Not all rental properties are created equal. As a real estate investor, you must learn to find rental property online that suits your needs.
Table of Contents
- Step One: Decide on Your Strategy
- Step Two: Choose a Location
- Step Three: Isolate Desirable Neighborhoods
- Step Four: Do Property Analysis
- Step Five: Place an Offer to Start Negotiating
Finding rental properties is both easy and challenging, depending on how you look at it. It’s easy because you can simply spot investment properties for sale and then rent out whichever you buy. You just have to drive around the neighborhood or go online. On the other hand, it can be quite challenging if you have no idea what your goals are.
Making a profit is a goal but is not clear enough. Anyone who wants to get into real estate investing wants to make money. That’s the reason why they get into it in the first place. The issue is not so much about looking for an investment property but more about finding the right one.
One of the most efficient ways to find rental property online is to utilize modern technology. However, while there are plenty of real estate platforms out there, not all of them are created equal. One of the most trusted real estate websites out there now is Mashvisor because of its database and tools, especially its Rental Property Finder.
As an investor, you would want to get the income property that matches your goal and fits your situation. Mashvisor’s Rental Property Finder will help get you the best possible property that will help you achieve your investment goals.
By the end of this article, you will get the answers you’re looking for and have a better idea of how to find rental property online.
Step 1: Decide on Your Strategy
One of the most important things you need to do as a real estate investor is to have a sound strategy in place. The strategy will greatly depend on your goal, but regardless, you should determine how you want to go about it.
Rental property investing is basically divided into two main categories: traditional and vacation rental. Each strategy has its own set of pros and cons. Your goals and situation will help you identify which strategy best suits you.
Traditional Rental Strategy
A traditional rental strategy is usually taken by those who want a more stable and consistent monthly rental income. Traditional or long-term rentals usually don’t go below six-month periods. In most cases, landlords offer their rental properties to tenants for at least a year. Once the contract expires, they either renew it or transition to another tenant.
As a strategy, a traditional rental property gives its landlord some sort of stability as rent payments are expected monthly from a tenant. It may be smaller compared to an Airbnb rental, but landlords have something exact to look forward to every month.
On the flip side, they might end up with a bad tenant, which could give them headaches for the entire duration of the lease. This is why knowing how to screen tenants is an important skill if you want to be a landlord.
According to Mashvisor’s latest data, the average rental income for a traditional rental property is $1,840. The top five states with the highest monthly rental income are:
California
- Median Property Price: $1,109,436
- Average Price per Square Foot: $807
- Days on Market: 53
- Monthly Traditional Rental Income: $3,334
- Traditional Cash on Cash Return: 1.78%
- Traditional Cap Rate: 1.80%
- Price to Rent Ratio: 28
New York
- Median Property Price: $959,535
- Average Price per Square Foot: $711
- Days on Market: 120
- Monthly Traditional Rental Income: $2,698
- Traditional Cash on Cash Return: 1.51%
- Traditional Cap Rate: 1.55%
- Price to Rent Ratio: 30
Connecticut
- Median Property Price: $666,497
- Average Price per Square Foot: $311
- Days on Market: 79
- Monthly Traditional Rental Income: $2,607
- Traditional Cash on Cash Return: 2.29%
- Traditional Cap Rate: 2.34%
- Price to Rent Ratio: 21
Hawaii
- Median Property Price: $1,103,978
- Average Price per Square Foot: $963
- Days on Market: 93
- Monthly Traditional Rental Income: $2,567
- Traditional Cash on Cash Return: 2.18%
- Traditional Cap Rate: 2.22%
- Price to Rent Ratio: 36
District of Columbia
- Median Property Price: $738,609
- Average Price per Square Foot: $609
- Days on Market: 135
- Monthly Traditional Rental Income: $2,533
- Traditional Cash on Cash Return: 2.15%
- Traditional Cap Rate: 2.19%
- Price to Rent Ratio: 24
You will notice that while CA and NY are the top two in terms of monthly traditional rental income, their cash on cash return and cap rates are below 2%. As an investor, you need to also take into consideration the cash on cash return and cap rate. These two are crucial factors in determining a property’s profitability.
To find rental property online that will give you a good return on investment, you have to look for locations with above-2% rates for both. We will talk about both metrics later on.
