Best place for investment/rental property in Phoenix area? (Gilbert: rentals, mortgage)

[Captain Bill]

Originally Posted by SnowDesert

Captain Bill,

I don't live in the Arizona (Live in PA) and planning to purchase a single-family rental property (forclosed house) under 130K. I'm looking at Chandler or Gilbert (and perhaps some other areas). A few questions for you:

1) I noticed there are more 3BR houses for rent than 4BRs, should I buy a 4BR instead? Are 4BRs easier to rent out than a 3BR due to the available rental inventory?

A 4br will cost more money and may not bring that much more rent. As a rental, 3 br is better, in my opinion. That's what I have for a rental.

2) Now, the other side of question 1: Since a 4BR is more expensive, would I have a harder time renting it out at the price I want? or should I just stick with a less expensive 3BR house?

Yes, and yes that is what I would do.

3) Chandler and Gilbert seems to be centrally located and close to the freeways. Any recommendation as to where I should invest in? Chandler or Gilbert? Which one will give me a higher rental income?

Both are good areas. The homes in Chandler are a little higher priced than Gilbert

4) I've looked at Maricopa, Mesa, and Surprise. I can get a bigger and newer house at a lower price, but they seem a bit far. Would I have problem renting a house out?

Mesa is in the east valley adjacent to Gilbert. You may have meant Queen Creek which is farther east.

I don't know about Maricopa since i don't work that area. I don't work Surprise either but it isn't that far out of the city. Since I don't work those areas I'll address the east valley.

There is a lot happening in Mesa that will positively affect east Mesa and Queen Creek property values. There is a top cancer treatment center (MD Anderson under construction in east Gilbert with hospital rooms in Banner Gilbert Hospital, next door.

The Mesa General Motors Proving Grounds will be developed into a huge Gaylord Convention center, plus residential and business areas, a golf course, and it's to be a live, work, play community.

The freeway will have a loop coming off and go between the Mesa airport and the proving grounds, and over to Ironwood which will make it easier to get to Queen Creek.

A hospital is being built in Queen Creek.

The homes in QC are far below value, and the spread between those homes and Gilbert is too great. Some feel that spread will be narrowed soon.

If you have your rent at a little below market value it should be rented fairly quickly

5) Who will be my rental demographics in Chandler or Gilbert? For example, if there are lots of snowbirds there, retirees would most likely own a home; or if there's lots of young single people, they'll most likely not rent a large house; or if the house is too far and inconviently located, there'll be less renters; or if the houses on the outskirt of town are so inexpensive, renters might decide to buy a home instead, etc...

A 3 br in these areas will be families with 2-4 children. Some will be families who have lost their home to foreclosure.

6) Finally, my plan is for now purchase one good sized and nice looking home for around 130K, and lease it out, then in the future possibly use it for retirement; and also purchase another cheaper around 60-70K for investment purpose only. Do you think this is a good plan? or should I stretch out my money by buying 3 60K smaller properties in areas outside Chandler and Gilbert?

It's difficult for me to make that recommendation for you. In terms of what I would do; I would probably buy one that I would live in, and one to rent.

[varanj_16]

Trying to resurrect this thread in Nov 2017:

I am an out-of-state investor and looking to buy a SFR or townhome in Phoenix or sub-urbs with a max budget of 325K

Goal is 8+ rated schools, safe neighborhood, new construction and rental income to match as close as it can to my monthly PITI payments.

Please advice. I found a few new construction properties on Zillow but would appreciate local folks insights.

[JGMotorsport64]

Here's what you want:

A house under 245k in Tempe north of US60. You wanna strip and it, at the surface level, make it look nice. Now hint at renting that sucker and you'll have offers in minutes from whoever you want to rent to. If you do this right you'll have a nice supplemental income while you build equity in an area that will only get more expensive with time.

3 years ago I'd say do this in Central or East Central, but the market is pretty grim sub 290k right now.

[john3232]

Todays home prices make it difficult to buy as an investment. After factoring in operation cost I tend to doubt you'll see too much rental profit. Rents just aren't high enough.

My guess is those who can rehab properties themselves can still make out o.k.

Buy something beat-up, make it sparkle and resell for a quick $25 grand profit.

If you've got cash you might consider shooting out a mass mailing in hopes of landing an owner who needs the money and willing to make a quick deal. Unfortunately, I seem to get such a letter at least once a month so there's competition for this gig as well.

