Investment Strategies The Most Profitable Types of Real Estate Investment for 2022 by Hamza Abdul-Samad January 6, 2020February 27, 2022 by Hamza Abdul-Samad January 6, 2020February 27, 2022 One of the best features of real estate investing is its vast diversity. Fix-and-flips, wholesaling, and rental properties are some of the best options real estate has to offer. But what type of real estate is the most profitable for 2022? The answer is quite simple- Investing in rental properties is the best investment for 2022. To be more specific, the best types of real estate investment are traditional and Airbnb rental properties. Why are these types of real estate properties the most profitable? How can you find the most profitable investment properties for 2022? Read this blog to find out! Related: Is Real Estate a Good Investment? Why Rental Properties Are the Most Profitable Types of Real Estate Investment for 2022 Airbnb and traditional rental properties are the most profitable investments for many shared reasons. Here are the five main reasons why rental properties are the most profitable types of real estate investment: Positive Cash Flow and High Return on Investment When you invest in either long-term rental properties or Airbnb rentals, you have the same goals: to achieve positive cash flow and a high return on investment. What is positive cash flow? Cash flow is the difference between rental income and expenses. Positive cash flow is when the difference is positive or a net gain. Negative cash flow, on the other hand, is a net loss. Therefore, positive cash flow properties are rental properties that generate a net profit. Investing in rental properties also yields a high return on investment. Return on investment (ROI) is measured in different ways using real estate metrics like cash on cash return and cap rate. ROI lets investors know how much money they will earn taking into consideration the initial investment and different property expenses. Properties with a high ROI are essentially the most profitable investments. Airbnb and traditional rental properties are the best types of real estate investment because you can earn monthly positive cash flow and a high ROI. Investing in rental properties delivers consistent and immense profit. This tends to be truer for an Airbnb investment property than a traditional investment property in most real estate markets since Airbnb rental income is usually higher. Real Estate Appreciation An investment rental property also benefits from appreciation. Real estate appreciation refers to an increase in property value over time. Appreciation is an excellent form of profit for a couple of reasons. Firstly, when an investment property appreciates, its selling price rises. With an increased selling price, real estate sellers can make a good return on investment when they put the property back on the market for sale. Secondly, when paired with a cash flow rental property, appreciation makes the investment much more profitable. This real estate investment strategy, referred to as the buy-and-hold strategy, is the top method of investing in Airbnb and traditional rentals. In short, appreciation is another reason why rental properties are the best types of real estate investment. Tax Benefits Investing for income with rental properties yields another profitable benefit. By owning an Airbnb or traditional rental, investors are eligible for tax benefits. Tax deductions are the most common form of these benefits. Tax deductions range widely. However, the key theme among them is that any expenses associated with investment activity can be deducted. Common examples include repair costs, depreciation, insurance premiums, and mortgage payments. Tax benefits may not be the primary reason for investing in rental properties to some. However, they act as a welcome cherry-on-top for investors. Therefore, tax benefits bolster the case that rental properties are the best types of real estate investment. Another form of tax benefit comes to real estate investors who invest in Opportunity Zones. Learn more: How to Invest in Opportunity Zones. Active or Passive Income Another reason why rentals are the best types of real estate investment is their flexibility. Many investments are rigid when it comes to the required commitment. By investing in rental properties, however, investors are free to be as involved in the investment as they want. Short-term and residential income properties, for instance, can be active or passive real estate investments. A full-time commitment, including investing and maintaining, is referred to as active real estate investing. Passive real estate investing, on the other hand, doesn’t require as much effort. Passive investors usually hire property managers to maintain the income property. With different approaches to rental properties, investors can participate as they see fit and reap the rewards. Choice of Real Estate Rental Strategy The diversity of investing in rental properties adds to its immense profitability. As we’ve discussed, the best type of real estate investment property is both traditional and Airbnb rentals and you can choose whichever you want based on your location and personal preferences. Traditional rental properties are the most common residential income properties. Their consistent rental occupancy and income make them worthwhile investments. The Airbnb rental strategy has risen to the ranks of the best investment strategies. In areas with lenient regulations and tourism, Airbnb short-term rental properties have seen massive success. How to Find the Most Profitable Investments for 2022 We’ve talked about why rental properties are the best types of real estate investment for 2022. Even so, not every rental property for sale in the US housing market will be the best. So how can you find the most profitable investments? The answer is with Mashvisor’s real estate investment tools! While Mashvisor offers an array of tools, let’s take a look at the two you will need: the heatmap analysis tool and the investment property calculator. Related: 4 Best Property Search Tools for Investors Heatmap Analysis Tool Mashvisor’s heatmap analysis tool is the must-have tool for finding the best types of real estate investment. A heatmap is a tool used to perform a neighborhood analysis. In other words, a heatmap analyzes a specific investment location. Mashvisor’s heatmap presents its traditional and Airbnb data in a color-coded, visual form. The heatmap is interactive. It allows real estate investors to analyze a location using specific property filters. The filters include listing price, rental income, cash on cash return, and Airbnb occupancy rate. By using Mashvisor’s heatmap analysis tool, investors can find neighborhoods with the most profitable properties for 2022. Mashvisor’s Heatmap Analysis Tool Investment Property Calculator Before settling to buy Airbnb property or traditional property, the real estate investor needs to analyze the property itself. With Mashvisor’s investment property calculator, this can be done in a matter of minutes. An investment property calculator is used to perform an investment property analysis. If you wish to invest in Airbnb, this Airbnb calculator, as it is sometimes called, computes data for properties and allows you to compare both rental strategies to see which one will make more money. Above all, Mashvisor’s calculator estimates property expenses and profitability metrics. Like the heatmap, the investment property calculator is interactive. This allows investors to understand what is required to maximize a property’s profitability. Mashvisor’s Investment Property Calculator Search for My Investment Property Get Your Hands on the Most Profitable Types of Real Estate Investment! Rental investment properties are the best types of real estate investment. With their high profitability, there is no match. To start searching for the most profitable investments, CLICK HERE to start your FREE trial with Mashvisor’s investment property cash flow calculator! For more on how to make money in real estate and how to invest in Airbnb and traditional properties, schedule a demo with our team. Start Your Investment Property Search! START FREE TRIAL AirbnbAppreciationCash FlowReturn on InvestmentTax BenefitsTraditional 0 FacebookTwitterGoogle +PinterestLinkedin Hamza Abdul-Samad Hamza is a long-time writer at Mashvisor. With a focus on real estate investing tips, concepts, and top investing locations, he aims to help all aspiring investors who come across his blogs to hit the bank with their investment property. Previous Post How to Find Multifamily Housing Properties Below Fair Market Value Next Post How to Get the Highest Return on Investment Property Related Posts Why Real Estate Is Among the Best Long Term Investments in the US at the Moment The Top 8 Reasons to Invest in Real Estate Right Now Wholesaling Real Estate: All You Need to Know About the Process How and Where Can I Find the Best Real Estate Investments? 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