Related: How to Find Good Investment Properties
Short-Term Rental Strategy
In contrast, short-term rentals, or vacation rental properties, generally offer investors higher potential monthly rental income. Of course, several factors can largely affect your income as a vacation rental property owner. These are:
- Location. This is one of the most important considerations any investor should consider.
- Seasonality. A vacation rental property will have peak and off-peak seasons. It depends on the location, season, and local tourism projects.
- Economy. A growing or thriving economy also attracts more businesses which in turn attracts more tourists.
- Cost of Living. Can you afford to start an Airbnb business in a place with higher utilities, taxes, mortgages, and housing prices?
- Tourism Industry. Tourism isn’t just about having the best tourist attractions. In a lot of ways, it largely depends on how the local economy is doing. Is it performing well enough to attract tourists for both business and pleasure?
Vacation rentals do have the potential to earn more compared to traditional rental properties. It can also somehow speed up the process of recovering your investment for as long as the vacancy rates are low.
If there are any downsides to investing in short-term rentals, it is its unpredictable nature. For one, you cannot predict exactly how much you will make in any given month. Traditional rental property owners at least know how much they will get monthly.
Two, you are at greater risk for property damage since you will constantly be getting strangers as tenants. Landlords don’t have to deal with the constant fear of having irresponsible and destructive guests.
And three, you will also be limited to the governing short-term rental regulations of your location. Not all states are vacation rental-friendly.
Mashvisor’s July updates indicate that these are the top five states that have the highest Airbnb rental income:
Hawaii
- Median Property Price: $1,103,978
- Average Price per Square Foot: $963
- Days on Market: 93
- Monthly Airbnb Rental Income: $5,258
- Airbnb Cash on Cash Return: 4.21%
- Airbnb Cap Rate: 4.29%
- Airbnb Daily Rate: $214
- Airbnb Occupancy Rate: 65%
California
- Median Property Price: $1,109,436
- Average Price per Square Foot: $807
- Days on Market: 53
- Monthly Airbnb Rental Income: $4,893
- Airbnb Cash on Cash Return: 2.84%
- Airbnb Cap Rate: 2.88%
- Airbnb Daily Rate: $287
- Airbnb Occupancy Rate: 55%
Wyoming
- Median Property Price: $1,385,217
- Average Price per Square Foot: $1,080
- Days on Market: 98
- Monthly Airbnb Rental Income: $4,426
- Airbnb Cash on Cash Return: 2.85%
- Airbnb Cap Rate: 2.91%
- Airbnb Daily Rate: $239
- Airbnb Occupancy Rate: 56%
Arizona
- Median Property Price: $565,227
- Average Price per Square Foot: $290
- Days on Market: 15
- Monthly Airbnb Rental Income: $4,176
- Airbnb Cash on Cash Return: 5.09%
- Airbnb Cap Rate: 5.17%
- Airbnb Daily Rate: $218
- Airbnb Occupancy Rate: 63%
Washington
- Median Property Price: $971,471
- Average Price per Square Foot: $657
- Days on Market: 37
- Monthly Airbnb Rental Income: $4,114
- Airbnb Cash on Cash Return: 2.17%
- Airbnb Cap Rate: 2.20%
- Airbnb Daily Rate: $173
- Airbnb Occupancy Rate: 65%
The above-mentioned states may not be the highest in terms of cash on cash return, but they all still get pretty good above-2% returns. That and above-average occupancy rates make these states high-income locations for short-term rentals.
Related: How to Get an Airbnb Investment Property in 2022
Other Factors to Decide on
As an investor, you also need to factor in different variables when deciding which of the two strategies to choose.
- Overall Budget. How much can you realistically afford? Where are you in terms of your financial situation? You have to understand that even if you find a relatively cheap investment property, you still have other expenses to consider, like closing costs and rehabilitation expenses.
- Financing. How do you intend to pay for the property? Do you have the capacity to make an all-cash transaction? While this will give you huge savings on mortgage rates, not everyone has enough extra cash lying around. In most cases, investors resort to financing options to purchase a property they find online.
- Property Type. Each property type has its own advantages and disadvantages. A single-family unit in a suburban setting attracts different people compared to a condo in the city or a lakeside cabin.
