Queen Creek/San Tan Valley/Other areas similar?

Question

Hello to the Valley of the Sun Crowd! I am looking for input on these areas. Prices appear very good. Is this a better and viable buy and hold area? Flip area? How do people feel about commuting from these areas? Any other outlying areas that look good? Growth for these areas? San Tan and Queens Creek don't seem to far of a commute compared to other Metro areas. Retirement areas? Thank you for all and any input.

Dylan Vargas · Answer

@Doug McVinua @Christopher Farwell Thank you to both of you. Good to hear about this area.

Christopher Farwell · Answer

I think the tenants you will find out in the San Tan Valley want to love out here because the quality of the schools is higher than other parts of the valley.  Generally speaking, people live in that part because they want to be away from the hassles of Phoenix, with lower crime as well.  It is not too far to commute if you want based on the culture here in AZ, but there are employment opportunities in the San Tan area without having to commute.

Doug McVinua · Answer

@Dylan Vargas I manage multiple properties in San Tan Valley and have found the results to be very positive. We have very low vacancy, rents have increased consistently and we also have had a high renewal rate on properties.

You do want to be a little careful as parts of San Tan Valley are less desirable, primarily due to commute times at the present time. Plans exist for significant road construction that will be changing the commute time in the not too distant future so depending on your aversion to short-term risk we could expand a little betting on the road construction.

We have been able to find some great 3/2 and also 4/2's that rent really well, are newer properties with low maintenance. I agree above and stay away from the huge sq ft as they just aren't going to perform as well given the higher acquisition cost for rentals however if you want to flip some of the larger ones may offer the margins needed.

Dylan Vargas · Answer

@Randy K. @Matthew Rogers Thank you guys! I lived and commuted in Las Angeles years ago and Sacramento. I think San Tan is not far and homes go for $150 for a very nice home. Queen Creek as well. Randy that is good to hear about the commuters. I will be heading down soon to view the area and properties as my Son lives in San Tan Valley.

Matthew Rogers · Answer

I think @Randy K. is correct about the suburbs of the Metro Area. The thing that is interesting when looking at these homes further out is not only they are cheaper but they tend to be much newer and huge in square feet. Since they are so large it scares me to have a bunch of single family homes that are 3,500 SF as there is so much more to destroy if you get the wrong tenant, not to mention Cap X will be higher in general.

Also as Randy mentioned, your tenant quality may not be great, which also brings on additional risk. From my perspective I wouldn't go out of the way to purchase something that far out unless the ROI was over 15% including a leasing agent and an adjusted cap X retaliative to home size. If I found something in Phoenix with a 12% ROI I would buy it all day long compared to one of those other markets.

Randy K. · Answer

Being a commuter myself, and knowing a considerable number of commuters first-hand, I'd definitely say many people are comfortable commuting to the Phoenix area from the outer cities, and vice-versa in some cases. I personally commute from Casa Grande to Tempe (approximately 45 miles one way), and I can name 10 coworkers just off the top of my head that commute 25 miles or more one way. Four from Maricopa, two from San Tan Valley, one from north Glendale, one from Litchfield Park, one from Avondale, and even one from Superior (nearly 60 miles one way). Since a fair number of employers in the Greater Phoenix area use a compressed work week, people seem more apt to commute further if they only have to make the drive three or four days each week.In terms of pricing, properties in Pinal county (Casa Grande, Maricopa [city], San Tan Valley, Coolidge, etc.) are generally cheaper than comparable properties in Maricopa county, for better or worse. That trend may or may not be reflected by tenant quality (for B&H) or speed and profit of sale (for flips/wholesaling).Growth wise, I'd have to give the nod to Maricopa county, at least economically. Rumors abound of new employment coming to the Casa Grande area (namely PhoenixMart, Lucid Motors, Attesa Motorsports, and Dreamport Villages), but I'm rather skeptical of the claims. Not to say the economy in Pinal county is bad, it's just not on the same level as Maricopa county. Things down here seem to move at a more ...relaxed pace, haha.Retirement areas can be found all around, though Sun City (NW of Phoenix) and Sun Lakes (SE of Phoenix) stand out in my mind. Really though, there are loads of "Active Adult" 55+ communities scattered throughout the area, both mobile home park and the SFH variety.Aside from the Phoenix area, it might not hurt to look into the Tucson market as well, depending on what your goals are. Perhaps someone more knowledgeable on that area will chime in.