Rental property investment - Arizona
Member since 2021 · 13 posts · 7 votes
Looking to buy a rental property in and around Phoenix area. Any suggestions or recommendations where to invest? Many companies are moving to Phoenix like TSM etc. I was talking to few of my friends and they suggested to look around North Phoenix, Desert ridge & Chandler.
Any suggestions would be highly appreciated.
The West Valley (Goodyear, Buckeye, Avondale, Litchfield Park, Surprise, Waddell) is seeing a lot of growth. If you’re looking for appreciation and more affordable entry points. The new 202 south loop has also opened up access to places like Tolleson and Laveen which have relatively quick commutes to the East Side (as opposed to the old alternative - I10/I17 during rush hour) with more bang for your buck housing-wise. Growth has been phenomenal valley-wide over the last decade and projections are saying demand will be up in The Valley for the foreseeable future, barring catastrophe.
The Phoenix basin is sitting on top of a very large underwater aquifer since it is a low point for the many mountains encircling it. The confluence of three rivers (Gilda, Salt, and Agua Fria) is near the NASCAR track in Avondale, rivers that pull meltwater down into the valley from the mountains. The rivers are dry in parts most of the time as water is stored behind manmade dams up in the mountains and released when the snow melt gives those reservoirs a surplus. Where the rivers seem to “disappear” or dry up, the river is actually running subterranean until it pops up later downriver, as I was told, and that’s why you see “pockets” of water in the riverbeds. When permits for new subdivisions are applied for, the developer has to prove a 100-year supply of water under the subdivision. Water management is of high priority for the state and local municipalities. I think our overall attitude toward water is to be conservative, trust the authorities who are in charge of managing it, be wary and keep an eye on it, but we seem to be doing alright with regard to water resources. Here is an interesting article on the topic from 2019.
Speaking of water, there is also a pipeline large enough for a VW Bug to drive down connecting downtown Phoenix with the nuclear power plant out in Tonopah (on the other side of Buckeye) and they reuse the purified waste water to cool the reactors out there. It’s the largest power producer in the nation (according to capacity factor). With a plant that large in our backyard, we’re also set up with one of the most stable grids in the nation, which is good news seeing how fast the auto industry is embracing electric automobiles.
The valley is attracting employers and industries from a wide array of fields from tech to aero to manufacturing and distribution and a lot of companies are not only expanding here, but are choosing to relocate their headquarters here. Why not? Phoenix has been a city that’s attracted retirees (Sun City opened in 1960 and is regarded as the first “active adult” community) for decades. The consistently dry climate and sun are attractive, especially after living a life with drastic weather patterns. Why not move to a place where people choose to retire to? “Arizona’s Beach” (Puerto Peñasco, Sonora, Mexico aka Rocky Point) is only about a 3.5 hour drive from Phoenix. You can be snowboarding/skiing with either a 2.5 hour drive to Snowbowl in Flagstaff or a four hour drive to the east at Sunrise Park Resort in the White Mountains. San Diego, LA, Las Vegas, and Albuquerque are all within a comfortable day’s drive. The region has a lot to offer to those who make it home.
The West Valley is growing fast with lots of economic development happening in cities like Goodyear, Buckeye etc... Are you looking for SFR or Multifamily?
@Balachandar Duraiswamy The Phoenix metro area job growth and population growth has been and looks to be exploding. The last report I heard was over 290 people per day moving to the "Valley of the Sun"
The valley is very large and spread out with lots of opportunities. Personally, I have generally focused on the SE Valley, Phoenix, Chandler, Tempe, Gilbert, Mesa, Apache Junction, Queen Creek, San Tan Valley, Florence, Coolidge, and Maricopa. That is an area I know the ins and outs well, have vendors that will service the properties, and frequent on a regular basis as an agent, a broker, and a property manager.
The east valley is seeing significant job growth on top of an already solid base. New freeways like the 24 are being built, significant chunks of dirt are being converted to rooftops in the next 5-10 years and additional freeways are also in the planning stages. Chandler and Gilbert are 2 of the highest income per capita in the State and Queen Creek has been one of the most recent favored cities. I could go on and on about how strong the area is.
