I am looking to invest in 1 Rental home. What is a good area of phoenix to do this in? Scottsdale? Goodyear? Downtown?

Asked by 6602marine, Scottsdale, AZ Tue Sep 13, 2011

I am a first time homebuyer in the Military, I am currently in California and may deploy next year. Not sure which would be better a house or apartment/condo. I plan on moving to the Phoenix area in 2 years and possibly purchase another home at that time. Looking for a good ROI, what kind of ROI are we looking at?

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26
Cristine Orz…, Mortgage Broker Or Lender, Colorado Springs, CO
Thu Feb 9, 2012
please do remember that using your VA you must move in to the home in 30 days of closing it cannot be used to purchase a future primary residence :)
0 votes
A. J. Stewa…, Agent, Fort McDowell, AZ
Thu Feb 9, 2012
Hello, I am currently working on a home purchase for my good friends in California who are in the Navy and planning on moving back to AZ in May. There are so many options available, I work with foreclosures, short sales and traditional sales. Right now the prices are great and the good deals go fast. Make sure you are working with an experienced agent who is going to put a lot of effort into this for you. Call me and I can help you. You can also access the MLS through my web site below. Thank you,
AJ Stewart
Veracity Realty Group
480-217-2167
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Marie Cancil…, Agent, Phoenix, AZ
Thu Jan 26, 2012
The Phoenix area is such a large area but fairly easy to break down to find out where the best investment property would be for you. Are you planning on keeping this property as an investment long term? Inventory is pretty low and prices seem to be on the rise, so now would be a good time to start looking. If you would like to talk in detail I would be happy to narrow down a few options for you.
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Cristine Orz…, Mortgage Broker Or Lender, Colorado Springs, CO
Tue Jan 17, 2012
you do need to know that you cannot use your VA to buy an investment property (that is any home you or your spouse are not able to occupy within 30 days of closing )......so do make sure that you take that into account as that type of loan will require a fairly large downpayment 25-30% .... I do work with alot of VA buyers and having been a brat/ military wife myself know how hard it is to try to manage a property and not be in the state forget about out of the country , perhaps when you are ready to live here you would like to speak? I would be most happy to help in the search . Warm regards, Cristine
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gabriel palo…, Agent, Pompano Beach, FL
Sat Jan 7, 2012
First time homebuyer to invest in a rental property?Out of town ? Nah..... What's the point? No return will give you the gratification of an investment where someone else is enjoying your property or damaging it can you be sure?
Just another personal comment managing rentals is no simple process especially when it is an out of town purchase . Purchasing with a VA may give you some benefits, but saving for the next two years for a bigger deposit towards the equity makes more sense from any perspective.
Timing is everything. Buy a place when you move Phoenix not before. It takes three minutes to boil a three minute egg an extra few minutes will make it hard boiled.
0 votes
Susan Lehmku…, Agent, Scottsdale, AZ
Wed Dec 21, 2011
Definitely a great time to purchase an investment home in the Phoenix area. There are lots of options and it really depends on what you want and how much you want to invest. Do you plan to live in the property when you move here? If so, what area of the valley would you want to live in? I would be more than happy to help you narrow down the areas and see what's available. We can discuss the pros and cons of single family homes versus condos or townhomes to determine the right fit for your needs.
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Tooraj Bakht…, Agent, Scottsdale, AZ
Mon Dec 19, 2011
There are all great areas but it all depends on the amount if money you want to spend since prices are different in all these areas. Another important fact to pay attention to is the multiplyer that shows the rent based on the investment based on different towns and furthermore, different zip codes.
Tooraj
Remax excalibur
601-369-8259
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Bradley Stie…, Agent, Scottsdale, AZ
Mon Dec 19, 2011
Location, location, location is the key to buying a great investment property. You could find a nice investment property in the Avenues of Phoenix, which is very low prices, but then you will be dealing with exhausting tenant issues. I would recommend you look in nice areas like Chandler, Tempe, Gilbert, Scottsdale, Peoria, and North Phoenix. I would also make sure if you are looking for condos to watch out for HIGH HOA fees. Most HOA monthly fees should not exceed $200 or less a month. With a condo you will not have to worry about exterior maintenance with the roof or landscaping up keep. Condos are great rentals without the headache of dealing with all maintenance of a single family house. I work the entire valley so let me know your price range and I would be glad to help. 602-502-4962------- http://-www.bradaz.com
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Mark Gable, , Phoenix, AZ
Sun Sep 18, 2011
Ok Jarhead, let's think this through. You're new to investing and you're looking outside of your current living area and you may deploy soon (I'll bet you know Phoenix though) . To rent out a single family home on your own without a property manager means you better live nearby. I think you're on the right track because Phoenix is a great area to invest in now, but make sure your bases are covered. Contact me if you're looking for a good property manager in the area.

