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Phoenix rental market

shintoooo

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Any Phoenix realtors here? How is the rental market for let’s say a 3+2 1500sq ft house? What are the best areas as far as safe neighborhoods and good schools etc...? Looking to pick up a rental or two and any information is appreciated.
 

motormonkey

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Suprise Az is going to be a up and commer I've heard.
 

LargeOrangeFont

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It's a pretty hot market right now. I can't get lots ready fast enough to go vertical. I wouldn't buy investment property in the PHX area right now, I would wait for the slow down.


This. I can find better returns for less outlay in other parts of the country.
 

EBT531

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With 20% down you are lucky to cover costs. Depending on the area, they pull $1200-1400 month. I have a great realtor if you need one who does investment properties, will find tenants for you and has a side company that does remodel/handyman work if needed.
 

shintoooo

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It's a pretty hot market right now. I can't get lots ready fast enough to go vertical. I wouldn't buy investment property in the PHX area right now, I would wait for the slow down.

I’ve been hearing the market will slowdown since 2015. I’m looking long term. Not looking for appreciation. Just want long term rental properties.
 

shintoooo

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With 20% down you are lucky to cover costs. Depending on the area, they pull $1200-1400 month. I have a great realtor if you need one who does investment properties, will find tenants for you and has a side company that does remodel/handyman work if needed.

Thanks. I’m okay with just covering the costs. Not looking for immediate cash flow.

From what I’ve seen in Phoenix, you will cover the costs and it’s a growing city and state in general with all the people moving from
CA. People move to Phoenix or Arizona because it’s still closer to family in CA compared with other states.
 

boatpi

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FYI ; in Vegas spend 275k or so and u get a 2100 house and large lot that brings in $1,550, and increasing. Taxes
Are $1,600 per year, Hoa $60 month.

and this house is in a gated area of north Las Vegas near the VA hospital, built in 2005. Great rental area, I own 2 in this area.
 
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shintoooo

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FYI ; in Vegas spend 275k or so and u get a 2100 house and large lot that brings in $1,550, and increasing. Taxes
Are $1,600 per year, Hoa $60 month.

I’m looking there as well. Please give me some more information. What areas are you using as an example?
 

LargeOrangeFont

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I’ve been hearing the market will slowdown since 2015. I’m looking long term. Not looking for appreciation. Just want long term rental properties.

You can buy 2-3 midwest properties with the same down payment you'd use for a Phoenix property, have them managed and bring more income with less risk (more doors for the money or less overall cost) vs. the southwest market. I'm looking at picking up 2-4 properties this year and in the same position as you, I don't care about the appreciation. I can make my $30k (20%) down payment investment back per house in less than 8 years (conservatively), with way less out of pocket per house.
 

shintoooo

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You can buy 2-3 midwest properties with the same down payment you'd use for a Phoenix property, have them managed and bring more income with less risk (more doors for the money or less overall cost) vs. the southwest market. I'm looking at picking up 2-4 properties this year and in the same position as you, I don't care about the appreciation. I can make my 20% down payment investment back per house in less than 8 years, with way less out of pocket per house.

Good info. I’ll be using property manager as well so it doesn’t matter where the property is located. Where are you looking?

I’m also looking at San Antonio.
 

LargeOrangeFont

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Good info. I’ll be using property manager as well so it doesn’t matter where the property is located. Where are you looking?

I’m also looking at San Antonio.

Idaho, Indianapolis, Tennessee right now, I'm still doing diligence, but the magic formula is Monthly Rents= 1% of home value. I'm looking for markets where that exists first, and then employment data, and other factors for those areas. Home values are pretty stagnant in these markets, so you'll never make anything on appreciation. I just view it as building an annuity portfolio.

I have some more homework to do, but if you want to bounce ideas off or share info, I'm down. I'm really trying to push myself out of my comfort zone by not staying local.
 

boatpi

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Pm me for details look at zip 89081 Tropical and Pecos road. Google tamarack lodge lane look around.
 

Nordie

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Pm me for details look at zip 89081 Tropical and Pecos road. Google tamarack lodge lane look around.

There is one big perk for that area, a lot of military live in that area, as it's relatively close to the base. It is also growing like crazy. I won't disclose the bad about that area though.
 

boatpi

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D093BC5C-593C-4C66-BD14-5063CA63051C.png
When one comes On the market you want the 2,065 square foot model 3 br, 2 1/4 bath, has 3 car garages, downstairs den that you can close off to add a 4th bedroom$$$. Huge lots some over 8,000, strong Hoa but not abusive. Neat neighborhood and some of the largest lots in the area.
 

boatpi

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Nordie is correct many military, too bad you guys missed it all during the Obama depression (2010-2913) they went for $105-$114K :).
 

boatpi

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Btw; I
Like mixed racial areas for income
Property, this tract Sundance Shadows has all races including Asians. I will have a vacancy in a Month or two and get volumes of applicants.

