Investment (Tucson, Glendale, Chandler: short sale, foreclosure, renter)

[dacubz]

I'm not ready to move to Arizona yet, but will be in the not so distant future. I am looking to invest around 50K somewhere in Arizona on a condo or townhouse. Ideally, I'd like something that we can use occasionally, and rent it to vacationers at other times.

We've just begun our search, and I have reviewed the crime statistics and have started in the Glendale/Peoria area, and have also looked into Tucson, and Chandler. The more that I research the more confused I am. I understand that the Chandler area is good, but are there areas that are considered a draw for renters of vacation property as well? I don't want to invest in something that will sit empty, but I don't want a full time tenant either.

Does anybody have any info on agood way to start with this venture? Any good contacts or property management companies that can help? It's possible that i will be moving forward with this within the next few months.

Thanks in advance!

[AZJoeD]

Since you are thinking about renting to vacationers, you need to find a place that have amenities. Not just pool, but exercise room and maybe an on site property manager that can help with rentals.

Also you might want to find a property close to events. Think spring training baseball, festivals, car shows, etc.

You will likely have to furnish it, so maybe one that is a few thousand more but already furnished might be better.

[dacubz]

Any ideas?

[azdr0710]

is this 50K toward the down payment or the whole thing?.....50K may not be enough for anything decent if you want that to be the entire cost.....yeah, we hear about "nice" places going for that much in some short sale/foreclosure deal, but they're not in the best locations, I think, and will be flat, appreciation-wise, for at least a few years...

just my opinion....

many out here rent to winter visitors for a premium, then live in it the rest of the year.....but there are lots of those and some remain unrented....

[Howard Roark]

A house/condo/townhouse is not an investment unless you buy low and can successfully keep it rented out and it pays your PITI (and maintenance).

[MN-Born-n-Raised]

Go to a spot like VRBO.com. Look at the calendars are see what is rented. In summary, it’s the stuff that is very nice that rents the best. The other properties that rent well are quality that is inexpensive but not as good as the best stuff at a “reasonable” price. I get $2K per week for my condo in Mexico and $2500 a week for my lake home ($425K and $550K value respectively). On average, people who rent seasonally are looking for a piece of paradise. When you rent it out, you want to make sure to rent it to someone who respects your property. On average, the more you charge the better caliber of renters.

Monthly renters need a better rate that bi-weekly renter. I get $8K per month peak renting it by the week or $6K for two bi-weekly renters or $4900 for monthlies. 10% of the entire cost in the break even point and that assumes 5% return on your money and includies depreciation. Therefore I have to rent by the week or biweekly to make any money. Analogy: You can afford a $30 steak dinner but not every night for a month.

A problem that some people have is they assume they should furnish it cheap because they have renters in mind. It’s actually the direct opposite. Go over board and it will attract the best people for the most money. In summary, lower priced properties for seasonal don’t rent well (on average).

Call a management company to pick their brain. They will tell you exactly what I just said unless they also sell condo's. I've observed commision breath sales agents lie though their teeth by pointing to my numbers. There is also an art to locking in a renter which is a whole different topic. The competition is stiff so you need to be different. I’m afraid a $50K condo will sit empty.

[Zippyman]

I wouldn't even consider this - you're too far away to manage it yourself, and a management firm is likely to eat you alive with fees and expenses. Buy a CD or some bonds if you want an investment.

[belgirl]

I agree with the above posters. 50K is way too low for something decent and not having a full time tenant, in my opinion is not the way to go, considering the market.