I'll give some generic ROI figures from one of my recent rentals. I put down a total of $25 k and receive about 15% ROI annually. I'll hold the home for at least 2 years and anticipate a nice appreciation when I sell. Good luck and Semper Fi!
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Irma.groot, Home Buyer, Seligman, AZ
Wed Sep 14, 2011
Hey marine - thank you for your service and keep your head low when you deploy. Been there, done that, got the T-shirt. Stay safe.

Also an experienced home buyer, investor (I am not a realtor OR agent) and I want to tell you these people are blowing smoke up your............

Depending what you want for your family or are you by yourself? I just negotiated a home (SFR) for my single son. Homes are (still) going for good prices here and it seems (to me) that the agents are playing a game of their own.

If you want to be close to the Base (who's future is iffy right now if they take away the F-16's) then you're talking waaay WEST.
Generally, North East has been where I've bought living for me type homes and have always done well, either renting them out OR living in them myself. I've never lost money on any of them.

There are a lot of good deals out there and, if you're willing to roll your sleeves up, do a little repair, paint, replace carpet/flooring and yard work, you can get a great deal in the Phoenix area.

I, personally would not get an apartment/condo or anything with an HOA. HOA's are a big pain in the but and end up costing you money and you're in control of a board (which could be any body). I have one property left in an HOA and, when the market turns - I'll be selling it.
It's in Scottsdale (near old Scottsdale), so if you're firm on a condo in Scottsdale, I would consider selling it and a competitive price. It's on Indian School Rd, West of Scottsdale Road.

Anyway, I'm more about lending a helping hand to you than my property. I do know a very nice agent (not personally, but she was listed on a property I looked at and she had a lot of integrity) who will send you listings daily (or when they appear) with your criteria on them. Most agents have that now, BTW.

I'd be happy to give you my NOT SO HUMBLE opinion. I've bought/rented out/sold/lived in properties all over Phoenix, New River, Scottsdale, etc. for years and years (over 20), so, although I'm not a realtor, I think you might value or benefit from my opinion.

Take care and good luck. You can email me at forensic(dot)irma(at)gmail(dot)com
forensic.irma@gmail.com
0 votes
H. Stit, Both Buyer And Seller, Scottsdale, Chicago, IL
Tue Sep 13, 2011
McCormick Ranch Scottsdale, Arizona. Stay inside the 101. When prices fall, they fall slower and gain faster if you are inside the 101. When you live outside the 101 the exact oppositie is true. McCormick Ranch is an upper middle class development. Last year there were over 400 properties for sale here. Now, less than 150., whiich tells me this neighborhood is regaining its value.
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Tooraj Bakht…, Agent, Scottsdale, AZ
Tue Sep 13, 2011
As Barbara have mentioned, each demographic serves acertain type of investor and in this market, as an investor, you have many choices to buy in an area that meets your investment and return requirements. If your reason for a purchase is to rent the property, you have to make sure you compare rental statistics of different markets. Each price category and town has different identity.
A general ROI number is not going to be help you. If you have an investment dollar in mind and the type of property you would like to buy and the demographic you try to reach, then we can look at the ROI. IN general the GRM in the valley varies from 4 to 11 with a median of 6.
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Barbara Lond…, Agent, Scottsdale, AZ
Tue Sep 13, 2011
As an agent who specializes in Investment properties throughout the valley, the answer has only to do with how much you want to spend, the type of residential property, and also your GRM and ROI requirements. This is what we do for clients before deciding on a neighborhood.
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Barbara Lond…, Agent, Scottsdale, AZ
Tue Sep 13, 2011
As an agent who specializes in Investment properties throughout the valley, the answer has only to do with how much you want to spend, the type of residential property, and also your GRM and ROI requirements. This is what we do for clients before deciding on a neighborhood.
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Frank Scarpo…, Agent, Scottsdale, AZ
Tue Sep 13, 2011
6602marine,
It may sound trite but right now anywhere you purchase for Investment in Maricopa Cty would be good. Our Inventory is declining month by month. Your decsion as to specific area or city should be determined by what your Investment objectives are.
If there is a chance of deployment in a year then you may want to think Condo as a stnad alone home will require caretaking - outside mainenance, etc. It's not impossible just somewhat easier with a condo.
In Scottsdale's prices may be a little higher but the upside potential mat be greater year round than say Goodyear where the initial invesment prices will likely be lower.
Good luck with your investment, the timeing is excellent.
Semper Fi
Web Reference:  http://www.frankscarpone.com
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Laura G Kost…, , Scottsdale, AZ
Tue Sep 13, 2011
I am an investor myself and so you need to decide if you are looking for a rental or rental for later use as your home. Usually the best ROI is in the lower end properties. There is so much to consider in buying a rental home that you need to have a very versed adviser to walk you through all the steps. Someone who knows rental areas and who know the financial metrics to calculate a true ROI. Best of luck in your search.
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Lucinda Tkach, Agent, Scottsdale, AZ
Tue Sep 13, 2011
I am working through out the valley with investors. Feel free to contact me direct I have many resources to provide assistance including profit loss work sheet.