- Target ROI. How much do you want to earn, and how fast do you want to recoup your investment? Most importantly, does the property have good cash on cash return for it to be a sustainable Airbnb rental?
- Location. Again, we go back to the location. When it comes to real estate investing, the area where the property is built is paramount.
There are, of course, other variables to consider, but these should help you determine whether a particular property is worth investing in or not.
Step 2: Choose a Location
Once you already have a strategy in mind, it’s time to look for the right location for your investment. The great thing about real estate investing today is that you are no longer limited to your locality. It is now easy to find profitable rental properties online anywhere in the country or even the world—if you have the money for it. Technology has enabled countless real estate investors to find the best out-of-state deals online.
Getting Started
To find the right location online, you need to have a general idea of where you want to invest in. Do you have a particular state, city, or neighborhood in mind?
Let’s say you want to buy a traditional rental property geared towards younger families. Locations with thriving economies and lots of job opportunities make for great investment options. On the other hand, if you want to delve into the Airbnb business, look for areas where tourist traffic is high for a greater part of the year. Ideally, these places should have pleasant weather all year round with lots of fun activities and events to attract more guests.
At this point, you don’t have to do in-depth research. Just get a general idea of where it makes more sense to invest according to your goals and needs.
Finding a Good Spot
Once you have a general idea of where you want to invest, you can start looking for a specific location.
For instance, you found out that Texas is very friendly to rental property owners, and you want to get something going there. You can start your online search for the right neighborhoods in the Lone Star State.
Mashvisor can help you find the best neighborhoods that match your needs. Its Investment Property Search can help you pinpoint the ideal neighborhoods that go well with your chosen investment strategy. It has a real estate heatmap that shows how neighborhoods are performing based on:
- Traditional Cash on Cash Return
- Airbnb Cash on Cash Return
- Traditional Rental Income
- Airbnb Rental Income
- Listing Price
- Airbnb Occupancy Rate
You can set the heatmap’s data set according to these filters to get a better idea of how each neighborhood is doing. This tool works like a weather map and is color-coded according to its performance. Areas that have higher rates are shown in green, and those with the lowest rates are colored red.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.
Mashvisor’s Real Estate Heatmap will help you find rental property online more efficiently.
What Is the Best Website for Finding Rental Homes?
As a real estate website, Mashvisor is built like no other. It specializes in property searches and rental market analysis. Because of this, Mashvisor has already helped investors by the thousands to find the best deals online.
Sure, platforms like Zillow, Realtor.com, and Apartments.com help folks find rental properties, too, but their tools aren’t as versatile as Mashvisor’s.
As a website, Mashvisor not only helps investors find great investment opportunities online. It also helps them perform investment property analysis so they can see if a property is worth investing in. The platform has a massive database that covers almost the entire 2022 US housing market. It is regularly updated so that users are guaranteed only the most accurate information, so they get the most accurate analysis results.
Because of its highly accurate database along with its powerful tools, Mashvisor currently has a high 4.6 out of 5 Trustpilot rating. It is a reputable and trustworthy website for real estate investors who want to find only the best investment properties online. This is why Mashvisor is the best real estate website for both seasoned and newbie investors.
Related: The 10 Best Real Estate Websites for Investors in 2022
Step 3: Isolate Desirable Neighborhoods
Finding the right state and city is only the first part. You still need a couple more steps to find the right investment property for you. And one of them is finding the right neighborhood.
To determine if a neighborhood is good for investing, you need to consider the following:
- Proximity to Amenities. Regardless of whether you plan to have a traditional or vacation rental investment, its proximity to public amenities matters. It will help determine how much you can charge on rent. The closer it is to public amenities, the more in demand it is as a rental property.
- Job Market. This is especially important for those who want to manage a long-term rental property. A growing job market tends to attract in-migrants. Folks who are looking to relocate need to know that they can easily get jobs in the place they’re moving to.
- Safety and Security. Simply put, nobody wants to live in or visit a place with a high crime rate.
- Economy. Other than a growing job market, a neighborhood with plenty of thriving businesses tends to attract residents and tourists.
- Accessibility. How accessible is the neighborhood to the rest of the city? Folks prefer to live in an area where public transportation is easily accessible. A neighborhood with a good transportation system is more likely to attract long-term renters and vacation rental guests.
