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Real estate investments have the potential to pay off big — but they can also end up costing you big if you choose the wrong property. And although there are no guarantees when it comes to investing, certain types of real estate have more potential than others when it comes to netting you a healthy ROI.
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Given the current real estate market, knowing where to invest your money is key. I spoke to top real estate investing experts to get their predictions for the best types of real estate investments for 2022.
Mindy Jensen, co-host of the “BiggerPockets Money” podcast and the co-author of “First-Time Home Buyer, The Complete Playbook To Avoiding Rookie Mistakes,” said that she is “still bullish on long-term rentals.”
“In cash-flowing markets, they are still cash-flowing, and in appreciating markets, they are still appreciating,” she said. “While the Fed has indicated they will raise rates three times this year, rates are still ridiculously low, making these investments a good, long-term choice using leverage to lock in low-cost financing for 30 years.”
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“Short-term rentals are also a great option, so long as you’re buying in areas with established short-term rental policies and a healthy, existing short-term market, like vacation spots,” Jensen said.
However, avoid investing in short-term rentals in areas with more ambiguous laws and policies regarding this type of property.
“Cities that have ambiguous laws can change those laws, and your rental can go from excellent cash flow to complete dud with the changing laws,” Jensen said.
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“Medium-term rentals are starting to fill the gaps between the long-term and short-term markets,” Jensen said. “In many cities where they have created strict short-term rental laws, they allow medium-term rentals — furnished rentals for longer stays.”
Medium-term rentals are gaining in popularity thanks to the rise of remote jobs.
“In this gig economy, there are digital nomads who can work from anywhere there’s a Wi-Fi connection and choose to travel for fun, as well as people who travel extensively for their job (like travel nurses) who don’t want to stay in a hotel for an extended time,” Jensen said. “These rentals are the best of both worlds — …….