The Ultimate Beginner’s Guide On How To Find Investment Properties

A real estate investor is anyone who has purchased purchased a property or is interested in purchasing a property. The success of a real estate investor is determined by their previous experience, a network of other investors, their purpose for buying the property, and the market trend. One of the biggest mistakes new real estate investors make is not doing enough research before buying a home. An experienced real estate investor knows when to be quick in purchasing a home. Spotting bargains is not easy, but with Zumbly it’s never been easier.

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Factors to consider when buying your first investment property

When purchasing an investment property there are many factors that need to be considered. What makes life beautiful is that none of us are the same! Some of you may want to travel around the world, others don’t leave the United States.

What’s the best investment property for your lifestyle?

The dream. Flying up and down the coast, visiting your family in one city, getting down to business in another, and partying with your friends in a city that never sleeps. How is this lifestyle possible for someone who wants to be well traveled while also building their wealth? The answer is through investing in real estate in multiple cities. Otherwise, all of this traveling looks like exorbitant fees paid through rental properties—wasting your money away.

Even if constant traveling isn’t a dream of yours, owning multiple properties can be smart even within your hometown. Say you want to live on a beachside property for the weekend (who wouldn’t?), but spend your weekdays in the city so you can be closer to work. This situation is possible through renting, but you’ve never heard a rich person tell you they made their millions that way.

At the end of the day, owning is better than renting. Because the path to a successful life is earning money doing something you love while knowing how to spend it.

What’s the housing market trend for properties in your desired location?

Ups and downs, bulls and bears, the ebbs and flows, ultimately the intelligent investor knows how to weather the storm of a greedy or dormant economy. And while the economy can seem complex and overwhelming at a macro level, Zumbly allows you to comprehend the local trends for the area in which you would like to own property.

Often, the local economy behaves much differently than the national economy. So without the proper understanding of what’s going on at the micro level, you might just be swept away by CNBC economic forecasters telling you when to buy (hint: they are usually wrong).

What’s your budget?

Money makes the world go round my friend. So consider your budget every time you make a serious investment decision. Without one, you may find one day that your bank account has run dry. And guess what you can’t do when your bank account has run dry? Invest in property!

What are your goals for an investment property? Flipping, renting, building equity, temporary residence, etc.

Real estate investors have different goals when it comes to investment properties. If it’s your first home purchase then you’re most likely looking to build long term equity. This can be a great investment to offset personal income taxes if planned correctly. Maybe you’re always on the go and love to travel. If so, then short term renting works really well. Other real estate investors love to find properties to flip. The thrill of buying a distressed property and reselling it after remodeling is very attractive. No matter what you’re trying to do we highly advise that you set clear goals.

Related: What is a Good Cap Rate for Rental Properties in 2019?

beautiful investment property

Real Estate Language to Understand Zumbly Better

What is Net Income?

Net income is how much money you take home after you subtract your mortgage, property, tax, HOA, and insurance. Calculating  your net income before you purchase a home is extremely important. Many new investors neglect insurance, HOA, and property tax. Luckily, Zumbly does it all the hard work for you with just one click of a button. It even automatically calculates it for mortgage and cash.

Mortgage vs Cash Investment for Real Estate Investing

There’s a big difference between a Mortgage and a Cash investment. Mortgage payments for a home require a down payment of about 20% towards the home, and then the bank provides a loan for the rest of the loan. A mortgage requires the individual to have outstanding credit, job history, and other factors to receive the loan. However, a mortgage payment accrues interest which increases your monthly cost to the property as well as extend the time necessary to buy a property.

In real estate investing, cash is king because you the home-seller has less risk and the deal can go through faster. As a result, you will be able to negotiate the price down on the property which provides an opportunity to generate a greater ROI on the home.

Short-Term Renting

Airbnb has been one of the biggest disruptors of real estate in the 21st century. As a result, you now have many different options to live your lifestyle. There’s a lot that can be done with short-term renting with Airbnb as a traveler. If you own a home, and you’re frequently flying then that means that there are days, if not weeks where your home is vacant. This is a great opportunity to list your home on a short-term rental service like Airbnb.

