Zen Rent manages single-family homes, condos and townhouses in and around the Phoenix area, including in Mesa, Scottsdale, Chandler, and Gilbert. Today we’re talking to real estate investors who are considering a Phoenix investment property. Whether you’re a local investor who is just starting out with rental properties or an experienced investor exploring new regions for a growing portfolio, Phoenix offers a lot of advantages.
This city is one of the most popular and fastest growing real estate markets in the U.S. Most people don’t realize that Phoenix is the sixth largest city in the country. That means there’s a lot of opportunities. While there are a lot of great reasons to buy property here, there are also some risks – as there are with all investments.
The Good News: High Rents and Stable Tenant Pools
Rents are on the rise in Phoenix, which is a good reason to own rental property here. Depending on your mortgage and what you’ve been able to leverage, cash flow is not out of the question. Plenty of properties are available at good purchase prices, and you can translate those homes into profitable rental units with little work.
With the available properties and a lower price point for entry into the real estate market in Phoenix, it’s a far better place to buy rental homes than some of the markets on the coastal cities. You’ll get more for your money in Phoenix, and you can expect your rents to be stable and consistent.
There’s also a growing economy in Phoenix. Job growth has exploded over the last few years, leaving rental property owners with a steady pool of tenants who are earning high incomes and feeling pretty good about their financial futures.
More Good News: Diversity of Rental Properties
The supply of good rental homes is robust in Phoenix. Investors can find a single-family property in an established neighborhood or new construction in a gated community with amenities like pools, fitness centers, and playgrounds. There are also some great multi-family properties available, where investors can limit their vacancy risk and increase their cash flow options.
Demographic shifts in American renters are serving Phoenix well. A large number of renters are reaching the age of retirement, and they’re less interested in maintaining a home that they own. Renting a property is better for them, especially if they’re downsizing. The properties in and around Phoenix are also attractive to Millennial tenants who are starting families or beginning to feel more established in their careers.
Some Bad News: Real Estate Investing Does Come with Risk
The Phoenix market is not going to be right for everyone. You’ll need to take a look at your investment goals and make sure you’re in the right place. For example, if you’re more interested in short term Airbnb-types of rentals, this may not be the right place for you. The City of Phoenix has strict rules and registration requirements for those homes.
Another thing to be aware of is that there’s a lot of competition in the Phoenix investment market. Large investment firms have noticed how attractive Phoenix is for rental properties, and they’re purchasing a lot of the inventory. If you want to buy a rental home in Phoenix or the outlying suburbs, act quickly.
We never know how the real estate market is going to trend, but we’re very active in following its ups and downs; its rewards and its challenges. If you need help planning a Phoenix investment or you have any questions at all about Phoenix property management, please contact us at Zen Rent. We’d be happy to assist you.