate numbers and data is, without a doubt, very important when evaluating investment property. Being able to calculate property performance will help you make better decisions. Whether you are a beginner or experienced investor, a rental property analysis calculator is crucial for choosing the most profitable real estate deals. And you should be using only the best rental property calculator. So start out your 14-day free trial with Mashvisor now.

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