Investing in the core of Chandler/Gilbert has become more challenging so a lot of the focus has been on the perimeter areas around the core. Phoenix has generally expanded concentrically so investing in the out rings has historically worked out well.
@Doug McVinua Thanks for a reply. The property value has gone up as well. Looking for a SFR with a positive cashflow.
@Balachandar Duraiswamy Maybe a phone call would be good if you are open to one? We can cover a lot of ground and get a jump start on your plans?
@Balachandar Duraiswamy The Phoenix metro area job growth and population growth has been and looks to be exploding. The last report I heard was over 290 people per day moving to the "Valley of the Sun"
The valley is very large and spread out with lots of opportunities. Personally, I have generally focused on the SE Valley, Phoenix, Chandler, Tempe, Gilbert, Mesa, Apache Junction, Queen Creek, San Tan Valley, Florence, Coolidge, and Maricopa. That is an area I know the ins and outs well, have vendors that will service the properties, and frequent on a regular basis as an agent, a broker, and a property manager.
The east valley is seeing significant job growth on top of an already solid base. New freeways like the 24 are being built, significant chunks of dirt are being converted to rooftops in the next 5-10 years and additional freeways are also in the planning stages. Chandler and Gilbert are 2 of the highest income per capita in the State and Queen Creek has been one of the most recent favored cities. I could go on and on about how strong the area is.
Investing in the core of Chandler/Gilbert has become more challenging so a lot of the focus has been on the perimeter areas around the core. Phoenix has generally expanded concentrically so investing in the out rings has historically worked out well.
Isn't Phoenix facing a severe water shortage?, not to mention it looks like 114 degrees for the weekend. How do you suspect that will play into future investing?
@Account Closed Water is a concern in Arizona, for a new subdivision to be approved by the State of Arizona Department of Real Estate 100-year water supply must be assured. Maricopa County (most of Phoenix) has typically been pretty easy. Of recent Pinal County has started to be a bit more conservative and is suggesting approvals in the future may have some challenges.
Pinal County may have hurdles in the future, this is one of the recent comments I gathered:
“If the question is whether there is property in Pinal County that can develop for more residential housing, the the answer is yes. There are over 38,000 vacant lots with assured water supply determinations in the Pinal Valley Water System. This does not even include subdivisions approved before the AWS became effective. For new residential communities, we continue to work with ADWR to identify new water supplies and utilize improving technology to provide for continued future growth.”
The West Valley (Goodyear, Buckeye, Avondale, Litchfield Park, Surprise, Waddell) is seeing a lot of growth. If you’re looking for appreciation and more affordable entry points. The new 202 south loop has also opened up access to places like Tolleson and Laveen which have relatively quick commutes to the East Side (as opposed to the old alternative - I10/I17 during rush hour) with more bang for your buck housing-wise. Growth has been phenomenal valley-wide over the last decade and projections are saying demand will be up in The Valley for the foreseeable future, barring catastrophe.
The Phoenix basin is sitting on top of a very large underwater aquifer since it is a low point for the many mountains encircling it. The confluence of three rivers (Gilda, Salt, and Agua Fria) is near the NASCAR track in Avondale, rivers that pull meltwater down into the valley from the mountains. The rivers are dry in parts most of the time as water is stored behind manmade dams up in the mountains and released when the snow melt gives those reservoirs a surplus. Where the rivers seem to “disappear” or dry up, the river is actually running subterranean until it pops up later downriver, as I was told, and that’s why you see “pockets” of water in the riverbeds. When permits for new subdivisions are applied for, the developer has to prove a 100-year supply of water under the subdivision. Water management is of high priority for the state and local municipalities. I think our overall attitude toward water is to be conservative, trust the authorities who are in charge of managing it, be wary and keep an eye on it, but we seem to be doing alright with regard to water resources. Here is an interesting article on the topic from 2019.
Speaking of water, there is also a pipeline large enough for a VW Bug to drive down connecting downtown Phoenix with the nuclear power plant out in Tonopah (on the other side of Buckeye) and they reuse the purified waste water to cool the reactors out there. It’s the largest power producer in the nation (according to capacity factor). With a plant that large in our backyard, we’re also set up with one of the most stable grids in the nation, which is good news seeing how fast the auto industry is embracing electric automobiles.
