Phoenix Real Estate-Investment Property

by Lavine Team on September 20, 2011

Investors from all over have been buying homes in the Greater Phoenix Real Estate area primarily because the demand for rentals is good and the potential for a large return on investment 5-10 years down the road is very real. History has shown us that Real Estate makes for a great investment if you buy when the timing is right. The prices certainly are very low and while people are losing their homes to foreclosure or short selling their house to get out from the burden of heavy debt, they all need a place to live and they won’t be able to get a mortgage for potentially years to come.

That is where the main rental demand is originating from along with the usual other reasons for renting due to people being out on their own for the first time, new to the workforce, new to the area or for those that can’t qualify for a mortgage yet or have the down payment or credit rating to buy a home.

So where are the best places to buy an investment property and how much rent can you expect to get? Well, the video example above is of a 4 bedroom 1800 sq ft home in Goodyear, which is out in the west valley of the Greater Phoenix Real Estate area. It will sell for around the $110000 mark and one can anticipate getting about $1000 a month with the tenants paying the utilities. The right homes selected between $95000-125000+ in the Goodyear general area can expect to get $900-1150+ a month for rent.

This is just one example………….Gilbert in the east valley is a very nice area and homes that range from $125000-155000+ can potentially fetch $1200-1500+ a month for rent. Down in the town of Maricopa, which is 20 minutes outside of the greater Phoenix area, homes are less expensive ranging from $75000-95000+ for a good investment property that can rent for $700-900+ a month. A condo located in a part of South Scottsdale that is close to large employers or just far enough away from ASU university could readily rent for $700-750 a month based on a $60000-70000 investment.

There are many nice areas each with their own price range, demand levels and expectations for rent but the good potential all has one common theme…..buying the right product for the particular area. I have maintained that in general, 4 bedroom homes are more desirable than 3 bedroom homes and in theory should rent out a little faster. That is because with homes not having  basements here, rooms and storage are at a premium so the more rooms the better. Further to that, single level homes in theory should rent out faster than two level homes as they are generally in shorter supply. But this isn’t always the case as there are areas that have a low supply of anything so 3 bedrooms would be just fine or if an area is so desirable that 3 bedrooms would be just fine or in the above Scottsdale condo example, a 2 bedroom condo could rent out fast if the right location is selected.

So the biggest factors for rental potential are location of course, layout, condition and the advertised rental amount. Whomever has the best combination of all of these factors should rent out the fastest……a basic fundamental.

Another item to consider is whether the home is a foreclosure or a short sale. Regular every day sales can occur too but they are very rare unless they are investor fix-n-flips. Most people owe more money then their house is worth so they are stuck in it unless they choose to throw-it-all-away or salvage what’s left of their credit and short sale their home, if they qualify to do that.  The foreclosures generally get more attention than short sales as they are properties that you can get quicker and find out quicker if you’re going to get them. But there are many good opportunities with short sales if you can have the patience to wait. Because multiple offers are more prevalent on the foreclosures that can potentially cause the price to be a little higher, there are some good value possibilities in acquiring a short sale. We have a lot of experience with short sales and a great batting average for successfully acquiring them. No matter what you may of heard about short sales, you should chat with us about them.

The Lavine Team can assist you with finding the right location, product type and make recommendations for the strategies that can be implemented for the different types of listings that are available to you. Please call or email to inquire….we’d be delighted to chat and to set up a search to send out results for possibilities within your target price parameters.

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Search for Scottsdale homes with a pool

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