Arizona Out of State Investment

[Fernando E.]

Hi Bigger pockets crew I'm from the Bay Area and considering to invest out of state. I wanted to get insight from you folks about investing in Arizona, I'm targeting multi family and plan to work with a reputable property management co. Do you guys have any suggestions on best place in Arizona to invest and any recommendations for a great property management company? Any insight, experience and wisdom is much appreciated!

[Wes Blackwell]

@Fernando E.

I work with a lot of investors coming here from multifamily, usually from appreciation states like CA where cash flow is tight. Here is a general breakdown of each of the major areas:

Apache Junction

Apache Junction is a small little town out of the far, far east side of the Phoenix Metro Area. It only has a population of roughly 35,000 and definitely has a small-town feel. Lots of mom and pop shops and small local businesses. It’s a lower income area, where the median income is $36,771 compared to Phoenix’s $43,960.

I question how much this area will grow into the future, since it’s just such a small town. It only gains about 1,000 people per year on average. Small towns like to remain small towns, and not many millennials will make this their choice when moving to the area

Chandler / Gilbert

Chandler and Gilbert are located far south off the 202. If you’re going to live in the southeast valley, this is the place I think you should be. Both areas are known for their schools. Chandler is a more diverse and younger, and is located near Intel’s facility where they plan to bring 3,000 high paying tech jobs into the area… those employees will need housing. Gilbert is more homogenous, and largely Mormon. It’s probably best known for being the #2 safest town in America for its size. 

Mesa

Mesa is more of a mixed bag… on the far west side close to the 101 it’s a bit of a ghetto and there’s lots of crime, same goes for much of south mesa. But in east mesa it’s a different story, and that’s where I would try to buy. The area is HUGE and seems to go on forever eastwards, and the area is full of people who commute back in the central PHX area for work. So in a sense, it’s a commuter town for a lot of people. 

Tempe

Being so close to ASU, there’s a good chance at least half of your tenants will be students. Especially if you’re within walking or biking distance. This has it’s pros and cons… as you’ll have higher turnover than average, but the units will be very easy to fill too. Another potential option is buying two larger homes here (5+ bedrooms) and renting them out to fraternities, sororities, or the sports teams. I have a client in Stockton successfully doing that near UOP.

Scottsdale

In general, this is the nicest area in the Phoenix Metro. It’s broken up into two parts, north and south. The south side is older and has a lot of old town charm, and the north part is newer and mostly built around all the resorts and golf courses. Not too much multifamily though... but there is some. Although to get into the nicer parts your budget would probably have to be bigger. 

Glendale

Glendale is a little rougher of an area… but it’s not too bad if you can find something out closer to the Cardinals Stadium. A lot of gentrification is happening in that area, and being roughly $20k below the median sales price for the Phoenix Metro area it has more room to grow since it’s so affordable. But, Glendale is general has a lot of crime, so it’s kind of like Stockton where you have to carefully analyze the deal on a street by street basis. Buyer beware.

Phoenix

Being located in the heart of the metro area, this is probably where you’re going to end up. If for no other reason than it has the widest selection in your price range. You’re close to freeways, downtown, the airport, and in the middle of everywhere. So it’s not like Chandler or Gilbert where you’re completely on one side of town. You’re more likely to find properties in the upper end of your price range that have already been renovated, so you can buy something turnkey or at least see the potential.

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Hope that gives you enough info for the basic rundown! If you have any more questions just ask and we'll try to point you in the right direction :-)