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Updated over 5 years ago, 07/13/2019
Arizona Investors/Natives: Come on In!!
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!
Thanks @Colleen F.!
I haven't given a ton of thought to what I'm into- I am trying to look at this as an investment than I can enjoy myself for 3-4 months a year. That said, I guess I'm asking like what are the good areas to buy a condo for 150k? Where will I maximize my value? There are areas in Columbus (Ohio) where you can get a mansion for 150k- obviously I have no desire to live there, ha!
As far as what I want to do when I'm there- just explore. My girlfriend and I love to hike and be outdoors (a huge reason we've discussed this move, as we really can't do that in the winter here), but we also like nightlife, so we don't want to go to a retirement area (which I've heard in some cases could be considered Fountain Hills).
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!
I am sure that every AZ agent is going to flock to this forum. However, here is what you need to know...
$150K will get you a handful of options in Scottsdale right now, most of them undesireable.
There are some co-ops in Old Town Scottsdale. These are a horrible investment in my opinion. You can't get rid of them. We don't really do co-ops here, so to have them, people reject them and then they just sit on the market. PLUS, they have an owner occupied requirement. Stay away.
Some old town condos/TH have exxtremely HIGH HOAs. So, the cost of entry is tempting, but even when paid for, the HOA is way out of control, removing it from consideration as an investor (in my book).
I live in North Scottsdale. This is where alot of the action happens (Phx Open is going on right now....it's crazy here), we just finished Barret Jackson. There is nothing here in that price range unless you would take a 1 bedroom, and even then, it would be closer to $175K (and you don't want a 1 bedroom. Those are hard to sell/rent out too).
IF you can come up in price to $200K, that will open up the opportunities considerably for the immediately surrounding areas. There is a special area that has a Scottsdale address, but is actually city of Phx services. This is the best of both worlds. $200K will get you something decent there.
Also, if you are willing to follow along the 101 further West into North Phx, there are some great opportunities there that would also be good rentals. The opportunities open considerably the further West you go, or South.
AirBNB is not the best choice in my opinion because you would be living there during the hottest BNB times, so finding a short term renter would be your best bet, OR renting out other rooms.
In terms of hiking and so forth, we have mountains and parks EVERYWHERE. So, finding a place to explore is not difficult.
BTW, it's nice and sunny today...about 79 degrees. :)
Originally posted by @Wes Blackwell:
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!
Don't forget Geminis Wes! These are an awesome niche (best kept secret), but offer a great opportunity to people shopping for condos. Geminis are like duplexes, but each side is individually owned. They come with a private carport or garage, yard and have no one above or below. They just share a common wall.
There are many of these around the valley...most that don't have an HOA, or very small one, if any. They should be included in any search for people shopping for condos.
So true. Totally forgot about those. That could definitely work for him too.
Although, because there's no HOA, just make sure the other half doesn't decide to paint their property a different color.
Came across this "gem" of a Gemini once on my travels:
Wow- this is some awesome info. Thanks so much everyone!
I actually spoke to my Columbus-based lender last night and he indicated I'm easily good for up to 200k, and since it's a second residence, I only have to put 5%- score. So, that appears to open up my search much more. It looks like based on the feedback above, Scottsdale and Tempe are my 2 targets. I'd personally prefer Scottsdale as it seems to be an easy transition from Columbus.
PS: today was 11 degrees driving into work. :)
Originally posted by @Brad Clarizio:
Wow- this is some awesome info. Thanks so much everyone!
I actually spoke to my Columbus-based lender last night and he indicated I'm easily good for up to 200k, and since it's a second residence, I only have to put 5%- score. So, that appears to open up my search much more. It looks like based on the feedback above, Scottsdale and Tempe are my 2 targets. I'd personally prefer Scottsdale as it seems to be an easy transition from Columbus.
PS: today was 11 degrees driving into work. :)
Parts of Tempe are great! Alot of new infastructure has developed over there. Just keep in mind when you consider a short term rental that ASU continues to defend their title year after year for the nation's best party school. lol. Go Devils!!
