What are property comps and why are they important for my investment?
Mashvisor utilizes property comps to give the user an accurate idea of whether an investment property or a strategy is good or not for their investment based on their investment goals.
Not only does Mashvisor compare similar properties in an area based on the metric of your choice in order for you to determine which property is more suitable for your investment plan, but we also provide you with strategy comps for rental properties which compare traditional and Airbnb rental strategies for your selected property or for the area that you're investing in.
This is very important for any real estate investor as it allows you to eliminate any properties that fall below your desired standards, saving you tons of time which you would otherwise be spending on analyzing each individual property and comparing it with the other properties.
What functions does the Investment Property Calculator serve?
Our investment property calculator will analyze a number of different aspects and values for your investment property, giving you accurate data and estimations to help you determine the profitability of the property.
These values are:
Cap Rate: This value is used by most investors as the main value to determine the quality of an investment property. The Cap Rate is, in fact, an indicator of the property's profitability in comparison to its market value, but it does not take into account any mortgage payments made on the property, but rather assumes that your purchase of the property was 100% cash.
Cash on Cash Return: Unlike Cap Rate, the Cash on Cash Return value indicates the property's profitability while taking into account all expenses related to your investment, such as taxes, reparation costs, and loan payments, giving you a closer estimate of the Return on Investment that the property will be generating for you.
Cash Flow: The Cash Flow or an investment property (applies to rental properties) is the amount of cash the property is either generating or losing on a monthly or annual basis. This also takes into account all the expenses that apply to your investment, deducting them from your property's rental income to give you the amount of profit that the property is generating. Cash Flow can either be negative or positive, indicating whether you're making money or losing it.
Airbnb Occupancy Rate: This value indicates the percentage of time that your rental property is expected to be occupied with tenant throughout a year. This value is extracted from Airbnb's database, and it shows an accurate rate based on actual historical data.
Monthly Expenses: This value is extracted from a number of different sources, and will give you a close estimate of the expenses that are to be expected on your investment property such as the average tax payments, average reparation costs...etc.