Depending on price range Scottsdale is a great area however prices are higher than west valley and Goodyear. Prices are at an all time low so to invest in schottsdale would be an excellent investment. Feel free to contact me direct and I can assist you with multiple resources.

Regards,
0 votes
Marlys Rolli…, , Phoenix, AZ
Tue Sep 13, 2011
Now is a good time to buy. We have plenty of people looking for rentals. If, you are familiar with the Phoenix area you might want to think about the area you would want to live in even if just for a short time. Condos would be a good choice because the HOA would take care of some of the things such as common areas, pools, outside maintenance, etc. that could be costly to you if the tenant doesn't care for them properly. If, you have questions I will be happy to help just call or email. Thanks and Good Luck.
0 votes
Maria Lourdes…, Agent, Scottsdale, AZ
Tue Sep 13, 2011
It all depends on the price that you are willing to pay for the property, and also, for the amount of the rental income you would like to receive. As you well know, the rental income will be equal if not more than your monthly amortization, HOA fees and maintenance expenses, among others, to be advantageous for you. I usually recommend Phoenix for investment properties around $100 K and Scottsdale, if you have a bigger price range. These two cities are better places to invest for rentals than the cities that our outskirts of the heart of Phoenix. For more explanations re: your inquiry, please do not hesitate to call me. Regards,
Maria L Javier MD
DPR Realty LLC Scottsdale, AZ
(480-)580-7984
0 votes
Jim Mitchell, Agent, Tempe, AZ
Tue Sep 13, 2011
Hi 6602marine. Great question! If you're looking for long-term appreciation plus immediate rental income, then single-family homes Scottsdale are at the top of the list for meeting BOTH of those criteria...BUT...you'll pay more (price per sq/ft) in EVERY zip code in Scottsdale for an average single-family home than you would in say, Laveen, Tolleson or Phoenix (85043).

Those three areas boast mostly newer homes in newer subdivisions (2000 or newer), and the prices are still very reasonable. You'll get a very nice return on your investment once the property is rented, keeping in mind that the long-term appreciation will likely be less than in Scottsdale, Tempe, Chandler or Gilbert.

If you'd be happy paying between $65,000 to $80,000 for a nice, newer, 3-4bed/2-3bath/1500+ sq-ft home that's only 5-8 years old (expect to do some rehab work-mostly carpet/paint/etc), secure a monthly rent between $850-995 per month (AND rent it QUICKLY if it's clean inside & out), then you should look at those areas that I mentioned.

The same size home in Scottsdale, while the area IS more desirable to most, will cost about 30-40% more and will be built between 1960-1970-ish. Don't get me wrong, that area is HOT right now too, and available inventory of homes is WAY down from what it was last year.

Chandler, Mesa, Gilbert, Tempe all offer good investment opportunities as well, but I just believe that you can save some $$$ on the initial investment and still get a nice rental return (CAP rate) if you look in Laveen, Tolleson, Phoenix (85043 & 85037).

I recently sold three homes to an investor (2 in Tolleson & 1 in Phx-85043) in the past few months.
The highest we paid was $70k and after some interior rehab (avg. cost is appx. $6-8k), ALL three homes rented within 2-3 weeks of being listed; the rents were between $850-900.
*These properties didn't come easy...there was a LOT of competition for these homes from other CASH investors and some 'owner-occupants'. It's all about timing and how your offer is presented that will help 'seal the deal'.