Woke up this morning and it was a little nippy.. 48 degrees. But by noon, it will be in the 70s. Are you jealous?! :)
Funny story....yesterday, I was driving by the Phx Open (technically Waste Management Open, but whatever) and there was a guy spinning around a sign from another Realtor that read...."It's cold where you live, You could Live HERE. Call Mike the Realtor." It made me think of your situation.
Glad to hear you are working with a Lender. Will he be able to do the loan in AZ? Many lenders only have licenses in certain states. If you need an AZ lender referral, let me know. I have a really good one that I work with.
Happy to help if you would like. Just reach out.
Originally posted by @Cara Lonsdale:
Originally posted by @Brad Clarizio:
Wow- this is some awesome info. Thanks so much everyone!
I actually spoke to my Columbus-based lender last night and he indicated I'm easily good for up to 200k, and since it's a second residence, I only have to put 5%- score. So, that appears to open up my search much more. It looks like based on the feedback above, Scottsdale and Tempe are my 2 targets. I'd personally prefer Scottsdale as it seems to be an easy transition from Columbus.
PS: today was 11 degrees driving into work. :)
Parts of Tempe are great! Alot of new infastructure has developed over there. Just keep in mind when you consider a short term rental that ASU continues to defend their title year after year for the nation's best party school. lol. Go Devils!!
Woke up this morning and it was a little nippy.. 48 degrees. But by noon, it will be in the 70s. Are you jealous?! :)
Funny story....yesterday, I was driving by the Phx Open (technically Waste Management Open, but whatever) and there was a guy spinning around a sign from another Realtor that read...."It's cold where you live, You could Live HERE. Call Mike the Realtor." It made me think of your situation.
Glad to hear you are working with a Lender. Will he be able to do the loan in AZ? Many lenders only have licenses in certain states. If you need an AZ lender referral, let me know. I have a really good one that I work with.
Happy to help if you would like. Just reach out.
Ha-yes, I actually am jealous. We are due for 2" of snow on Sunday and 8" on Tuesday. I looked at Scottsdale's weather for the next 10 days and it hurt my heart knowing I'd be in this frozen tundra. That realtor has the right idea for sure.
I'm hoping that by opening up my search to 200k, I can get something that would fit me- I'm 28 with a girlfriend and live in a very "hip" area of Columbus (think old school bars, trendy food, etc.). Is there an area of Scottsdale like that? Honestly, the reason I'm doing a condo for 4 months a year is to see if Arizona is a state I want to live in long term. I just don't want to go all in (and turn my properties over to someone) only to come crawling back to Columbus.
Yep- my lender is licensed in Arizona. First thing I checked :)
low 80’s all this week, and we are 10 minutes to the Algodones border crossing, catered to winter visitors.
lol....Yuma....lol. I can't stop laughing.
@Brad Clarizio There are many pockets around the valley that have what you mention.
Tempe will be the old school bars where you can walk/stumble from one to the other. Tempe Town Lake is AWESOME. They do all kinds of events there, have Dragon Boat racing festivals twice a year, have an awesome 4th of July and New Years events where they close the streets and have all the bars open, and street vendors out. It's a blast (and a madhouse). Tempe is a place where you can wear your tee-shirt and flip flops and fit right in. There is also Tempe Marketplace not too far away that is a HUGE open mall where you can walk outside and around. There are some bars there, but mostly restaurants, shopping, a movie theater and so forth.
Old Town Scottsdale has alot of culture. There are art shops and unique 1 location type shops down there. They also have bars and clubs that you can walk from one to the other. The Scottsdale Waterfront is nice. It's basically a huge canal that runs behind the Scottsdale Fashion Square mall, which has really been remodeled over the past 10 years or so. Lots of restaurants,3 story indoor mall, and fully remodeled theater.
North Scottsdale has a combo of places. Kierland was one of the first master planned communities in the valley. It is a huge open mall-like area with restaurants, and shops. Scottsdale Quarter is the newest add-on, and it sits just right across the street from Kierland, making this area a HOT spot on the weekends. Plenty to do here. There's even an Apple store.
As mentioned before, North Scottsdale is also where big events happen like Barret Jackson, Phx Open, Arabian Horse Show, and so forth.
Also, while I wouldn't suggest living there, there is a CUTE little town that you can explore not too far away from North Scottsdale. It's the Cave Creek/Carefree area. Some great local breweries and eateries. Plus, it's nestled at the edge of the mountains, so you get a real feel up there. There are a few country bars that do line dancing and so forth. Something worth checking out.
