Arizona Investors/Natives: Come on In!!

[Brad Clarizio]

Hey everyone,

I am currently an investor in Columbus, OH (where I am born and raised, and currently living). In the last few months, I've gotten this wicked urge to get the heck out of Ohio- at least for 3-5 months during the winter. 28 years of gray, dreary skies is taking it's toll :).

My role at my full time job is one that, luckily, allows me to work from home or remotely if needed. As the wheels are turning, I've decided (at least I think) to be a snow bird, starting next winter. Arizona has always been a state on my radar, and as it's the sunniest state in the US and doesn't participate in Daylight Savings Time, I think it's the state I've chosen to "bird" to. 

So why I am here:

1) My budget is approximately $150,000, and ideally, I'd like to buy a condo. I own 12 properties here in Columbus and I'm lucky enough to be in a position to finance this condo with 20% down, so I've allocated 30-35k for a down payment. 

2) I have never visited Arizona, but am planning a trip in May. 1 day of the trip will be allocated to checking out real estate, and ultimately seeing what my budget will get me. What are the areas I MUST see? I would like to stay around Scottsdale, and I've taken a liking to Fountain Hills.

3) To play off the point above, what is going to be my rest return for AirBnB'ing this place the rest of the year? I am looking to live here from December-April, so from May-November, what area is best to get at least my mortgage ($600-700) covered per month? Is Fountain Hills going to attract 10 nights worth of stays at $70 each? Or is there another area that's better?

4) What should I absolutely know about Arizona? And, am I bat-crap crazy? 

Thanks for all your input! 

[Wes Blackwell]

@Brad Clarizio

I work with a lot of investors coming here from out of state. 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. 

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. All about resort lifestyle living here... fine dining, shopping, golf, tennis, you name it. 

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 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.

...

But here is the bigger thing to consider... it's slim pickings in your price point. Here is a map of all available condos priced $150k or less:

But, if you throw in Townhomes, you get waaaaaaay more results:

So don't rule those out. Far better to have more options than less.

As for recommendations, here are the top  four areas to consider:

#1) Scottsdale - it's built around the resort lifestyle, and this is where all the well-to-do snowbirds come during the winter to play golf, tennis, and go swimming.  Downtown area would be great for AirBnb because it's a bit of a hotspot for travel.

#2) Tempe - near ASU. You could rent to students, teachers, university staff, you name it. Would work well with short term rentals too because it fits with the school schedule and it would be easier to make it vacant for when you want to be in town.

#3) Central Phoenix - simply because it's centrally located. Great for anyone here on business. You're 30 minutes from everywhere.

#4) Glendale - near the Cardinals stadium. All kinds of events always going on out here. If another Superbowl is played here and you're close by, be prepared to make $10k in a week.

Information overload, but I hope this helps!