The valley is attracting employers and industries from a wide array of fields from tech to aero to manufacturing and distribution and a lot of companies are not only expanding here, but are choosing to relocate their headquarters here. Why not? Phoenix has been a city that’s attracted retirees (Sun City opened in 1960 and is regarded as the first “active adult” community) for decades. The consistently dry climate and sun are attractive, especially after living a life with drastic weather patterns. Why not move to a place where people choose to retire to? “Arizona’s Beach” (Puerto Peñasco, Sonora, Mexico aka Rocky Point) is only about a 3.5 hour drive from Phoenix. You can be snowboarding/skiing with either a 2.5 hour drive to Snowbowl in Flagstaff or a four hour drive to the east at Sunrise Park Resort in the White Mountains. San Diego, LA, Las Vegas, and Albuquerque are all within a comfortable day’s drive. The region has a lot to offer to those who make it home.
@Doug McVinua Doug, Although Phoenix still has lots of potential, however the density of investors concentration and traffic have made it a bit difficult to land a good deal. Many investors direct their attention to South Arizona, specially Pima county/Tucson. I would highly recommend doing some research on this area and see of it delivers what you want.
Hey @Balachandar Duraiswamy AZ is seeing amazing growth and appreciation is definitely the name of the game here.
I tend to focus on Tempe, Scottsdale, Chandler, Gilbert, Queen Creek, and San Tan Valley you really can’t go wrong each area they do have different price points. If you want to chat feel free to message me! Happy investing hopefully I see you around.
@Thomas Corley Thanks for a response. The prices in AZ has gone over the roof now. Any suggestions on Out of state market?
@Balachandar Duraiswamy prices definitely have!!
I invest in Columbus OH as well for more cash flow and have definitely had good success so far! It's pretty doable to get a 10% COC return were as AZ maybe 3% but you get that amazing appreciation so I try to do both! Let me know if you ever have questions on both markets!
@Balachandar Duraiswamy prices definitely have!!
I invest in Columbus OH as well for more cash flow and have definitely had good success so far! It's pretty doable to get a 10% COC return were as AZ maybe 3% but you get that amazing appreciation so I try to do both! Let me know if you ever have questions on both markets!
+1 for Columbus! I've been investing here in some capacity for 15 years. Still great areas that have upside potential (appreciation) + cash flow!
@Jonathan Pavkov Thanks for replying jonathan. Will look into it as well.
@Balachandar Duraiswamy
Have you considered placing a manufactured home or two on a one acre lot ?
Homes can be ordered and rest to move in in about 7 months. You can price out your home and development while searching for a great deal on a location. At this point in the west valley, any place near the 10 freeway is great.
There are single double and triple section homes.
300- yo to 3400 SF in size 1-6 bedrooms
@Account Closed Water is a concern in Arizona, for a new subdivision to be approved by the State of Arizona Department of Real Estate 100-year water supply must be assured. Maricopa County (most of Phoenix) has typically been pretty easy. Of recent Pinal County has started to be a bit more conservative and is suggesting approvals in the future may have some challenges.
Pinal County may have hurdles in the future, this is one of the recent comments I gathered:
“If the question is whether there is property in Pinal County that can develop for more residential housing, the the answer is yes. There are over 38,000 vacant lots with assured water supply determinations in the Pinal Valley Water System. This does not even include subdivisions approved before the AWS became effective. For new residential communities, we continue to work with ADWR to identify new water supplies and utilize improving technology to provide for continued future growth.”
This is excellent information! Thanks for sharing!
Trying reaching out to Zach Haptonstall. He and his team are killing it in AZ. https://www.biggerpockets.com/...
I'm seeing 3/2 houses in Chandler go for around $450-500K and only rent for $2000.. Doesn't seem like a great market to buy rentals in.
@Ari T. What zip codes would you recommend in Tucson for investments in rental property?
@Maritza Himelic Beside UofA distric which is highly overpriced and well known, Zip codes: 85715, 85710, 85712, 85748, and foothills if you are looking at SFH with higher income renters, such as Medical field, Raytheon...etc, which would be 85718, 85750, 85749(Sabino).