Just to give you an idea of what is available, the pix below are out of a condo listed for $200K. It's a 2 bed/ 2 bath with a $217/mo HOA. It would put you just under 2 miles away from Kierland/Scottsdale Quarter.
I can relate with Cara's first post when the budget goes to 200k as that is what I had to do. I moved from WI and I definitely understand why you are looking to move ha!
As Cara said, though, North Scottsdale is super happening. I used to live there as well, I rented an apartment and loved it. No condo in the area was in my price range. I upped it to 200k and found a condo near Desert Ridge Marketplace for 195k 3bed 2.5 baths 1600 sq ft. Now I rent the other 2 beds to chop up my mortgage. Its a great opportunity for me but I am also single with no kids so roommate are an option... But to the point, I am 10 mins from North Scottsdale and the cost of entry was considerably less just because I bought in Phoenix.
Good luck!
First, pick an area that you want to be in. I've lived all over, from North Scottsdale, Old Town Scottsdale, to South Chandler. When we decided to buy, we chose the Arcadia area of Phoenix. We like that it's in the middle of everything, and it doesn't look like you live in the desert. Everyone actually has grass. If you're after a hipster neighborhood, parts of Arcadia Lite could work, Uptown and Midtown Phoenix are the most well known hipster locations, and then downtown Phoenix has some hipster pockets, too.
Second, if you're going to be living here during the best months of the year, and trying to rent it the rest if the year, it doesn't really matter where the snow birds like to stay out here. You have to rent to the type of person that travels here the rest of the year. Your best option is mid duration Airbnb tenants. Likely 30-90 days at a time. This will significantly cut down on your property management and cleaning fees. When we were doing Airbnb, we noticed that this tenant profile was mostly students doing clinical rotations for a month or two. So, whatever area you choose, I would go next to the hospitals in that area.
If you want to meet up while you're out here in May, feel free to PM me.
Lots of agents have given good advice here but in the end, its what your eyes see. Lots of action everywhere in Phoenix but yes Scottsdale is a lifestyle area, I cant seem to leave the old town area with all its charm :)
@Brad Clarizio I think the lesson everyone can learn from this is how to properly title a post to get the most local Realtors to respond 😄
1) Definitely visit Phoenix if you've never been here before. I'd visit both in Fall/Winter/Spring (Nov-April), when the weather is perfect, as well as the peak part of Summer (July/August/September) when it's scorching hot. I know your plan is to live here during the good weather, but you never know how your plans/living situation could change and you may end up staying through a summer as well! Consider this your basic due diligence.
2) $150,000 is a nice budget for a condo in the Phoenix market at large, although it won't go as far in higher cost cities like Scottsdale or Fountain Hills. Nicer 2 bed / 2 bath condos in Scottsdale are now selling for around $250k-$260k or more.
3) You'd obviously be living in the condo during the high season rental months, and then trying to rent it during the slower summer months. Great for your lifestyle, but not ideal for cashflow! I wouldn't count on AirBnb/VRBO bookings during summer to cover your costs - rather, I'd suggest you try to rent your furnished condo for the whole summer to one tenant if possible.
I sincerely appreciate everyone's input here- lots to think about. A trip is definitely being planned, as I certainly wouldn't ever think to buy a property in a city I've never been to.
Ryan- great points. While extra income will be nice, me buying a place isn't dependent on it. The reason I am targeting 200k or less is because without any extra income, I can still safely fit this into my current financial situation. So any additional income is just that- additional.
Is anyone aware of companies that deal with managing a short term rental? Again, if I'm targeting December though March or April, I would want it to be available April-October. I don't even care if I rent it out for $500 a month, I just don't want it sitting empty. I'm sure it would attract some nice attention if it were in a good area of Scottsdale and I was only asking $50 a night on AirBnb. Who knows! :)
Hey @Brad Clarizio just curious which direction you went. I have a STR in Scottsdale that I convert to a longer-term rental to cover the summer months, so I can vouch for your strategy on that front. I'm happy that the 4-month guest covers expenses and cuts down on management time and expenses.
Hopefully you found a great property and you're having success!