If you can’t decide on the right location for your next (or first) real estate investment, you’re lucky to stumble over this article. As a part of our ‘Investment Opportunities’ project, I write and share with you articles about America’s major cities and investment opportunities these cities have to offer. We publish such articles biweekly, and some great cities like Chicago, Atlanta, LA, and New York have already been featured. This time, all eyes are on Phoenix.
The 6th largest city in the US, Phoenix is more than it may seem at first glance. More often than not, people picture Phoenix as a combination of blue sky, red rocks, and the scalding sun. Of course, such a portrait is more than justified. Because of the city’s desert setting and associations that come to mind when people think of Arizona, there is no reason to marvel. And exactly because of a cloud of stereotypes hanging over Phoenix, it is oftentimes overlooked by real estate professionals. However, apartments for rent in Phoenix might be the best bet for your housing dollar. That’s why the goal of this article is to help you see all the potential behind investing in local rentals.
Why Investing in Phoenix, Arizona?
Phoenix is expected to become America’s top real estate market for the next few years. And if you’ve ever lived in this city, you’ll surely understand why. This place offers a variety of outdoor activities ranging from hiking to mountain biking to golf. Although Phoenix is a huge city, locals have no reasons to complain about heavy traffic. And most importantly, Phoenix boasts affordable housing. In fact, it is ranked number 5th on the list of the cheapest American cities where everyone was relocating in 2020. Given all that, there’s no wonder why hundreds of people of different ages, professions, and interests choose to settle down here.
In case the above-mentioned reasons are not convincing enough, see what our guest expert Ted Stevens says in this regard:
“Phoenix has great growth potential with billions of dollars in new business growth in the area. At the same time, it still has very competitive property values that makes investing in Phoenix better than in other areas. There are many great areas to invest in across the Metro-Phoenix area. Communities like Mesa, San Tan Valley/Queen Creek, Glendale, and Goodyear are all fast-growing and worthy to invest in. Regardless of the size of the city and all the luxuries that come with that, Phoenix still has a very comfortable small town feel and makes sure to maintain its unique Southwest culture and atmosphere”.
Ted Stevens from The Steven’s Group
Which neighborhoods of Phoenix will give you the biggest ROI?
Median rental price:$3,469/mo Median purchase price: $300,000
One of the biggest advantages of Glendale is its location. Situated northwest of Phoenix’s downtown, Glendale is no longer considered a faceless suburb. While it is hard to tell whether Glendale should be treated as an independent city or a part of the Phoenix Metro area, one thing remains clear. This place is now home to professional sports teams, numerous antique shops, upscale restaurants, and much more. The area is filled with antique charm, and it stands on its own among other neighborhoods of Phoenix. The good news is that the average purchase price for properties in Glendale is among the most affordable in the city.
Median rental price:$2,785/mo Median purchase price: $363,000
The population of Goodyear is growing steadily, and as of today, over 79,000 live here. It’s safe to say that Goodyear represents a beautiful interplay of modern comfort and serenity that can be typically found in the least crowded parts of the earth. Purchase prices for homes in Goodyear are affordable, while local income properties can make you more than $1,000 per month. Goodyear is a popular choice for married couples and families with kids, and it goes without saying that such categories of people make the most trustworthy and tidy tenants.
Median rental price:$2,718/mo Median purchase price: $318,000
If you’re fond of high-rises, luxurious apartments, historic buildings, and the vibes of a big city, consider buying income properties in the most vibrant part of Phoenix. Local downtown is filled with fancy coffee shops, atmospheric restaurants, museums, and entertainment facilities. Of course, prices for properties in Downtown are somewhat higher than in other parts of Phoenix, but you see what you pay for. Downtown Phoenix is a popular choice among students and young professionals, so a lack of potential renters will never be a problem.
Median rental price:$2,479/mo Median purchase price: $392,000
Rumor has it that Chandler’s real estate market is hotter than ever these days. The local real estate market has been booming over the past few years, and today it is considered one of the best neighborhoods of Phoenix to settle down in. Chandler is popular among growing families and young professionals. The city has got plenty of newly opened restaurants, bars, and coffee shops, which makes Chandler an exceptionally nice place to live (and to own income properties, obviously).
