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Property Investments

Phoenix Real Estate Market Trends Every Investor Should Know

As a property investor, it’s essential to understand the latest Phoenix real estate market trends to make better investment decisions. Here’s what to consider.

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Being a real estate investor involves more than just investing money. Well, that is assuming you want to be a successful investor.

Paying attention to the world around you – the bigger picture – gives you a bit more insight when making investments. It means being able to understand the Phoenix real estate market, market trends, future predictions, and so forth. The more you learn about what is going on, you get a greater sense of when you should make an investment and when to walk away.

If you are an investor in the greater Phoenix area, then there are a few Phoenix real estate market trends you should know about.

Local Financial Health is Heading in the Right Direction

As investors, we want to make sure that the area we are investing in is thriving – or has a positive outlook at the very least. And the greater Phoenix area has that. Foreclosure and mortgage delinquency rates are lower than the average nationwide – and so is the unemployment rate. Home prices are going up – and so is the median rent price, coming in at just $1,587. And while this is lower than the national average, it is higher than what it was in Phoenix last year – up by 8.4%.

The Rental Vacancy Rate is Looking Good

Looking at the local renters market – especially the rental vacancy rate – is important. If the vacancy rate is too high, it could signal that the demand just isn’t there. But, currently, in Phoenix, that is not the issue at all. In fact, the rental vacancy rate is currently 3.9% – which is lower than the national average and low for the Phoenix metro area, too.

Do you know what that means? It means that for those choosing to purchase a rental property, there is a good chance that you will have no problem renting out your property to tenants, with very little downtime.

New Construction is a Mixed Bag

With construction costs on the rise and the loss of construction jobs, there is an indication that the construction industry with Phoenix is struggling. It has been reported that costs are up 6.7% and approximately 1,300 jobs were lost.

By looking at the permits, we are able to see that the people of Phoenix want that new construction number to go up. Permits for single-family homes are up immensely. But that’s not all – multi-family properties are on the rise, too. Looks like there could be some positive turnaround for new construction in the near future.

Phoenix Real Estate Neighborhoods to Keep an Eye On

The Phoenix metro area is huge, encompassing some growing areas, too. It is important to take a look around at the areas that appear to be doing well and growing — and find those that are gaining recognition and new residents.

After all, the more growth in a neighborhood, the better chance you may have with your investment. Here are a couple of areas to monitor.

  • East Mesa / Queen Creek / San Tan – It’s no surprise for any resident living in Phoenix to hear the East Valley is growing like crazy. As major tech companies expand into the wide open desert spaces available in the East Valley, new homes are being built and existing home prices are starting to increase. Rental prices in this area are still exceeding mortgages.
  • Buckeye – We can all agree that COVID changed a lot in our country. One of the trends we noticed during this time was a shift in location for new home buyers. We have seen more home buyers looking in cities like Buckeye as they can purchase larger homes with ample land space for the same cost a downtown high rise. In addition, cities like Buckeye are starting to bring in larger companies establishing their manufacturing facilities in this area. More jobs in the area = more profit for investors like you!
  • Happy Valley / Surprise – Another great area with more tech companies, and manufacturing facilities building new spaces. This area is expected to see an increase in new jobs by over 10,000 in the next few  years!

Keep in mind that there are all sorts of neighborhoods throughout Phoenix, as well as in the surrounding areas of Gilbert, Mesa, Peoria, Scottsdale, Tempe and more. You are sure to find what really works well for you, your interests, and your investment style.

