Looking to Buy a SFR in Phoenix Metro

[Jie Yu]

Hi all! 

I'm a new investor from California. I'm looking to find my first SFH (3+b2b) investment property in the Phoenix area, as a long term buy and hold rental at 300k - 400k price range. I'm mostly looking at Glendale, Mesa and south / southwest Phoenix. Which neighborhoods do you think have good appreciation return in the future? Are there any other areas I should look into?

I want to ask about the South Mountain neighborhood (north of Baseline Rd) in particular. The commute to downtown is convenient, some communities look decent (at least from Google street map). Comparing to more established areas like Chandler and Gilbert, the rental income is similar while property value is only about 3/4. On the other hand, I read from some online article it is one of the worst neighborhood in Phoenix (source). Any local insights about this neighborhood? Is it an up and coming one? 

Looking to get input from everyone and thanks in advance!

[Bob Okenwa]

@Jie Yu

I'd probably think twice about South Phoenix. There are some rough areas down there, although there are a few pockets of newer construction. If you're that close to Downtown and Tempe and prices are that low, they're low for a reason.

At your budget, there are a small amount of properties in Chandler and Tempe that would have pretty strong upside in terms of quality of tenant and appreciation. Keep an eye on Buckeye. It's one of the fastest growing cities in America and you can get near-new houses for under 400k still. 

I'd look at Goodyear and Surprise before Glendale as Glendale is going to have much older housing stock (1960s-1980s vs 2000s+ for the suburbs) and the suburban homes are going to need a lot less work and mostly cosmetic touch ups like paint if the home has been maintained well.

I'd say where you're looking to buy would depend on how much work you'd be looking to do. The homes built in the 60s and 70s are not going to be as turnkey as the ones built this century.