We see many Phoenix area investors come into the business thinking the cheapest priced home or multi-unit dwelling is the best. This is not necessarily true.
We believe the best rental properties are the ones most likely to appeal to quality tenants on an ongoing basis. A cheap home in an over saturated or bad rental area will yield you little or no income. However, a home in a desirable area, near good schools and employment can be profitable. The old axiom location, location, location applies to the rental market as well.
In our current market, you may find affordable homes with good CAP rates in areas you never thought possible. We've seen deals pop up in Scottsdale, The Biltmore and even Paradise Valley.
Naturally, price is important and we believe in strong negotiating and a willingness to walk away from properties where the numbers don't add up. At the same time, finding a property in a great area insures long term success through lower vacancy rates, higher long-term appreciation and tenants who traditionally take better care of the home.
We suggest looking at neighborhood amenities such as golf, shopping, good employers and popular schools in addition to price. In our current market, homes near hospitals may be a good choice since medicine is not as impacted during a recession as some market sectors. A location near the light rail may be important to a tenant as well. The important thing is to study the current market, talk to lots of people who rent and get a sense of what's important to them.
The bottom line is find properties in the best location possible and be wiling to pay a bit more to find a place where demand is high, good tenants abound and your investment property has what people want.
As always, we are happy answer your questions via email or by posting comments.