Related: House Hacking: Live for Free With an Airbnb Investment Property

Here are a few questions you might ask for short-term renting:

Want to take a trip to another part of the world and have an authentic experience?

Then you rent a family home in a rural part of the world from Airbnb at an affordable price and the protection of Airbnb.

Sick of staying at overpriced hotels for little to no luxury in big cities?

For the same price, you can rent a studio or a multi-bedroom home for the same price if not less.

Traveling with a group of friends?

Good luck taking a group of friends and fitting everyone in the same hotel room. If you really tried, you can. During certain conventions and trips, we’ve seen people of 6 to 8 people sleep on the floor of the hotel room. That doesn’t sound like a great experience. Next time just rent a house from Airbnb for the same price.

Long-Term Renting

If you love the good old-fashioned way of real estate, then you’ll probably go with Long-Term Renting. Some example of people who need long-term renting are families, an individual who relocated for their new job, or anyone who is looking to stay in a property for more than an year.

Daily Rate & Occupancy

The daily rate and projected occupancy are estimates that are based on the pulse of short term rental marketplaces like Airbnb, HomeAway, or VRBO. If you were to purchase a property, this is the expected

Long-Term Renting vs Short-Term Renting

There are pros and cons for both long-term and short-term renting and the decision should be made solely based on your goals and lifestyle. We will briefly go over the pros and cons of long-term renting, vs short-term renting.

Benefits of Long-Term Renting:

  • Predictable Income
  • Multi-year tenants

Shortcomings of Long-Term Renting:

  • Harder to remove/evict from premises
  • Difficult to increase price
  • Difficult to upgrade house
  • Tenants may not notify you of damages

Benefits of Short-Term Renting:

  • You can rent a spare room
  • You can rent your room while you’re traveling.
  • Holidays can make you more money
  • Can facilitate a home exchange

Shortcomings of Short-Term Renting:

  • Unpredictable income.
  • Prolonged periods of no occupancy
  • Always have to keep property in best condition.

Related: Mezzanine Loans: Everything You Need to Know

Find Income Property for Sale – Zumbly’s Investment Property Finder

Zumbly was created with the goal of helping individuals make the best investment property decision to fit their lifestyle. We created a step by step guide on how to get the most out of Zumbly. If you’re just like us and would rather learn from watching a video then check out the video we made that goes over all the steps below.

Step 1 – Search a location or property on Zumbly

For the sake of the guide, we will search for properties in Los Angeles.

Zumbly homes for sale in los angeles

Once you’ve entered your search you will see properties with an home score of 10 on the left side, and on the right frame you will see white circles with numbers in them. The number inside the white circle tells you how many properties for sale are inside that location.

Step 2 – Add filters and Save Searches

Narrowing down your search is extremely easy with Zumbly. You can narrow your search for investment properties by price, number of beds, number of baths, types of properties, and we even have an advanced search where you can narrow your search through home score, days on the market, and even lot size.

advanced investment property search zumbly

Once you input the parameters you want, make sure you press “Save Search” on the top right hand side of the page. This will save you a lot of time if you’re searching for different parameters. To access your saved searches in the future, simply click on your profile picture and then select “Saved Searches” from the drop down menu.

Save your searches by signing up for Zumbly.

Step 3 – Zoom in to a specific location to find investment properties on Zumbly

In order to see all the properties in a specific location, you will need to zoom in. There are a few ways to achieve this.

zooming in to find investment properties with Zumbly

Zumbly Home Score

Zumbly took whole market and weighed the market against each other. Bottom of the market is 0s, and the top of market is 10. The properties have been proportionally broken evenly and broken into segments. Zumbly’s home score is generated in real-time and is based on income earning potential. As discussed previously, the range is from 0 (lowest) to 10 (highest).

Zumbly’s numbers are not perfect, but they’re a great way to get a true look at the market. The score is determined by comparing similar properties based on how many bedrooms, square feet, price the properties have.

We take the data to the next step.