- Development Plans. You also need to consider what the future plans are for a particular area. Are there any plans to convert part of a residential area into a commercial or industrial development? Will that large parcel of vacant land be developed into a residential zone soon? The future development of a neighborhood can greatly affect your income and investment in the long term.
Additional Crucial Considerations
On top of the considerations given above, you need to also find out how the neighborhood is performing in terms of rental income, cash on cash return, cap rate, and vacancy rate. You can use Mashvisor’s real estate heatmap to see if a neighborhood is profitable or an easy pass.
To use Mashvisor’s heatmap, just enter the location in the home page’s search bar. It will take you to a page with a map and a sidebar that contains the tabs Investment, Airbnb, and Traditional.
You can change the heatmap’s filters on the map’s upper left corner. The filters include:
- Traditional Cash on Cash Return
- Airbnb Cash on Cash Return
- Airbnb Rental Income
- Traditional Rental Income
- Listing Price
- Airbnb Occupancy Rate
Regardless of which filter you use, it will show you a color-coded map that highlights areas that rate high (green areas), low (red areas), and everything in between.
By adjusting the filters, you will have a better idea of how a market is doing according to your chosen filter. This heatmap gives you an edge over the competition as a real estate investor.
Step 4: Do Property Analysis
Once you have already identified which neighborhood you want to invest in, you may now proceed with your investment property analysis.
To do this, you need to watch out for the following:
- Monthly Rental Income. This determines how much a rental property can earn based on your rental strategy.
- Cash on Cash Return. This metric is one of two of the most used determining factors for profitability. In most cases, this is better than a cap rate because it factors in financing options in its formula.
- Cap Rate. This is another metric used to determine whether an investment property is profitable or not. Its main difference from cash on cash return is it assumes that the property is bought in all cash.
- Occupancy Rate. This metric measures how much a property is occupied relative to the number of days it is listed.
Property Analysis With Mashvisor
Given these main factors, real estate investors need a reliable investment property calculator to help them crunch the numbers. The good thing about Mashvisor’s investment property calculator is it speeds up the process of investment property analysis.
It is powered by sophisticated AI technology that is highly interactive and intuitive. It uses Mashvisor’s database to access important information using rental comps. These comps allow investors to have a realistic overview of the market conditions. By using these comps, they get a good idea of how much they can charge and what they can expect in terms of cash on cash return and cap rates.
Mashvisor’s rental property calculator can be used to estimate rental income and use it to compute ROI on rental property. It also gives investors a list of properties that are a fit for their needs. This is only one of the many unique features that Mashvisor has to offer investors.
Related: 10 Cities That Promise $2,000+ Rental Property Income and Stable Returns
Step 5: Place an Offer to Start Negotiating
Once you have found the most promising property for you, it’s time to place your offer on it.
The process of buying a property can be lengthy, depending on how much negotiating takes place. You will have to start with an offer on the property and hope that you get a favorable response from the seller. If the seller is okay with your offer, the transaction will be a lot faster. However, a seller might want to negotiate and make a counteroffer. Generally, negotiations are all about finding the middle ground where all parties involved are happy with the transaction.
Once you’re all satisfied with the terms and conditions, the process now moves forward. If you can’t afford to make an all-cash transaction, you should shop around for financing options. You need to look for mortgage options that will help you buy the property but will not be a burden to you in the long run.
After you find a good financing option, you may now proceed to have the property inspected and appraised. During this time, certain issues about the property might be brought up, which could lead to another round of negotiations. If things don’t go well, you can decide not to go on with the purchase. If there are no issues with the property and all the paperwork is in order, you may start the closing process.
Wrapping It Up
When it comes to investing in rental properties, it is important that you know exactly what you want before you even set out looking for opportunities. You need to be clear with your goals and have a good understanding of your financial situation. These will help you determine which rental strategy to take and where to invest in.
Real estate investing is a lot easier today compared to 10 years ago. The fast-paced advancement of technology now allows an investor to find rental property online in minutes. Where real estate investing and technology are concerned, none comes close to Mashvisor. It is, by far, the best real estate website for investors, given its features and tools.
To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.
