Buy and hold property in Phoenix area

[Ali Sardar]

hi guys.  I’m new here on biggerpockets and looking to get started in real estate investing.  I live in the Bay Area CA and as such really have no solid buy and hold opportunities that could be cash flow positive.  So I have been researching areas like Houston and Phoenix and Grand Rapids.  From the research I’ve done, Phoenix area seems to be ranked amongst the hottest real estate market to watch out for for 2019.  I was hoping to learn from someone here about whatever driving growth in Phoenix area, what zipcodes should I be looking at, should I be looking at single family or townhome condo... Also, since this will be long distance I’m also hoping someone would chime in with typical costs associated with property management

[Wes Blackwell]

@Ali Sardar

Hey Ali! Great questions! Here's why Phoenix is growing:

1) California milliennials are turning 30, getting pregnant, and realizing they can buy twice the house for half the price if they move one state over to Arizona.

2) California is also exporting it's middle class. If you're not very rich, very poor, or a public employee then the Golden State is probably not for you. I'm from California so I can say that lol. I mean c'mon, the state just tried to pass a bill taxing text messages. Are you kidding me? Can middle class people afford ANOTHER tax on them? And drive across the state line and gas instantly drops $1+ per gallon. Cost of living is too high for what you get.

2) 10,000 people per day are turning 65 and retiring, and Arizona is the #2 retirement destination in the US. People from the colder stats like Michigan, Wisconsin and areas like Canada are fed up with all the snow.

In fact, the Arizona Sun Corridor is projected to increase in population by a whopping 6.6 million by 2050 (as long as we don't run out of water.)

As for where to buy, it really depends on your goals and budget. Are you looking for a modest single family home in a hot area? Try Surprise. Vacation rental or condo? Tempe, Downtown Phoenix or Scottsdale. Higher budget single family home? Gilbert or Chandler. It's a HUGE area so there's lot to consider and no canned answers unfortunately.

For property management, there's no canned answer either. Prices range from flat monthly fees to 6-10% of the gross rents. All depends on the level of service you want. So best to interview several before making a decision.

Feel free to reach out if you have any more questions and want an opinion of someone looking through the eyes of a Californian ;-)