Blue Dot – Excellent (10)

A property with an home score of 10 is the

Green Dot – Good (7.1 – 9.9)

A property with an home score between 7.1 and 9.9 is good.

Orange Dot – Okay (5.1 – 7)

A property with an home score between 5.1 to 7.0 is Okay.

Red Dot – Fair (0 – 5)

A property with an home score between 0 to 5 means that the properties are fair and on the bottom of the market.

Step 4 – Select a property

Selecting a property is very easy. You can either choose a property from the menu on the left or directly click on one of the colored dots. We will move forward and select a property with an Excellent Property home score.

The property we’ve selected is 6507 Matilija Avenue Valley Glen, CA 91401, you can find it on Zumbly here. The property has 1,358 square feet and is currently priced at $785,000 with 3 beds and 2 baths.

select an investment property

Curious to see what the home score of homes near you are? Sign up for Zumbly, and stay up to date with real estate trends in your area!

Step 5 – Analyze if the investment property is a good fit with Zumbly

The most important step in finding the right investment property is in your analysis. Depending on your lifestyle, goals, and other factors you will either buy a property for short-term renting or long-term renting. Zumbly provides comprehensive analysis for both short-term and long-term renting. Furthermore, you will also see what your expected net income will be if you were to purchase a home with a mortgage or if you were to purchase it with cash.

Related: 10 Best Real Estate Investor Websites in 2019

analyze an investment property

Do you have a lower interest rate? Great, you can change it easily inside the mortgage drop down menu. Maybe you want to calculate the net income if you were to purchase the investment property with cash. No matter what your circumstances are, Zumbly has you covered with our in depth mortgage calculator. We do all the hard work for you, so you don’t have to.

Short-term renting calculator (for Airbnb, Homeaway, VRBO)
One of our user’s favorite features is the Daily Rate & Occupancy calculator. Inside the Daily Rate & Occupancy calculator, Zumbly adjusts the expected Net Income based on the nightly rate and the projected occupancy. We highly encourage you to play around with the calculator to find out what a best and worst case scenario would look like if you were to do short-term renting.

short term rental calculator

Airbnb has been one reason many people have been trying to find investment properties. Just because it’s one reason to try and find an investment property, it doesn’t mean that everyone’s goal is to go down the route of trying to find investment properties for short-term renting.

Long-Term Renting Calculator

Another powerful feature inside Zumbly’s kit is the Long-Term Renting Calculator.

long term rental calculator

The long-term renting calculator is a sliding bar that you can move left to ride based on what you estimate you can rent it out long-term. As you move the bar to the left or to the right, the net income will automatically be adjusted.

Signup for Zumbly for full access to the website.

Step 6 – Adding a Property to your Favorites

Found a property you’re interested in? Great, it’s time to add it to your favorites search. This is one of the perks you get for registering an account with Zumbly.

Adding a property to your favorites with Zumbly is very simple. You can click on the heart button inside the white frame or just click on the top bar that says “save” next to the Twitter share button.

You’ll know if it’s saved if the heart is black. If it’s not saved then the heart will be white.

add investment property to your favoritesTo access all your saved searches of your property you will need to go to your profile icon. Next you will click on your profile, and a drop down menu will populate. There will be three categories: Favorite Properties, Saved Searches, and Settings. Just click on Favorite properties and you should be all set!

add investment property to favorites

Sign up today to easily manage you investment properties using Zumbly.

Will Zumbly help me find the best real estate investments?

Zumbly was created as a tool to help you save time finding investment properties. The “best” real estate investments are solely determined by you and your goals. Zumbly is a tool that can help you find good investments. Like every other platform, the tool is as good as the user. The more experienced you become as a real estate investor, the more useful Zumbly will become to you.

Knowing the expected income you can make from an Airbnb investment property, or other short-term rentals is extremely useful. The Zumbly home score is a great way to filter properties out when you’re doing comparative market analysis, which will save you a lot of time. The short-term rental calculator is a great way to find out what you can earn if you were to host your property or future property on websites like Airbnb.

Related: How to Start an Airbnb Business With 5 Easy Steps Using Zumbly