The Job Market is Alive and Well

Many major industries like to call Phoenix home. And Fortune 500 companies make up a big part of that. With the unemployment rate down, it seems like things must be moving in the right direction. The economy of the Phoenix metro area is propelled by the following healthcare, finance, tech, and retail companies:

  • Magellan Health and Banner Health employ a large number of residents (over 10,000), as well as Dignity Health, Phoenix Children’s Hospital, and the Mayo Clinic.
  • Three main companies bring the greatest presence in the area, Avnet, Amazon, and Honeywell.
  • This is a busy sector in the Phoenix area. Big corporations such as American Express, JPMorgan Chase, Bank of America, Wells Fargo, and Charles Schwab are all found here.
  • There are a couple of retail giants that have their headquarters in the Phoenix area. They are Petsmart and Sprouts Farmers Market.
  • A lot of jobs – and a lot of students – come from the education sector in Phoenix. And, it includes Arizona State University, the University of Phoenix, Phoenix College, and Grand Canyon University.
  • We can’t talk about jobs without talking about the Tech growth! IBM, Intel, and even Facebook are all establishing operational facilities in the Phoenix metro area. Phoenix has been labeled “the new Silicon Valley” of the southwest.

Is Phoenix Right for Your Investment?

The sign of a good real estate investor is one who looks closely at all the opportunities available and all the data that support those opportunities — and then chooses the best choice. You can go anywhere in the world to invest in real estate, but why would you when the market in and around Phoenix is looking so fantastic right now?

There are a lot of opportunities for growth seen with these Phoenix real estate market trends. Lots of space and signs of new construction, a growing population, a stimulated economy, and more.

The future is looking bright for investing in Phoenix and the surrounding metro areas.  And, if you decide to take that leap, you will feel confident that you will find the best property management company to handle your investment right here in the local area.

At Real Property Management Evolve, we understand the local Phoenix real estate market and follow the trends closely. So, whether you are interested in investing in rental property in Mesa, Glendale, Scottsdale, Tempe, Phoenix, or the surrounding areas, it is probably a wise decision. We know how successful rental properties are doing right now in the area — and are very optimistic about the future.

For a FREE assessment of any rental property you are considering purchasing please contact our team at 602-295-4661.

Categories
Landlord Property Management Tips

Real Estate Investing: 4 Tips for Successful Rental Properties

Before beginning real estate investing, it’s important to consider these four tips for successfully investing and renting rental properties. Here’s what to know.

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Many new investors get carried away with the excitement of real estate investing and the possibility of making passive income. Just the idea of it all can have these newbies making big plans for the future.

 

Important Tips for Real Estate Investing

Ready for some truth?

There is no guarantee in real estate. You may invest in a multi-family rental property and find that you can retire 10 years sooner than you ever thought possible. Or, you may invest everything you have into one bad investment and find it nearly impossible to recover.

There are books out there claiming to tell you everything you need to know about real estate investing. And while there are many pros who have gone before you and have offered up their advice, there is no one guidebook that can tell you everything based on your set of circumstances. Sure, it can absolutely point you in the right direction of building and diversifying your portfolio, but it doesn’t give you step-by-step directions that fit every scenario.

Just as your teachers will teach you concepts and you have to learn the application in life. The best thing you can do is to learn the tips and tricks of the trade — and then learn how to apply them to your personal situation.

 

1. Look for Profitable Rental Properties

Just because a property is on the market for a great price does not mean that it is suitable for real estate investing. Some properties may be listed at such a low cost because they don’t have many profitable qualities. It helps to know what to look for when it comes to purchasing properties that can increase your profits.

Here are a few qualities to keep your eye on:

— The Neighborhood

Look around the neighborhood. Are there a lot of rentals available or a lot of homes for sale? Is there a certain type of most common home in the area? Is there a large homeless population? Is the walkability factor high? Quality tenants are going to look for a rental in a neighborhood that feels like home. Pay attention to the feeling you get while in the area.

— The Schools

Good schools are on the top of nearly every parent’s must-have list. Take a look at the ratings of the schools in the area to determine whether or not they are going to be satisfactory to potential new tenants.

— The Job Market

Having a job market that is thriving without the long commutes is going to be a bonus for every potential rental property investor. It ensures that tenants will have access to employment and will be able to pay their rent. This is the most important factor when considering a purchase of a rental property. You must have the jobs available for people to earn enough income to pay rent!

— The Crime Rate

Unless someone is involved in criminal activity, it is highly unlikely that they’d jump at the opportunity to place themselves in the middle of it in a rental. This may lead to high vacancy rates. In addition, high crime means a high chance of damage or vandalism at your rental property that could end up costing you money. We strongly suggest looking up the crime rate, and sex offender list for the area.