As for condo/townhome investments, there are some good ones out there but there are other issues to consider that would cut into your ROI (HOA fees being the biggest culprit). That being said, there are plenty available in ALL areas of the Valley; they range from $10-12k up to over $100k. However, In my opinion, nothing beats a nice single-family home in a good neighborhood for long-term growth and immediate rental income.

I hope that helps make your decision a bit easier! The bottom line is...and I think everyone would agree...this is the BEST time to invest in real estate in AZ in the past 15-20 years (if not longer), and with some solid research, good representation and a little luck, you'll find a great investment property that will bring you good returns for MANY years to come!

You'll get a LOT of varying opinions from the responses here on Trulia, most will be GOOD advice from solid agents that are active and in the market DAILY. Choose one to represent you and it'll make your life (and the buying process) a LOT less stressful and a LOT more profitable!

Regards,

Jim Mitchell
Century 21 All Star, REALTORS
Cell: 480.231.6769
jim.mitchell@century21.com
0 votes
Crescent Gro…, Agent, Orlando, FL
Tue Sep 13, 2011
oh and I just spoke to my client he's authorized a price drop so the price on the property I told you about is now 89,900 - thanks
0 votes
Andy Griffin, Agent, Scottsdale, AZ
Tue Sep 13, 2011
Depends what you have to spend. The under 100k market is very hot w/cash buyers so expect to pay 100% of value...if you can get a seller to accept your financing offer. You can expect between 10-13% return in area's like S. Phx & Laveen where you can get a 2005 build for $40 a sqft.
If you can spend a little more you can get an older house in the Old Town Scottsdale / Arcadia area of Phoenix that you can get into for 120-180k. Homes are a little older and may require more upkeep and the returns will be a little tighter but you are in an area that has less crime and your renters typically will have something more to offer, ie. better deposits, better credit, better jobs, etc.
Good Luck and Semper Fi.
0 votes
Barbara Woyak, Agent, Scottsdale, AZ
Tue Sep 13, 2011
I think this will depend on what your definition is of a "good ROI". If you want the best Cap rate then right now that would be Goodyear or some of the southeast valley communities. If you want a better longer term appreciation rate then Scottsdale or the downtown area would be better.

Barbara Woyak
Keller Williams AZ Realty
602-329-6655
Barbara@BarbaraWoyak.com
0 votes
Crescent Gro…, Agent, Orlando, FL
Tue Sep 13, 2011
Hi 6602marine,

The Phoenix/Scottsdale area is currently seeing rents increase so it's a fantastic opportunity to enjoy tremendous R.O.I. It varies from city to city, neighborhood etc. And of course price points. I have a listing for example, with a two year tenant in place, always pays on time, professionally managed, great community with amenities - we're asking $94,900 and the tenant pays $950/mnth plus taxes. Please ake a look at the property website link below, and let me know if you have an interest.

Thanks
Uzi Husain, REALTOR
Keller Williams Integrity First
18940 N. Pima Road, Suite 100
Scottsdale, AZ 85255
http://www.movenorthscottsdale.com
http://www.scottsdalehousingdeals.com
http://www.paradisevalleyhousingdeals.com
http://www.homesbyuzihusain.com
0 votes
, ,
Tue Sep 13, 2011
Dear 6602 Marine:

The best area is where JOBS ARE GOING TO BE CREATED.

Intel is building a 5 BILLION dollar chip plant to be completed by 2013.

Smart investors are quietly buying great rental homes in that area before the crowd catches on.

I wrote an offer on a home in Gilbert 2 weeks ago, your typical GREAT RENTAL 3 bed, 2 bath, 1800 sq ft for $129,000

On the market for 5 days and had 7 offers. We offered full price and was beaten out by an all cash investor who could close sooner.

Whatever you buy ensure your agent actually grew up in the area you're going to be buying in, they know inside information the new comer can't possibly know having just moved here.

Hope this helps!

Terry S. Smith

Scottsdale Luxury Homes

45 Year Arizona Resident

DPR Realty LLC

8341 E. Gelding Drive

Scottsdale, AZ 85260

Direct (602) 763-1858

Office (480) 994-0800

E-Fax (888) 315-2680

ScottsdaleForeclosures@Gmail.com

Http://www.ScottsdaleLenderForeclosure.com

Have a Great Day!
0 votes
Lee, Agent, Phoenix, AZ
Tue Sep 13, 2011
The very best ROI is in the $60k - $90k range, 3BR+ and the best price value is in the SW Phoenix area and the Quenn Creek/ San Tan Valley areas. Get a newer [ >2004] home to preclude excessive maintenance costs/problems. Happy to help if you need it.
0 votes
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