Super strong rental area, schools not the best but it’s about the money. I had 7 houses in Vegas like other board members, sold 2 to buy my palace in sw vegas.
 

Motor Boater

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I have a 3 bed 2.5 bath 1900 sq ft rental in Phoenix. It’s in a 13,000 sq ft lot with a pool in a decent neighborhood. Rents for $2100 a month.
 

Flying_Lavey

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I'd guess you could do pretty well here in Tucson too. Stay out of the middle of the city and the rentals fetch good money. Hard to find a 3+2 over 1200 sq ft for less than $1500/month. A 4 bed is usually up around $1800+ in the good school areas (Vail school district is number #1 or 2 in the state). Also with the Air Force Base here there is just about always a good base of renters.

Sent from my LM-G710VM using Tapatalk
 

mesquito_creek

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Paying cash for a rental condo in the highly desirable area of Tempe/Chandler/Gilbert in late 2018,... after taxes, maintenance, HOA, equity... net me ~14% in revenue...

Compared to my investments in S&P index fund which net me 30%....

So I lost money in 2019 on rental property in AZ....
 
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lakemadness

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Paying cash for a rental condo in the highly desirable area of Tempe/Chandler/Gilbert in late 2018,... after taxes, maintenance, HOA, equity... net me ~14% in revenue...

Compared to my investments in S&P index fund which net me 30%....

So I lost money in 2019 on rental property in AZ....

Why did you keep all cash in the deal. Money is cheap. Slap loan on that thing and keep your cash to work for you elsewhere. Also, most HOA's kill any cash flow. For the most part condos aren't really worth a damn as far as rentals go.
 

mesquito_creek

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Why did you keep all cash in the deal. Money is cheap. Slap loan on that thing and keep your cash to work for you elsewhere. Also, most HOA's kill any cash flow. For the most part condos aren't really worth a damn as far as rentals go.

Because I hate mortgage fees and the hassles that go with it and you would have to bake that into your costs.... Assuming 4-5% rates on second/investment properties and the new tax laws, it would have just killed my return to less than 10%. And I am a simpleton and have a rule that I make interest I don't pay interest... I was looking for diversification of my portfolio begrudgingly adding real estate even knowing that it never out performs equities. I had the cash, needed to diversify it and I didn't need middle men taking part of it.

I understand that condos don't outperform single family, but for ease of ownership, cost and the location I wanted to be in, it made sense to me.

I also sleep really good at night knowing that no matter what happens my carrying costs are about 200 a month for HOA/Taxes and nothing else...

Shintoo asked about rental property in the Phoenix market and I provided a real world example funded 100% with my money...

I also sleep really good at night knowing my carrying costs are ~200 a month for hoa/taxes regardless of anything that happens to the economy or my renters...
 

J&k beer can

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Phoenix market is hot..
Just check your areas good..
We like doing rentals and make it work for us..
You have rental properties depreciation you can write off..
Plus its amazing how you need to buy stuff(write off) for the rentals all time..
;);)
P.s. it dont even need to be a money maker if you do it right..tax wise..
 

LargeOrangeFont

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Why did you keep all cash in the deal. Money is cheap. Slap loan on that thing and keep your cash to work for you elsewhere. Also, most HOA's kill any cash flow. For the most part condos aren't really worth a damn as far as rentals go.

Do you manage property for other people, or just handle your own? Or do you have a management company you use?
 

Cdog

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Paying cash for a rental condo in the highly desirable area of Tempe/Chandler/Gilbert in late 2018,... after taxes, maintenance, HOA, equity... net me ~14% in revenue...

Compared to my investments in S&P index fund which net me 30%....

So I lost money in 2019 on rental property in AZ....

Probably gained 8-12% equity since 2018 right?
 
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Cdog

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Supply is at the lowest in 16 years here in Phx. The equity play is where it’s at right now. Invest with the intent to sell in 3-5 years and exchange into multi family.
 

white tortilla

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I have a rental about 3 blocks from ASU main campus in Tempe. Bought in 2010 for the price of a new Suburban and fixed it up and lived in it while I went to ASU. It’s doubled in value since then so looking at current value I was able to go to school and board for free. Now it rents for $1500 a month. It’s 3 bed / 2 bath with pool. All of the area is easily kept rented with students or young professionals who want to be in that part of town. 5 min to airport, 2 min to Mill Ave, 10 min to old town Scottsdale, 10 min to center of downtown. If u can find a decent deal it’s a no brainer. One of biggest schools in country and almost dead center of greater Phoenix area.

For reference its main cross street is University/Hardy.
 

shintoooo

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I have a rental about 3 blocks from ASU main campus in Tempe. Bought in 2010 for the price of a new Suburban and fixed it up and lived in it while I went to ASU. It’s doubled in value since then so looking at current value I was able to go to school and board for free. Now it rents for $1500 a month. It’s 3 bed / 2 bath with pool. All of the area is easily kept rented with students or young professionals who want to be in that part of town. 5 min to airport, 2 min to Mill Ave, 10 min to old town Scottsdale, 10 min to center of downtown. If u can find a decent deal it’s a no brainer. One of biggest schools in country and almost dead center of greater Phoenix area.

