Raleigh Vs Phoenix for rental property

[Yinan Dong]

Hi I am in California and considering out of state investment opportunities. Mainly focusing on buy and hold of rental properties and aiming for long term appreciation and some cash flow. After some research I have put my focus on these 2 market: 1. Raleigh, NC 2. Phoenix, AZ. My reason:

1. Both have very strong population growth and very diversified economy(I like city with diversified economy instead of single type like Vegas or Orlando). Also local law are more landlord friendly.

2. Home price are still low compared to CA and both have low property tax rate. Cash flow can at least break even the operation cost, with about 5% cap rate for SFH.

Phoenix is very popular and has much higher appreciation rate in the past 10 years(150% up compared to 60% in Raleigh), but its price dropped by 70% in 2008(not sure the reason), compared to Raleigh only dropped by about 15%. 

Raleigh area has much more high tech companies in the RTP and Apple is coming in the next few years, seems to be a safer choice.  

Can you share your opinion about these 2 cities for buying rental properties? If you want to recommend other better option please feel free to share. Thanks