[Tall Traveler]

Originally Posted by bbb222

I'm planning to buy an investment property in metro Phoenix that I plan to rent out in the next few years with the view of retiring in Phoenix in the next decade, or selling the place instead if gains are significant. My budget is 150K (which I will pay in cash) and I'm thinking of a detached house in Gilbert or Chandler with the least possible property tax and HOA fees to pay.

What do you think of my plan? With the housing crash is it feasible to offer 150K in cash for a 200-250K listed property? How are the Gilbert and Chandler areas like for retirees (crime, golfing, activities, shopping, etc.)? And what about rental prospects? I know those are not exactly tourist destinations like Scottsdale. Or should I concentrate on Scottsdale/other touristy areas and get a condo or something within my budget there?

Also is it better value to buy a new home from the builder or buying resale?

Thanks for any comments/suggestions

Is your motivation primarily to invest and make a profit or to have a house to retire in or some combination?

I bought 2 houses at the bottom of the market in Maricopa and then 2 years later decided to buy 1 for ourselves when we retire so that we could live or winter there. The 2 I purchased strictly for a rental have been great for rents and have gone up about 80-90% above what I paid. The last one purchased has only gone up slightly but is still an excellent rental.

I'm getting ready to retire and we are having second thoughts about Maricopa to live/winter primarily because of limited services requiring frequent trips to Chandler or Scottsdale for fun. Hence my question. If it's primarily for you to have a place to live when you retire, buy in the location you want. For investment, I'll leave that to the experts but I would take a good look at Casa Grande considering the plans to have a Disney style resort there soon.

p.s. just realized the OP thread was in 2008...wonder what she/he did?

[locolife]

Originally Posted by JGMotorsport64

Here's what you want:

A house under 245k in Tempe north of US60. You wanna strip and it, at the surface level, make it look nice. Now hint at renting that sucker and you'll have offers in minutes from whoever you want to rent to. If you do this right you'll have a nice supplemental income while you build equity in an area that will only get more expensive with time.

3 years ago I'd say do this in Central or East Central, but the market is pretty grim sub 290k right now.

Under $245K in Tempe North of the 60 is becoming hard to find, I live in this area and keep seeing new listings for $300K plus. I'm sure they're out there but it is getting tight at that price.

[locolife]

Originally Posted by john3232

Todays home prices make it difficult to buy as an investment. After factoring in operation cost I tend to doubt you'll see too much rental profit. Rents just aren't high enough.

My guess is those who can rehab properties themselves can still make out o.k.

Buy something beat-up, make it sparkle and resell for a quick $25 grand profit.

If you've got cash you might consider shooting out a mass mailing in hopes of landing an owner who needs the money and willing to make a quick deal. Unfortunately, I seem to get such a letter at least once a month so there's competition for this gig as well.

We get this constantly in North Tempe, either through the mail, left on the porch and through email. Then you have billboards and radio ads of people willing to Pay Cash Today for your house.

[Hal Roach]

You can figure your home is worth about double what those clowns are offering, and just for fun, run their names through the Assessor's database and you will see they are almost all talk.

[varanj_16]

Originally Posted by Tall Traveler

Is your motivation primarily to invest and make a profit or to have a house to retire in or some combination?

I bought 2 houses at the bottom of the market in Maricopa and then 2 years later decided to buy 1 for ourselves when we retire so that we could live or winter there. The 2 I purchased strictly for a rental have been great for rents and have gone up about 80-90% above what I paid. The last one purchased has only gone up slightly but is still an excellent rental.

I'm getting ready to retire and we are having second thoughts about Maricopa to live/winter primarily because of limited services requiring frequent trips to Chandler or Scottsdale for fun. Hence my question. If it's primarily for you to have a place to live when you retire, buy in the location you want. For investment, I'll leave that to the experts but I would take a good look at Casa Grande considering the plans to have a Disney style resort there soon.

p.s. just realized the OP thread was in 2008...wonder what she/he did?

My motivation is to only buy a recently build (2007 onwards): SFR - which is in very good condition - in excellent neighborhood, so i can rent it to a financially stable family - i dont see myself ever living in arizona - i have property in southern california

[Newporttom]

Hate to derail the thread but when I saw Capt Bill's name I thought 'wow there's a name I hadn't seen for a while". He hasn't posted for a couple years and both his personal website and real estate web site links go nowhere.

He was over 80, so I'm inclined to think the worst. But a Google search didn't show anything. Anyone know his status?