For reference its main cross street is University/Hardy.


Do you have issues with students trashing the place?
 

mesquito_creek

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Probably gained 8-12% equity since 2018 right?

I would estimate about 9%... without figuring in RE Commissions if I had to liquidate... RE commissions would really take a hit out of my opportunity costs, but my business plan has it in my portfolio for a minimum of 3 years....
 

mesquito_creek

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I have a rental about 3 blocks from ASU main campus in Tempe. Bought in 2010 for the price of a new Suburban and fixed it up and lived in it while I went to ASU. It’s doubled in value since then so looking at current value I was able to go to school and board for free. Now it rents for $1500 a month. It’s 3 bed / 2 bath with pool. All of the area is easily kept rented with students or young professionals who want to be in that part of town. 5 min to airport, 2 min to Mill Ave, 10 min to old town Scottsdale, 10 min to center of downtown. If u can find a decent deal it’s a no brainer. One of biggest schools in country and almost dead center of greater Phoenix area.

For reference its main cross street is University/Hardy.

I would have bought that house just to be walking distance from the Cornish Pasty and Casey Moore's...
 

white tortilla

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Do you have issues with students trashing the place?

Not particularly. But I have been lucky it has had a couple people I knew that were going to ASU rent it, and typically I would aim for more a graduate student or young professional. I know I can’t discriminate but if it was Brad/Chad/Kyle all 20 yo trying to co-sign and lease I’d probably make sure there is a healthy enough security deposit to make them think twice. The house is simple laminate floors corian countertops so worst case I’d be repairing drywall damage. Yard is all gravel and trees and pool maintenance is figured in rent so there’s no expected upkeep.
 

mesquito_creek

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My daughter rents a house near U of A.... the lease agreement is draconian. They wouldn't let either my wife or I Co-Sign independently without the other spouse signing off... Its also a money grab because they charged all 3 of us for an application Fee. So for the 4 girls renting they collected about 12 75 dollar application fees.
 
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lakemadness

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Do you manage property for other people, or just handle your own? Or do you have a management company you use?

My residential I have a property management company handle. I’ve tried it and quickly found its not for me. I pay 10% of rent. Never get a phone call from tenants, they don’t know who I am. I just approve repair requests via email as they come in. Tenants are screened, they collect rent and evict if needed. IMO well worth 10%.

I manage some larger commercial, but have some employees doing most of the work. Different game. Residential tenants are a pain in the ass.
 

lakemadness

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Because I hate mortgage fees and the hassles that go with it and you would have to bake that into your costs.... Assuming 4-5% rates on second/investment properties and the new tax laws, it would have just killed my return to less than 10%. And I am a simpleton and have a rule that I make interest I don't pay interest... I was looking for diversification of my portfolio begrudgingly adding real estate even knowing that it never out performs equities. I had the cash, needed to diversify it and I didn't need middle men taking part of it.

I understand that condos don't outperform single family, but for ease of ownership, cost and the location I wanted to be in, it made sense to me.

I also sleep really good at night knowing that no matter what happens my carrying costs are about 200 a month for HOA/Taxes and nothing else...

Shintoo asked about rental property in the Phoenix market and I provided a real world example funded 100% with my money...

I also sleep really good at night knowing my carrying costs are ~200 a month for hoa/taxes regardless of anything that happens to the economy or my renters...

Right on, if we all had the same strategy no one would make anything!
 

lbhsbz

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My residential I have a property management company handle. I’ve tried it and quickly found its not for me. I pay 10% of rent. Never get a phone call from tenants, they don’t know who I am. I just approve repair requests via email as they come in. Tenants are screened, they collect rent and evict if needed. IMO well worth 10%.

I manage some larger commercial, but have some employees doing most of the work. Different game. Residential tenants are a pain in the ass.

is 10% the norm? That seems excessive. That's more than a full months rent per year. I'm a 2nd year landlord and aside from figuring out taxes, I've invested a grand total of about an hour and a half in "managing" my rental since I received the deposit check.
 

lakemadness

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is 10% the norm? That seems excessive. That's more than a full months rent per year. I'm a 2nd year landlord and aside from figuring out taxes, I've invested a grand total of about an hour and a half in "managing" my rental since I received the deposit check.

It’s the going rate around here.

You’re on a good run. We have multiple properties. It’s not always a pain, but when it is I have better shit to do than dick around with it. I think it’s a fair price to pay so the tenant doesn’t bug me at any hour of the day or night.

I wouldn’t do it for 10%.
 

boatpi

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Problem with rental agency, more so in first year, IF you show a loss on paper, you CANNOT take the loss below zero. IF you are an "Active" property manager then you can.
 
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