If you’re looking to diversify your portfolio, you may want to consider investing in Arizona rental properties as there is so much growth potential. Here’s what to know.
As an investor, you make moves. You strategize, network, inquire, and never cease to find the best investment for your future. When it comes to buying Arizona rental properties, you know that there are certain criteria you look for before you go any further. For instance, you want to make sure that the market is thriving and that the return on your investment will be worth it.
Thanks to property management companies, you can buy rental property anywhere in the country – and you don’t have to reside nearby. However, if you are looking for one of the hottest places to plant your rental roots, Arizona may be exactly what you need. And we’ve got 6 reasons why.
1. Employment Rates Are High in Arizona
The coronavirus pandemic hurt many people due to closed businesses, lack of business, supply chain issues, layoffs, furloughs, and more. The unemployment rate soared nationwide. Some areas have struggled to recover, but Arizona has not. In fact, the employment rate clearly shows that people are getting their jobs back – or finding new ones.
What does that mean for you as an investor? It means business and the economy are both healthy. Employees likely have money to pay you rent. And, those who cannot find work in other areas may find themselves in Arizona to take advantage of the available work.
2. Landlord-Tenant Laws in Arizona are Landlord-Friendly
Engaging in fair and appropriate rental practices is necessary to keep yourself out of hot water and ensure the rights of everyone involved are properly met. However, there are some states that make it, well, difficult to be a landlord. For instance, if you have a non-paying tenant, landlords find that evicting that tenant from the property is a hassle and involves jumping through a lot of hoops.
In Arizona? If you have a tenant who has not paid rent or is behind in rent and has defaulted based on the terms of the lease agreement, then you, as the landlord, are entitled to an easy and quick eviction process.
3. Arizona is Seeing Incredible Levels of Growth
There are certain cities in Arizona that are seeing an abundance of growth. And, the Phoenix metro area is number 7 on the list of most people moving in from other states. In other words, it is really beginning to make its name known – Phoenix has a lot to offer its residents.
Maricopa County (home to the Phoenix area) is one of the largest counties in the country. Yet, it is still affordable for landlords and tenants. But with so much growth activity, it may not be long until things start getting a little more expensive here. So, getting in now may be a very good idea.
In addition, Phoenix has been dubbed “the new silicon valley“. As tech giants like Facebook, IBM, Intel, and Amazon expand in the valley of the sun, their employees are bringing cash to fund their large real estate purchases. The growth is simply not slowing down ad more and more tech workers call the Sonoran Desert home.
If you are interested in the Phoenix area, investors are encouraged to look at all surrounding cities and suburbs as the metro area here is spreading greater and wider.
4. Properties are Still Affordable
It is a lot easier to make a decision on an investment when the risk is minimal, isn’t it? While the home prices will vary based on the area and amenities, compared with other places, the homes in Arizona are affordable. Though, we should note that an investor should never just blindly invest in a rental property just because it is affordable. Combining all the other reasons to invest in Arizona rental properties along with the affordability factor means you may very well have a great investment.
5. The Rental Vacancy Rate is Low – Historically Low
When it comes to buying Arizona rental properties, buying something that seems like a great deal won’t do you much good if the rental market has a high vacancy rate.
The vacancy rate tells you just how many rentals are not currently occupied at any given time. The lower the vacancy rate, the better it is for investors. It means that the rental properties that are in Arizona are rented by tenants – and earning money.
We suggest including a 5-10% average vacancy rate in your underwriting. Figure at least one month per year your rental property will be vacant while you place a new tenant. If you have a tenant that stays longer than one year, you just gained a full month of cash flow you didn’t even count on getting! Always hope for the best, but plan for the worst.
6. The Best Property Management Services
Investing in rental property is one thing. Managing that property in the role of a landlord is entirely different. Landlords have to deal with a lot. Finding and screening tenants, looking for high-quality individuals only, requires experience. Being available all hours of the day and night for emergency repairs takes time and patience. Being able to handle routine repairs and inspections means having knowledge in various special trades. And then there is rent collection, document management, monthly transaction tax payments, yearly tax preparations, registering with the county, walk-through inspections, showings, and much more.
Being a landlord may sound like a great idea in theory, but, when it comes down to actually doing the work, it is tough. And time-consuming. Which means less time focusing on your investment opportunities.
Property management teams work to care of rental properties throughout the entire process, freeing up the investors time – your time – so that investment portfolios can continue to grow and flourish. And, the best property management team – the one found at Real Property Management Evolve – is located in Arizona. The Phoenix metro area to be more specific.
This is just one more reason why investing in Arizona rental properties just makes sense. The experts are there, so you may as well use them!
Investing in Arizona Rental Properties
As an investor, you know that there are many things that you must take into consideration when investing in Arizona rental properties. You know that there is not just one thing that makes or breaks a deal, but rather a number of factors.
As you experiment with what works for you, then you will learn how to tell which properties and which areas make the wisest investments. Currently, though, experienced investors around the world have their eyes on Arizona. Places like Phoenix, Glendale, Mesa, Scottsdale, Queen Creek, Buckeye, San Tan Valley, Peoria, and more are all areas that are seeing a rise in interest and investment activity.
Wherever you choose to invest, just make sure you have access to an experienced property management team to take care of the day-to-day business of your property as you focus on that investment portfolio.