What is Mashvisor?
Mashvisor was established with the aim of providing real estate investment data analysis to real estate investors. The mission of the company is to automate and analyze nationwide real estate data to empower investors to find Traditional & Airbnb investment properties and optimize their rental performance.
What data sources does Mashvisor use?
Mashvisor analyzes a property's historical data from up to 3-years. Our listings come directly from MLS, but you might need to confirm the property's availability on MLS as their data is updated slightly ahead of ours. We get our traditional investment information from reliable sources such as Hotpads and Rent Jungle and our Airbnb data comes from Airbnb’s website. After collecting this information, we are then able to use our algorithms and make our calculations and projections.
What is ROI?
ROI (Return on Investment) is a value that expressed the return on an investment relative to its cost. It is typically used to measure the efficiency of an investment or to compare the efficiency of a number of different investments.
What is Cap Rate?
The Cap Rate is a value that measures the expected income and potential returns of a property. This value does not take financing into consideration (it assumes that you paid for the property with 100% cash).
Cap Rate = Net Operating Income (Gross Income – Operating Expenses)/Property Price
What are Rental Comps & where can I find them on Mashvisor?
Rental Comps are used to compare a number of rental properties to decide which property is a better investment.
Using Mashvisor, you can compare rental properties in an area or neighborhood using the Heat Map function to give you a quick visual cue and indication of the different values that each property in the area has in relation to the neighborhood's averages and based on your metric of choice.
Additionally, you can use the property analysis page to compare a number of properties and determine which is a better investment based on the values available through the analytics page.
What is Cash on Cash Return and how is it calculated?
Cash on Cash Return (CoC) is a value that measures a property's income and returns based on all other aspects of an investment, taking into consideration the financing of the property (the amount of mortgage and the down payment) as well as all the other expenses that apply to your investment.
CoC Return = Cash Flow (Income-Expenses)/Total Investment Cost
What is the difference between Cap Rate and Cash on Cash Return?
Cap Rate does not take into consideration the method of financing the property (whether you're using loan money or not), while Cash on Cash Return does.
If you're purchasing a property with 100% downpayment (no loan), then the values of Cap Rate and CoC will be the same.
How do I determine a suitable Cap Rate based on my budget?
Cap Rate is the main metric used by investors to determine the effectiveness of an investment. Generally, higher Cap Rates indicate higher profitability and higher risks, while lower Cap Rates are associated with lower profitability and lower risk.
A Cap Rate of 8% - 10% is generally considered good. However, an investor is free to choose whichever Cap Rate that they believe to be suitable for their investment as well as the risk-rate associated with it.
Does Airbnb generate higher returns than Traditional rentals?
This is highly dependant on the area that you're investing in. In general, many investors have reportedly made more money through Airbnb. For example, some owners have received a 30% higher rental yield through Airbnb compared with traditional renting. Some have even used Airbnb as a business, earning six-figures.
However, due to a number of legal issues, Airbnb's performance has been declining in a number of states and cities that have imposed some restrictive regulations on Airbnb.
We highly advise you to check your state's laws and regulations regarding Airbnb properties before you decide on investing in it.
What are the top performing locations for Airbnb?
Generally, Texas and Arizona are considered among the top performing locations and attractions for Airbnb investments.
In order to always be certain about your Airbnb choice, always check to make sure that the state/city you're investing in does not have laws and regulations that limit the viability of Airbnb investment properties.
What markets is it not legal to do Airbnb rental properties?
While there aren't any markets that completely prohibit Airbnb or where Airbnb is illegal, some states such as San Francisco, Santa Monica, and Florida have severe laws and regulations which greatly limit the viability of Airbnb as an investment.
We always advise our users to check with their state's laws and regulations related to Airbnb in order to make sure that it's a viable investment.
I have cash and I have been pre-approved. Should I make a cash payment to finance my investment? Should I invest the full amount?
This is your decision to make as an investor. Using mortgage to finance your purchase can give you higher leverage, while using cash will allow you to enjoy the full amount of your rental income as a profit as you won't be paying any loan payments or interest.
It all comes down to you as an investor, your financial situation, and your investment strategy.