Is Phoenix RE a good investment? (apartment complex, renters, condo)

[MN-Born-n-Raised]

Originally Posted by ReadyFreddy

Why? Because it's harder to get a cheap house now? I'm not seeing that prices have gone up much in the zip code I watch. I still think houses here are dirt cheap. I wonder how much of the rising median price is due to the shortage of lower priced homes rather than increasing prices across the board.

You forgot the last three words that I post. In Phoenix, I think the ideal time to buy a SFH's has passed for an INVESTMENT.

Here is why. SFH's generally don't do well for cash flow in comparison to multi-dwellings. If your model is to rent it out to break even and exclusively pick-up appreciation, that's still is possible but I would not go there. But For those who studied cash flow exclusively (renting it out longer term) the time probably has passed.

I paid $51 a sq foot. A couple of the same floor plans went for $65 and $70 respectively. It certainly can go up another $7 a square foot but you HAVE to rent it out because the fixed costs (taxes, HOA, etc) will eat into those profits. By paying 25% more money for the same house will cut into your cash flow. Hence, I think the ideal time has passed.

I think that SFH ship has sailed.

[autism360]

I think that SFH ship has sailed.

We are in uncharted territory for real estate no one knows what will happen and if inflation kicks in what seems to be overpriced today could be a screaming deal in hindsight.
I think we have 6 years of pent up demand from people that want to live here, how that plays out is anybodies guess.

[Steve Pickering]

As long as never lived in $200,000 Homes are going for $60,000 it should be a good investment. My Ex just signed a two year contract to rent her $60,000 Florence home for $1,600 a month. Right now higher end rentals are going for premium rental prices as newcomers are renting rather than buy, which is a smart move I might add. You might find a feed lot right down the road you didn't smell when the agent showed the house and he may have forgot to mention it.

[autism360]

In any case, if people are moving to here to escape Tsunamis, you'll have to accept that a certain percentage of people *leave* Phoenix because they're afraid of Black Widows, Scorpions, or Coyotes, Rattlesnakes, termites, HOA's, etc...

Those are not life threatening and did not cause loss of homes. How many people have been killed or lost their home by flooding,monsoons, Black Widows, Scorpions, or Coyotes, Rattlesnakes, termites, in Phoenix?
Now how many people were killed or lost their homes in areas where there are hurricanes,tornadoes,twisters,floods,earthquakes?

You will have to argue with Risk and Insurance,they did the research and collected the data.
Until your life has been put in jeopardy by a natural disaster I do not think It makes sense to converse about this topic.

For the third straight year, Risk & Insurance® presents the list of the 10 safest cities in the United States. The 2006 list remains intact--with a few notable exceptions. Sacramento, the No. 1 safest city for two years running, no longer holds that coveted position. In fact, the city's fallen off the list entirely.

The new top dog--pour the champagne, please--is Rochester, N.Y., which leapfrogged Phoenix for the No. 1 spot. Phoenix, though, remains at the No. 2 safest cities spot for the second year in a row.

About.com: http://www.riskandinsurance.com/story.jsp?storyId=13405757&query=safest%20cities

[Steve Pickering]

It is still a reason a lot of city dwellers leave as they expected city life in the desert.

[autism360]

It is still a reason a lot of city dwellers leave as they expected city life in the desert.

I have never seen any rattlesnakes, 2 scorpions, a couple black widows,no termites and I have been here for 6 years. I guess it depends on what where you live in AZ.
I saw a lot more bugs and pests in Florida and got bit by a recluse spider which was very unpleasant.
Come to think of it spiders,snakes,termites,HOA's exist pretty much everywhere,so why would people move away from Phoenix because of pests that are nationwide?
Phoenix has a well below average amount of rats,mosquitoes and other pests which is a big plus.

[MN-Born-n-Raised]

Originally Posted by autism360

We are in uncharted territory for real estate no one knows what will happen and if inflation kicks in what seems to be overpriced today could be a screaming deal in hindsight.
I think we have 6 years of pent up demand from people that want to live here, how that plays out is anybodies guess.

You could be right. I was defining the "investment" as SFH's and renting them out over the years. If you assume a good deal of appreciation from May 2nd going forward I suppose that it's a wonderful investment. I was saying that the "ship has sailed" for buying a SFH and getting it to cash flow. If you got in at the "bottom" then you are picking up positive cash flow especially in the below $100K homes. I was excluding appreciation in that investment statement. As prices climb, the attractiveness of the traditional cash flow diminishes. As I mentioned when it comes to rentals, SFH's are not the classification of choice. They don't have economy of scale.

So most people who have been buying them as an "investment" have been flipping them, rehabbing them, or renting them until they appreciate.

[autism360]

There are some good deals left on Homepath/REO properties where for the 1st 15 days investors cannot put an offer in giving the 1st time home buyer a huge advantage because they only need 3% down and they have a 15 day head start.

[makeitagreatday]

Apparently hedge fund corporations think so and are currently buying SFH by the bundles....of 1,000. They are simply planning on renting them out for the next 10 years until the expected turn around in our housing market.

My husband and a realtor were discussing it due to the fact that it will significantly change multi-unit investment rentals when the people that have lost their homes are now able to rent SFH for a few years and get their finances in order in the meantime. Many of these former homeowners, now renters, will choose SFH over multi-unit housing rentals.

[Howard Roark]

I keep wondering why a renter would choose a SFH over a multi-unit rental. I've rented both. I had nothing but bad maintenance from renting SFHs - of course because the landlord was out of town when something crucial broke.

I think those who want to go into the landlord business should spend at least five years renting SFHs themselves, and five years renting milti-unit rentals.

If you do not know what it's like, you have no basis on saying people prefer renting SFHs over multi-units.

I'm just cautioning you. As I write this I'm enjoying a pleasant sunset through the blinds of my multi-unit rental and hear nothing but the A/C. The green park and trees are my back yard and no one lives above me. Should my A/C quit, maintenance will fix it well within 24 hours, probably within eight hours when it's deep summer. Cannot say that for my past experience in SFH. I suffered through 95 degree plus indoor temperatures over a weekend and several different weekends in the hot months that happened. swamp cooler was on the roof and I had the upstairs unit. No ladder so I could not fix it myself.

Originally Posted by makeitagreatday

Apparently hedge fund corporations think so and are currently buying SFH by the bundles....of 1,000. They are simply planning on renting them out for the next 10 years until the expected turn around in our housing market.

My husband and a realtor were discussing it due to the fact that it will significantly change multi-unit investment rentals when the people that have lost their homes are now able to rent SFH for a few years and get their finances in order in the meantime. Many of these former homeowners, now renters, will choose SFH over multi-unit housing rentals.