— The Property Taxes

Some areas will have higher property taxes than others. While it should definitely not be an end-all factor in purchasing a rental property, it is something to consider. If your higher taxes are due to an ideal location, those extra dollars are probably worth it. If not, you may want to look a little more closely at your options.

— The Amenities

When looking into real estate investing, consider the surrounding amenities. What are the things in the neighborhood and close surrounding area that will make someone want to live there? Are there local parks? Dog parks? Nearby dining? Grocery stores? Medical facilities? Movie theaters and other methods of entertainment? The more amenities you encounter, the better.

— The Outlook for the Future

Does the area look like one that will see future development? Does it seem like you are coming in at a good time when the market rates may increase and development picks up? Or does the area seem doomed? Are businesses closing? Are there a lot of vacant properties?

— Average Rental Rates and Current Rental Market

One of the most important aspects of real estate investing is understanding the rental market. Gain an understanding of the rental market in the area of the property. Compare it to others to determine the rent level. Is there a demand for rental properties? What does the average vacancy rate look like?

 

2. Consider Single-Family Rental Properties

Single-family properties are one type of rental property that most investors start with. They are always greatly sought options for renters – especially when they come with some of the qualities listed above. For new investors, it allows you to handle one tenant at a time while getting your feet wet.

 

3. Consider Multi-Family Rental Properties

Investing in multi-family rental properties means being able to grow your portfolio in less time. You don’t have to purchase multiple properties,  but rather just one — and then you can have income from multiple tenants. One loan, multiple units. This avoids many frustrations and a boatload of paperwork. Though, it is important to note that for someone who is just starting out, taking on a multifamily property could be overwhelming unless you have help from a multifamily property management company.

 

4. Always Hire a Property Manager

Property managers are great at handling rental properties, whether you have one or a hundred and one in your portfolio. They are able to handle everything from the advertising of the property and tenant screening to rent collection, maintenance and repair, as well as eviction if necessary. This not only reduces the headaches for you but also frees up your time so that you can continue to focus on real estate investing without having to worry about actively managing your rental properties.

When you look for a property manager, be sure that you find someone like Real Property Management Evolve that:

  • Is experienced in both single-family rentals and multi-property rentals (even if you don’t have both now)
  • Has a network of vendors and professionals in the community that can handle any needs of your property.
  • Has a thorough tenant screening process to find only the highest-quality tenants.
  • Knows and practices all the fair housing laws locally and federally.

Regardless of how new you are to real estate investing, following these tips for successfully finding the right rental properties can get you started in the right direction.

Categories
Property Investments

3 Tips to Increase Passive Income on Your Multifamily Property

As an investor, owning and renting multifamily property can be a great way to diversify your portfolio and bring in passive income. Here are three tips to help you succeed.

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Passive income is income that is earned without having to actively work at it. It doesn’t require a lot of your attention or time, yet it is still earned income. Focusing on investments that allow you to continue earning money with passive income can be a fantastic way to earn money now and in the future.

Once such type of investment is multifamily property. Though, your actual passive income will vary based on how much involvement you have in the property.

Looking to increase your passive income on your multifamily property? You need to make it more desirable. Let’s take a look at 3 tips to increase passive income on multifamily real estate.

 

1. Increase the Value of Your Multifamily Property

In order for you to make money on rental property, you need to have renters. And because there are often so many options on the market, showing there is great value in renting your property may entice the potential tenant to lean toward your rental.

It is important to mention that the more value you add, it is easier to keep your rentals priced closer to the higher end of the market range. Renters will be able to justify the extra money each month due to the great value and amenities they are receiving from the property.

So, how can you increase the value of your multifamily property?

— Add Storage Space 

Storage space is something that many people are always looking for. Especially renters. Moving from one location to another – especially smaller apartments – means having stuff that doesn’t necessarily fit. Rather than get rid of it, millions of people throughout the country spend between $50.00 to $150.00 each month for storage.

