Rental Basics in Phoenix>Question Details

Calum, Other/Just Looking in 00000

Best rental areas in Phoenix, AZ

Asked by Calum, 00000 Fri Feb 20, 2009

Hi, I'm looking at buying a residential investment property in Phoenix. What is rental demand like and which areas offer most likelihood of successful rental with good yield? Finally, I'm not resident in AZ. Who can recommend an honest and reliable property manager?

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Carlos’ answer
Calum,

If you wish I can provide you with some raw data that will help you with your decision. But remember that there are many factors to consider, including your price range, type of property, other costs associated with rentals (like city taxes, utilities, HOAs, etc) and rental ratios among other factors. Please remember to look at the entire picture before making a decision.

Carlos
ABR - Accredited Buyer Representative
.
0 votes Thank Flag Link Sun Feb 22, 2009
It's great that you're looking into an investment property in Arizona. You're asking great questions and here's some sample statistics on a few areas within the Phoenix area that get listed in MLS:

Area # of Active Rentals # Rentals Closed last month Ratio
Gilbert 307 175 57%
Chandler 447 186 42%
Tempe 286 92 32%
Phoenix 2043 632 30%
Scottsdale 2380 355 14%

In determining where you want to buy, it's important to consider many factors: inventory of rentals, how quickly rentals are getting under contract, price of home, expected price for rental, desired cash flow (taking into account other expenses such as insurance, taxes, maintanence, ...), long term goals for appreciation, ... In general, typically investors like to stay under $200K for a property. To really give you a good answer, I would need to know more about your situation and then we could look at all sorts of stats to make an informed decision about which area to purchase in. Even within the cities above, there are several zip codes and areas within those where you'll find various ranges of information.

I've also included a link below so you can see sample properties which have rented in the last month ... I tried to narrow the search to properties that were listed within the last 2 months and rented in the last month - but there will be some anomolies in there (e.g. some prices are incorrect (0, >several thousand), some were listed and then cancelled and relisted so they were on the market longer).

Once you have an area narrowed down, then finding a property management company is next. There are many avenues to explore from full service property management companies to listing with real estate agents to help you find and tenants for you to screen. It depends on what level of involvement you want to have in the investment. Typically, realtors have a good network of referrals for you.

It's a nice time of year to visit the Phoenix area right now to search for a property!
0 votes Thank Flag Link Sat Feb 21, 2009
Calum,

Many investors I know have said Scottsdale, NE Phoenix and Tempe for ASU students. Another good area is down town near the train. Some renters want to live in that area for easy transit to school or work.

I would decide you price range and if you want to have furnished rentals for the snow birds or families ect.

Here is a property management company I have referred business too! http://www.keymgmtcoinc.com/

Lucinda Tkach
Windermere Central LLC
602-799-6846
0 votes Thank Flag Link Sat Feb 21, 2009
Hi Calum,
I work with many investors purchasing in the northeast Phoenix, Scottsdale and Cave Creek areas. In these areas the rents stay high and stable and whatever are you consider, you need to look for a good stable neighborhood with easy access to highways for commuting as well as shopping and other amenities. One of my favorite areas is close to both the 101 and 51 and the very popular Desert Ridge Mall. Prices for properties in this area runs from 150k on the low end to over 500k. Rent runs from 1200 to 2000 with seasonals at nearly double that amount if you are interested in that market. There are many variables to consider when looking at investments and you should find an agent that really knows the rental market in a particular area as the city is quite large none of us can be familiar with the whole valley. First consider your price range for purchase, then your tenant, do you want to rent seasonally for the winter visitors (higher rents but more vacancy), families (close to jobs and amenities like good schools and malls), students and young adults (Tempe and south Scottsdale are prime areas for these groups and also Glendale for the ASU north campus). There are also parts of the city where you can pick up properties for under a 100k that make good rentals. Are you more concerned with immediate cash flow or are you more interested in long term appreciation? Whichever area you pick make sure there is a strong rental market with high demand, low vacancy and not too much competition from other rentals. Some parts of the valley are flooded with rentals although the demand for rental housing is increasing due to the high number of foreclosures. I also can recommend good property management for the areas I work in. Please contact me if you need any more information and good luck!
Tobie
tobieward@gmail.com
0 votes Thank Flag Link Sat Feb 21, 2009
Hi Calum!

Phoenix is now ranked as the 5th largest city in the United States. As such, it is very diverse and expansive metropolitan area with an almost infinite variety of communities. As such, there is not a simple, concise answer to your question about which rental areas are the best. Truth be told, there are many great areas for rental property investment.

Regarding a property manager, most of them tend to specialize in certain areas of The Valley of the Sun. Off hand, I don't know of a property management firm that covers the entire greater Phoenix metro. So again, the selection of a reputable property manager will be contingent on the area(s)in which you purchase your investment property(ies).

My best recommendation is that you secure the services and assistance of an experienced, full time Buyer's Broker with whom you can communicate, trust and otherwise work with you and for you in the accomplishment of your desired objectives.

Kindest regards,

...randy
0 votes Thank Flag Link Fri Feb 20, 2009
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