Next City To Buy Low for Good Return in Future (Phoenix: apartments, rental)

[asufan]

Originally Posted by john3232

The OP is asking about buying low for a good return in the future which I equate with investment property.

On the other hand if the OP is thinking about buying a home to live in my feeling is now is a good time.

My guess is home prices will continue to show steady appreciation in much of the Phx metro.

Interesting, you see steady appreciation but say it's not a good time to invest. Earlier in the thread you predict 4-7%, which is pretty solid actually, especially in leveraged real estate. If I put $50k down on the $250k house and rent it out with positive cash flow and it appreciates 4%, I've made 20% on my $50k investment without even considering the positive cash flow. Not to mention the compounding appreciation and loan amortization as a few years go by. I'll take it.

[sh9730]

Also, not to throw a wrench into all of this - but - with the new tax law and the expanded standard deduction - for 90% of people there will no longer be a TAX incentive to buy vs. rent. Granted there are still benefits that some will appreciate vs. renting - but hard to tell how much of an effect this will have on the overall RE marketplace.

A Phoenix company "Progress Residential" may have the right idea - they are buying single family homes all over the country and then RENTING them all out...

[john3232]

Originally Posted by asufan

Interesting, you see steady appreciation but say it's not a good time to invest. Earlier in the thread you predict 4-7%, which is pretty solid actually, especially in leveraged real estate. If I put $50k down on the $250k house and rent it out with positive cash flow and it appreciates 4%, I've made 20% on my $50k investment without even considering the positive cash flow. Not to mention the compounding appreciation and loan amortization as a few years go by. I'll take it.

Today I would only buy a single family home as investment property if I were confident I made money on the transaction. A rehab? Perhaps if the price was right, if I had a contractor lined up and a good idea of the repair cost.

[Ponderosa]

It has been my impression from living in various parts of the valley that homes in nice established neighborhoods appreciate more than those on the fringes (recovery exception, of course). On the fringes you are competing with builders and dealing with buyers who are in the 'drive till you qualify" demographic. Established areas look nicer, have more amenities, bigger lots and greater stability.

[vipbrando]

Parts of Sunnyslope and the surrounding areas to the north (towards Thunderbird) around the mountains (North Mountain area) are a great value. It has all the ingredients for a boom. It has been this way for a few years now, but it just hasn't happened. Long-term, I'd put my money there. Also, the historic neighborhoods in East Phoenix (Thomas to Indian School, east of Central) have already exploded but there's more room for further increases I think. And, the historic areas downtown, a few blocks either way of central around Roosevelt.

South Scottsdale should continue a good appreciation. Historic Mesa also has some really charming neighborhoods that I think are undervalued.

There's some solid neighborhoods in north-central Glendale (think 85304, 85306) that have climbed 12% last year alone.

When the bubble bursts, it's the fringe and outskirts that take the hardest hit. Queen Creek, Gilbert, Chandler, San Tan, etc. It's mainly a location issue.

[MN-Born-n-Raised]

Originally Posted by Ponderosa

It has been my impression from living in various parts of the valley that homes in nice established neighborhoods appreciate more than those on the fringes (recovery exception, of course). On the fringes you are competing with builders and dealing with buyers who are in the 'drive till you qualify" demographic. Established areas look nicer, have more amenities, bigger lots and greater stability.

Which goes along with my theory that land appreciates (not the physical home itself). If the home (not the dirt) goes up in value, more often than not, that meant you spend thousands to keep it up to date. Hence, it didn't appreciate. So given a choice, give me a new home over an older one. Unless of course the home has "character" which has been missing for the past 50 years.

But as you say, there are exceptions. Like the crash to the recovery, flipping homes, and a few other examples. For whatever reason, people struggle to understand just home many thousands of dollars it cost to keep up on a home.

[bryans1620]

One thought, the west side of the Maryvale area (think 101 and Indian School) is still low priced, but saw approximately 11% annual value increase over the last 12 months.

This area has more newer homes and less distressed properties than some of the surrounding areas.

[patrick85395]

Originally Posted by World Traveler .

Buckeye feels too far away from Downtown Phoenix, and is too rural at the moment. No signs of suburbanization in the city layout.

Lastly, Buckeye is flat and doesn’t offer any scenic backdrop, so Northern Phoenix area is more likely to grow/sprawl out in that direction for more desirable land.

Flat? You must've missed the white tank mountains.

I still vote Buckeye for a potential upside...and remember you heard it here first. Based on comps, my rental property there is up about a conservative 24% in the 3 yeas that ive owned it. It's a 3/2, 2000 sq ft rented for $1850/mo.

[DetroitN8V]

Originally Posted by patrick85395

Flat? You must've missed the white tank mountains.

I still vote Buckeye for a potential upside...and remember you heard it here first. Based on comps, my rental property there is up about a conservative 24% in the 3 yeas that ive owned it. It's a 3/2, 2000 sq ft rented for $1850/mo.

High risk tenants or what? That’s an easy $300/mo above market.

[patrick85395]

Originally Posted by DetroitN8V

High risk tenants or what? That’s an easy $300/mo above market.

Nope...I dont do high risk tenants. Rent was 1650 three years ago and I've increased every year. This renter took it for two years at that rate. The home is located well within the community and is one of a handful with pools. It's quite nice and is worth every dime. That's why I bought it. There are other homes without pools, not as well located getting a few hundred/month less.

My bigger point is that Buckeye has an upside and folks who spend all of there time on the east side don't see it...I understand that...the west is on the rise That's how I see it.