Does your multifamily property have additional space to build storage? Storage facilities are incredibly cheap to build and can add a lot of value. Plus, not only can you entice renters with convenient on-site storage, but you can charge them a monthly fee for the storage as well. It could be a great investment. And a great way to increase your passive income.

— Add On-Site Laundry Facilities

Many,  but not all, multi-family properties don’t come with a washer or dryer in the unit – or even a hookup. This means having to carry dirty laundry to the nearest laundromat. It can be seen as a great inconvenience. If possible, add an on-site laundry facility. The value of this investment is immediate and can add to your passive income, as well. Instead of your tenants going to other places in the community to do laundry, they can conveniently do it where they live and you can earn the money they paid to wash and dry. In addition, a lot of companies who lease the washer and dryers will give a signing incentive up to $14,000 when you lease their equipment!

— Be Pet Friendly

People love their animals – and they want to be able to take them wherever they move. For many, not allowing pets can be a deal-breaker. If you’d like to increase the value of your property and increase your ability to earn passive income, then deciding to be pet friendly means allowing your tenants to have pets. In addition, building a dog run on your multi family can help contain the pet mess while providing an extra amenity to your tenants. Remember — you can charge pet rent on top of the normal monthly rent.

-It’s a win-win for both parties.

 

2. Add Safety Features to Your Multifamily Property

People want to live somewhere safe. They want to know that when they are home or on the property that they are safe and secure. Taking steps to increase the safety of the property means adding additional value in it — and potential tenants will see it. In addition, you reduce the incidence of any vandalism and theft on the property so that your replacement, repair, and insurance costs remain low. All of this ties into your income – and leaves you with an increased passive income.

Here are a few ideas for increasing the safety features:

  • Make sure you have adequate lighting throughout the property – and add more if necessary.
  • Keep bushes trimmed to minimize hiding spaces for intruders.
  • Consider adding security access points, whether through a gate, a door with a key code, etc. This will depend on the setup of your property.
  • Avoid glass doors. These are easy to break — and costly to replace.
  • Use top-notch locks on doors and windows to make accessing the property harder for criminals.
  • Make use of security cameras on common areas of the property. Put up signs advising of such – and let your residents know, too.

 

3. Hire a Property Management Team

Hiring a property management team to handle your property for you is one of the best steps you can take in increasing your passive income. Why? Well, there is a lot that comes with managing a rental property. When you have a multifamily rental property,  you are multiplying that work times the number of units you have. This can significantly increase the volume of your work. From finding new tenants, rent collection, repairs and maintenance, and so much more — you are actively involved in earning that income. Being a landlord is much like having a job. And with many units, it can be a very demanding job.

The idea with passive income is to earn money without having to put in the effort. This is where a multifamily property management companies come in. See, the property management team will put in the work to get the property rented, maintained, handle repairs, rent collection, all the marketing and paperwork — every aspect of the rental process. While you sit back and earn the income. That is what passive income is all about — and how a property manager can help.

 

Conclusion

Being a landlord can be a lot of work – and surely reduces the amount of passive income you receive. If you are ready to increase this income and be able to focus your attention on other investments rather than managing the day-to-day of your multifamily rental property, then you need to make your property more valuable, keep it safe, and hire a property manager.

And, since we are on the topic – you can’t just hire any property manager. Be sure that it is the best one in your area, such as Real Property Management Evolve in the Phoenix area. This breeds confidence and increased passive income.

Categories
Phoenix Property Management

What to Know About Arizona Lease Renewals to Keep High-Quality Tenants

If you have high-quality tenants in your rental properties, it’s important to keep them there. Here is everything you should know about the lease renewal process in Arizona.

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High-quality tenants are the cream of the crop when it comes to leasing out rental properties. These are the individuals you don’t have to worry about. They pay rent on time, care for the property as if it were their own, and report the need for repairs as they happen.

High-quality tenants are reliable – and you want to keep them. Here’s what you need to know about doing just that when it comes to your Arizona lease renewal.

