Real estate can be a lucrative investment, seeing that it has created over 90% of the world’s millionaires. However, it’s one of the most complex types of investment. From determining if you are buying in an up-and-coming neighborhood to securing financing for your purchase, it is critical that you make use of all the real estate investment tools available.
If put to good use, these tools will help ensure that your real estate portfolio works as well as possible. So, what tools are we referring to?
Well, there is a wide array of tools you can use to help you even with the tiniest details and make it easier for you to invest and manage your real estate investment. Here are eight valuable tools that will aid you in doing just that.
1. Property Profiler
Property Profiler allows users to search potential properties quickly and easily by providing current sales information for homes currently on the market. It also provides information about recently sold listings so you can get a sense of what’s selling in their preferred area or price range, all within their geographic location.
You can also quickly determine potential cash on cash returns and what to expect in terms of appreciation for each property. By providing this information in one place, Property Profiler makes it easier for the investor to compare different properties with relative ease, which is one of the best real estate investment strategies.
2. Debt-to-Income Ratio Calculator
This calculator utilizes user income, monthly expenses, including mortgage payments, property taxes, and insurance costs, among other factors, to determine what percentage of their income would be spent on housing costs, mortgage payments, and property taxes alone.
This number can help determine if a real estate investment is affordable or not. However, it should be noted that this doesn’t take into account any other debts you as the investor may have, including student loan debt or credit card balances. This is vital for people looking for passive real estate investing.
3. Rent vs. Buy Calculator
With this calculator, you can search for the exact location you’re interested in. You can search for the type of home you’re looking for and get results regarding renting versus buying.
The tool provides a good idea of how much more one might pay each month or year based on their desired area and type of home, with prices adjusted to 30-year fixed rates. This lets you see how much you’d save in the long run in terms of monthly/annual costs by buying rather than renting.
4. Closing Cost Calculator
Investing in real estate can be expensive even before factoring in paying off mortgages. This calculator does not take into account factors such as income tax deductions, cost of mortgage and down payment, and more. However, it gives a good idea of how much you can expect to pay in closing costs for properties in different areas.
You enter your desired area and the number of bedrooms and bathrooms you’re looking for. Together with that, add information about the type of property they’d like to buy and get an instant estimate of what you’ll be paying come closing day.
5. Mortgage Calculator
This mortgage calculator allows users to easily determine their monthly mortgage rate. It allows you to see the fees involved with getting a loan. You get to see what those fees will cost in total upfront, on a yearly basis, and over the entire length of the loan.
This tool provides all relevant information, including interest rates and down payment. It makes it easy for new investors or those not yet familiar with how mortgages work to quickly understand the process. You’ll have an easier time making an informed decision about how much investment property they can afford.
6. Amortization Schedule
Amortization is the term used when discussing how long it will take for installments of debt such as loans or mortgages to be paid off. This calculator helps investors determine the length of time it will take to pay off a home loan, including any interest. If you’re new and still don’t know how to invest in real estate, this is one of the most vital tools to have.
With this tool, you can enter your down payment amount and see how many years until the loan is fully paid off. You’ll also get to see the interest received on the original sum. It also shows monthly payments for each year along with an amortization schedule outlining everything in one place.
7. Property Tax Estimator
There are different tax laws in every state. It’s important that investors know what they are up against when looking at potential properties before deciding where to invest. This tool helps you figure out what your yearly property tax bill would look like if you were to invest in a specific county within a state.
From there, you can decide whether or not it is worth taking on this financial burden. Factor in how much income your investment will likely generate over time. Now, if you would like to defer property taxes, you may want to learn about 1031 exchanges.
8. Home Affordability Calculator
This calculator lets investors see their monthly or down payment for homes. Usually, it’s based on their desired location and price range, along with the other costs involved with getting a loan.
These costs include things like closing costs and home insurance rates. With this tool, you can choose between getting traditional financing or using an FHA loan to get more favorable terms.
This is essential if you’re able to pay your housing costs on time and want to avoid a private mortgage insurance fee. This calculator can be helpful in determining how much investment property you can afford. It’ll help you make the most out of your available resources.
Must-Have Real Estate Investment Tools
While there are several other real estate investment tools out there, these tools are some of the best and must-have basics for any investor. They’ll give you a good idea of what you need to get an edge over other investors regarding knowing which properties might be best for your investment portfolio.
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