New to Phoenix and hearing a lot of places for rental investments but trying to figure out from the pro's around to find what are the areas that can break-even on a monthly basis and the areas that can show appreciation in the nearer term. planning to put down payment of 30% (~100k)
@Josh Young - Are there opportunities to buy new builds for investors? Whats your opinion on Mesa? Do you generally buy new build or old homes for rental purposes
Not all new build communities sell to investors, but some/most do. Things to consider when buying a new build are appliances, fans, blinds, and back yard landscaping; sometimes we can get appliances included, it just depends on the situation. Back yard landscaping is usually the biggest expense at $5-6k for artificial turf and rock, but doing this sets you apart from the others. The best thing about a new build is the capital expenses and maintenance and repairs will be minimal for many years.
Mesa is a big area and can vary a lot depending on the neighborhood. I personally wouldn't buy an old home as a rental, I only buy 1980 or newer for myself, all of my properties are in the north part of Gilbert built between 1985-2003. I buy homes as a primary residence with 5% down and move into them keeping my previous as a rental and the area that I live doesn't have new builds that would work for us, otherwise I would buy a new build.
If I had $100k to buy an investment property and wanted at least break even on cash flow I would buy a new build in Casa Grande. If I didn't mind being a little negative on cash flow then I would buy in Gilbert. The cash flow that you need to achieve should be based off the rest of your portfolio and your financial situation as a whole. I personally focus more on appreciation, but if I wanted more cash flow I would definitely go to a fringe area and buy a new build rather than going to an older area and buying a cheaper property.
@Nithin Kumar with a $100k to invest you can break even or be a little positive on a new build in Casa Grande. There are other fringe areas (San Tan Valley, Maricopa, Buckeye, and Surprise) where you can almost break even too, but prices will be a little higher and rent to price ratios will not be as good. If you are looking for more appreciation and can afford to cover a few hundred dollars a month of negative cash flow then I'd recommend looking at Gilbert. I live in Gilbert and own 5 rentals here, but I also help other investors find, analyze, buy and manage properties all over the valley, and Casa Grande is a top pick from some of my other investors.
@Nithin Kumar I would evaluate North Phoenix. I have helped several investors recently acquire single family homes around the $400K price point that rent in the $2,200-$2,350 range. You get some of the strongest rent demand in the Phoenix area being closer to downtown, and then you position yourself for the upside of the growing North Phoenix economy with TSMC and other economic developments.
If you want more info, I can send you the 3-5 most recent properties my clients have purchased in the last month for you to review.
@Josh Young - Are there opportunities to buy new builds for investors? Whats your opinion on Mesa? Do you generally buy new build or old homes for rental purposes
@Josh Young - Are there opportunities to buy new builds for investors? Whats your opinion on Mesa? Do you generally buy new build or old homes for rental purposes
Not all new build communities sell to investors, but some/most do. Things to consider when buying a new build are appliances, fans, blinds, and back yard landscaping; sometimes we can get appliances included, it just depends on the situation. Back yard landscaping is usually the biggest expense at $5-6k for artificial turf and rock, but doing this sets you apart from the others. The best thing about a new build is the capital expenses and maintenance and repairs will be minimal for many years.
Mesa is a big area and can vary a lot depending on the neighborhood. I personally wouldn't buy an old home as a rental, I only buy 1980 or newer for myself, all of my properties are in the north part of Gilbert built between 1985-2003. I buy homes as a primary residence with 5% down and move into them keeping my previous as a rental and the area that I live doesn't have new builds that would work for us, otherwise I would buy a new build.
If I had $100k to buy an investment property and wanted at least break even on cash flow I would buy a new build in Casa Grande. If I didn't mind being a little negative on cash flow then I would buy in Gilbert. The cash flow that you need to achieve should be based off the rest of your portfolio and your financial situation as a whole. I personally focus more on appreciation, but if I wanted more cash flow I would definitely go to a fringe area and buy a new build rather than going to an older area and buying a cheaper property.
New to Phoenix and hearing a lot of places for rental investments but trying to figure out from the pro's around to find what are the areas that can break-even on a monthly basis and the areas that can show appreciation in the nearer term. planning to put down payment of 30% (~100k)
Hi Nithin, I live in North Phoenix myself and would recommend anything around the Paradise Valley Mall area. The mall is being completly revamped, you're about 15 min from Kierland, and right by the 51 to get you anywhere you want to go making it appealing for renters.
If you can be around there that's a great area, or if you are okay with being further out you can look in Buckey potentially or Queen Creek.
What is more important to you @Nithin Kumar...the cash flow, or the appreciation?
If you cash flow $1K per month for 36 months, and then sell with the ability to pull back your original investment, would you consider that a win?
What about having to break even, or even feed the property every month $200 for those same 36 months, but at sale, could net a $75K-$100K profit?
Above are just hypotheticals, but they bring to light the point, which is, evaluating opportunities requires apples to apples comparisons. You need properties to do that. Anyone can tell you they think there are deals out there, but ask them to show you which ones, and then evaluate it for appreciation as well as rental strength. You rarely will get both (at least not right now in this current market).
If you want to explore different opportunities within various areas of the Valley, get a seasoned investor-friendly Realtor who is competent. Start with the Arizona Department of Real Estate website and verify credentials, search licensees by entering their names. It will give you their time as a licensed professional, the education they have completed for the current renewal schedule, and any disciplinary action against them.