 

Lease Renewal Process in Phoenix, Arizona

Different states have different laws when it comes to a rental property lease renewal. In Arizona, a lease will automatically renew if proper notice isn’t given by the landlord or the tenant at least 90 days before the end of the lease term.

For those who have tenants that they want to keep, it seems like an effortless way to make it happen. And, for the most part, it is. Though, keep in mind that unless you go through a new lease signing, the terms of the old lease – including the rental amount – will remain the same going into the next year.

A downfall of this law is that you have to stay on top of it – especially if you have bad tenants. If you miss the deadline you could very well be stuck with them for another year unless you have changed your lease to go month to month upon expiration.

To make sure everything runs smoothly so you can keep the high-quality tenants and weed out the bad ones, you need to approach your tenant at least 3 months prior to the end of the lease. Talk to your tenants and see if they would like to renew the lease. It is best to do all of this correspondence in writing. If they agree to stay, you don’t really need to take any other steps as long as you are keeping the lease terms the same. If you are choosing to increase the rent, you will need a new lease agreement with adjusted lease terms.

And, of course, written notice of non-renewal should be provided to the tenants you don’t intend to have stick around.

 

Why the Push to Keep Your Tenants?

You may be thinking – There are many potential tenants out there looking for places to rent. Why not just find another if the tenant doesn’t want to stay? And, well, you could just find someone else. But there are some great benefits to keeping the good tenant you have.

  • There is no need to clean up the property, get it ready for showing, market it, attend showings, go through the tenant screening process again, and so on. Being between tenants can often be stressful for landlords.
  • Vacancy rates are real – and they can hurt your bottom line. There may very well be a lot of people looking for rental properties, but who is to say they are looking for your rental property? The time of year, the rental market, and other factors will also play a role in how fast you will get your vacancy filled.
  • It is not always easy to find great tenants. So when you find them – you want to keep them!

 

Ways to Get Your Tenants to Renew Their Lease

When you have good tenants, you want to entice them to renew their lease. Not only is it a struggle to try to find new tenants – and the whole process that goes along with starting over – but there is also no guarantee that your next tenants will be as great. Therefore, when you do have those high-quality tenants that you’d love to keep, sometimes it pays to give a little extra to encourage them to stay.

To convince your tenants to sign a lease renewal, you could:

  • Offer incentives, such as a discount on monthly rent payments or a discount on the first month’s rent.
  • Throw in a property upgrade or much-needed renovation.
  • Offer a gift card for a local dining spot, grocery store, or home store.

Though just as you enjoy certain tenants, they enjoy having a landlord they can trust and count on. So taking steps to be proactive and responsive with maintenance as well as keeping the lines of communication open are great ways to make tenants want to stay.

 

Lease Renewal Process

As discussed, to renew a lease in Phoenix, Arizona, approach your tenants at least 3 months before the lease is up to see if they want to renew. Make sure this is done using written communication, such as sending an email or letter. This letter should include any proposed changes for the upcoming lease and include new lease dates.

If the tenants agree to the terms and want to renew their lease, draw up the new agreement with the new terms. You can send this to the tenant via email for digital signatures. Or, it can be done in person – whatever your preference. Just note that the easier it is for the tenant to sign the lease and get it back to you, the faster you will have confirmation that the tenant is locked in for another year.

 

How a Property Management Company Can Help!

Property managers can help you keep high-quality when it is time for a lease renewal. Like we said, when you treat your tenants well, they will want to stay. And a good property management team is efficient and effective at increasing rents while incentivizing tenants to stay while also taking care of the property. At Real Property Management Evolve, we offer professional, quality service and prompt communication. It is what makes us the best property management team around.

All of this keeps tenants happy and it keeps renewal rates high.

 

Closing Thoughts

Finding high-quality tenants can be tough. Keeping them after their lease is up can be even tougher. But, taking the right steps – such as managing the property well and hiring a property management company – can make the idea of lease renewals a reality.

If you are getting ready to approach your tenants about a lease renewal, remember to do so in writing and state any additional terms. If accepted, send out the new lease and make it easy for the tenant to get the signed lease back to you.

Or, why not just let a Phoenix property management team handle it all for you?