Median rental price:$1,259/mo Median purchase price: $272,000
Some people say Laveen is only good for growing old, but I am here to reassure you. The area is gorgeous and is building up pretty nice. What’s more, Laveen is located in close proximity to Downtown, which makes it a neighborhood of choice for are lucky to have their offices in Phoenix’s skyscrapers. The local community is mostly friendly and caring, which makes this place just as good for raising kids. Given the ratio between purchase and rental prices for residential properties in Laveen, this neighborhood is especially attractive for real estate investors.
Median rental price:$2,397/mo Median purchase price:$349,000
A great choice for an attentive investor. Tempe is an inner suburb situated in the center of Phoenix and the rest of East Valley. Therefore it has a very distinct urban landscape, with dense high-rise developments in the northern part of the district, while the southern part has a less dense suburban development pattern with a strip mall, low-rise office building, and single-family homes. South Tempe is a perfect living arrangement for families who want a serene suburban setting but want to stay close to the big city. The north is populated by upscale business spaces with headquarters of Fortune 500 companies and luxurious condos. Rental properties here have a constant demand from the young professionals who want to live close to work and willing to pay an extra buck for that. The city is also home to the largest campus of the University of Arizona, which means that a large student body is in constant search of rental housing in the area.
Median rental price:$5,433/mo Median purchase price: $624,000
Scottsdale is like asupermarket for a rental investor. South Scottsdale is a center of various business ventures, research centers, and innovation hubs, such as SkySong. Old Town is an upscale quarter with a gigantic luxurious mall – Scottsdale Fashion Square, various art galleries, and boutiques. It is also a center of nightlife, sometimes regarded as the desert version of Miami South Beach. This part of the city is comprised of elegant hotels and condos. The Shea Corridor contains lavish single-family homes, whileNorth Scottsdale is the least built-up part of town currently being actively developed.Pick and choose, depending on the amount you are ready to invest.
Median rental price:$3,200/mo Median purchase price: $449,000
An upscale master-planned community. Desert Ridge is an ambitious corporate urban development project. The core of it is CityNorth, mixed-used development with both residential and commercial properties. The neighborhood features retail, restaurants, civic and entertainment venues connected to public spaces in the pedestrian-friendly environment. The housing is mostly represented by deluxe condos with swimming pools, gyms, and parks on site. Located in the vicinity of the business quarters and the major logistic hubs, Desert Ridge is an elite community for white-collar workers and business executives.
Median rental price:$2,453/mo Median purchase price: $659,000
An energetic financial district and an upscale residential community. Biltmore is an amalgam of business clusters and mid-rise residential towers. It is home to the aspiring financier, as well as affluent financial tycoons, who prefer to reside in the gated residential communities along the Camelback Corridor. The anchor of the neighborhood is a local landmark- Arizona Biltmore Hotel. This architectural masterpiece is one of the largest convention centers, hosting political rallies, debates, and massive corporate fares and meetups. It is surrounded by 18 hole championship golf course, and the most exclusive homes of Phoenix. Despite its high profile, Biltmore is not terribly overpriced and could offer extraordinary properties at a fair price.
Median rental price:$2,843/mo Median purchase price: $1,300,000
One of the best places to live and invest in Phoenix. The distinctive feature of the neighborhood is well-preserved homes on the large lots. It was built on former citrus plantations and inherited yards featuring lemon, orange, and grapefruit trees. In contrast to the semi-desert landscape of other neighborhoods, Arcadia posses well-irrigated and lush landscaping. The area is bicycle-friendly and has spectacular hiking destinations of Camelback Mountain and Piestewa within reach. Arcadia is adjacent to the fashionable neighborhoods of Biltmore, Paradise Valley, and Scottsdale. Due to this fact it has a low crime rate and high property value.
Summing up about buying apartments for rent in Phoenix, it’s worth being said that the city is considered a place of choice for real estate investors in 2021 for a reason. As the prices for properties in Phoenix are expected to go up for the next few years, investment in residential real estate seems to have good potential. Make a smart move, invest in real estate in Phoenix. And chances are that you’ll be happy about your choice soon.
Mariia serves as editor-in-chief and writer for the Rentberry and Landlord Tips blogs. She covers topics such as landlord-tenant laws, tips and advice for renters, investment opportunities in various cities, and more. She holds a master’s degree in strategic management, and you can find her articles in such publications as Yahoo! Finance, Forbes, Benzinga, and RealEstateAgent.