Looks like Phoenix home prices may be finally going down folks. (Mesa: fit in, apartment complex)

[Valley Native]

Originally Posted by Greenvalleyfan

Yeah, but I haven't. I've made money on the homes I sold. I didn't buy them to make money and I didn't buy them to lose money. I bought them to live in because renting is throwing your money away. And, as I said in a previous post, rentals attract transient type people that don't have any stake in an area and most people that rent aren't the people that I would want to live with. Rental apartments bring down value in an area, home ownership brings up value.

Definitely agree with these points. It's usually very easy to tell which houses are occupied by renters vs. those who own. Since buying a house is essentially an investment involving a large amount of money, ownership often translates to taking pride in the appearance & upkeep of the residence.

One of the rules of renting is: treat the place like it's your own. Unfortunately, many renters don't follow this simple courtesy. They often refuse to do as little as pulling weeds or painting when needed, and then blame the landlords for the condition of the residence. Of course, not all renters are slackers, and not all homeowners are pillars of the community ... however, it's very true that a neighborhood occupied mostly by rentals is sure to bring down the overall value in the area.

[jdahunt]

Originally Posted by Valley Native

Definitely agree with these points. It's usually very easy to tell which houses are occupied by renters vs. those who own. Since buying a house is essentially an investment involving a large amount of money, ownership often translates to taking pride in the appearance & upkeep of the residence.

One of the rules of renting is: treat the place like it's your own. Unfortunately, many renters don't follow this simple courtesy. They often refuse to do as little as pulling weeds or painting when needed, and then blame the landlords for the condition of the residence. Of course, not all renters are slackers, and not all homeowners are pillars of the community ... however, it's very true that a neighborhood occupied mostly by rentals is sure to bring down the overall value in the area.

The same can be said about HOA and non HOA communities.......you can instantly tell by how the property is kept up.

I won't live in a non HOA community......people are surprised but I never have any issues with an HOA but I sure would with neighbors who didn't take care of their property.

Its crazy for landlords not to just add the yard care into the rent.....its the same with rentals with pools....why would they trust the homeowner to take care of it......do it yourself and add it in.

The 2nd house we bought in Phoenix didn't have an HOA, I hated it and got rid of the property.

[asufan]

In my opinion, it all has to do with price point. My wife and I have 7 rentals. The two in Chandler and two in Gilbert are in HOA communities. Two in Scottsdale are non HOA and one in Mesa is non HOA. All but the Mesa property are in high dollar areas with good schools and very high rent compared to many parts of the valley. If someone can pay $2,500-$3,500/mo in rent, they tend to be more responsible people. The one I have in a low rent part of Mesa has been occupied by the same family for years and they treat it like it's their own. I would love to be able to sell it to them someday. I know I'm lucky with this tenant.

The example I made above about a wholesale house in Maricopa, it was trashed by tenants. The lower end starter home type properties can be the problem for landlords so I steer clear of those properties unless it's a fix and flip. My formula works well for not only quality of tenant but also appreciation because they are in desirable areas.

[jdahunt]

You can tell when you cross the line into Scottsdale by just how clean and nice it seems....reminds me of driving into Beverly Hills or Santa Barbara......even the air smells nicer...lol

Although on our last trip to Santa Barbara we did see quite a few tweakers out during the middle of the day.

[john3232]

HOA or no HOA I periodically drive past my properties esp. during the rainy season. Although the lease agreement specifies the tenants are responsible for front/back landscape I will trim the pigmy palm trees if I see dead fronds. I also test the irrigation system to make sure it's working properly.

Own two homes in Gilbert and two in Chandler. All four properties are under HOA and renters are white collar professionals. I have two Mesa rental properties one with and one without an HOA. One couple moved to Mesa from Scottsdale (both work remote) and the other recently moved to AZ from Colorado.

I also live in Mesa two blocks from my Mesa rental without an HOA. For the most part where I live in E. Mesa is fine. Not upscale like many of the areas in Gilbert or Chandler but quiet, family oriented and with easy access to the 60 freeway.

However... all it takes is a few home owners to neglect their front landscape to affect home values. I've seen large palm trees which haven't been trimmed since I moved here in 2/1/19.

[MN-Born-n-Raised]

Originally Posted by asufan

In my opinion, it all has to do with price point. My wife and I have 7 rentals. The two in Chandler and two in Gilbert are in HOA communities. Two in Scottsdale are non HOA and one in Mesa is non HOA. All but the Mesa property are in high dollar areas with good schools and very high rent compared to many parts of the valley. If someone can pay $2,500-$3,500/mo in rent, they tend to be more responsible people. The one I have in a low rent part of Mesa has been occupied by the same family for years and they treat it like it's their own. I would love to be able to sell it to them someday. I know I'm lucky with this tenant.

The example I made above about a wholesale house in Maricopa, it was trashed by tenants. The lower end starter home type properties can be the problem for landlords so I steer clear of those properties unless it's a fix and flip. My formula works well for not only quality of tenant but also appreciation because they are in desirable areas.

Absolutely ^^! The price/rent that you can command over the average instantly sorts out the quality of people. Let's take a look at something as simple as a hotel room. They are all "renting". Budget hotel rooms attract a certain demographic. It's blatantly obvious. As a frequent renter of hotel rooms, I need to spend more $$ so I am not sleeping in the same bed as someone with bedbugs and bad hygiene.

When I rented out our homes by the week, I tweaked out our properties and charged accordingly. Over several years with about $500K worth of rental income in our condo in Mazatlan, our lake home, and our Surprise AZ rental, I had under $500 worth of damage (a curling iron was left on the cultured marble top, and a fat guy who broke our sleigh bed in MX). The homes were arguably perfect after all of those rentals. I knew who to rent to by using a formula. One important factor was to "Follow the money".

[MN-Born-n-Raised]

Originally Posted by jdahunt

You can tell when you cross the line into Scottsdale by just how clean and nice it seems....reminds me of driving into Beverly Hills or Santa Barbara......even the air smells nicer...lol

Although on our last trip to Santa Barbara we did see quite a few tweakers out during the middle of the day.

Because there are POS, run-down areas of Santa Barbara. But I know what you are saying.

[MN-Born-n-Raised]

Originally Posted by DAXhound

I enjoyed living on 8th st., sort of, but I paid 18500 in late 2010 and zillow now says 382000...there was an addition to the 430 SF house..which was just thrown up. Rented at 1650. No way in Hell, err I mean Phoenix that I would want to be a mortgage slave..I almost hate to say it, but NorCal was a lot more fun, but nothing compared to Chiang Mai, in its heyday..now somewhat ruined by pollution, a military dictator, and hordes of Chinese tourists..but even the Chinese girls weren't pigs, but a number of Chinese had found themselves on youtube, crapping in the street. You all will look a lot smarter when we get our first foot of snow in Wyoming...nat gas is thankfully quite cheap up there, though. Water and heat issues? Not a problem in Vegas, either, lol.

I should probably add that back in 2012, I predicted my shack would be worth more than Minnesota's stucco monstrosity in Surprise....i was joking somewhat...but here we are
.and the commutes from Surprise still suck, while it has always been tolerable in Midtown.

I have no idea what you are talking about in your 1st paragraph. As for the 2nd paragraph, the Zillow value of the house I sold in Surprise says it is worth about $650K. I paid about $190K. And no one put on an addition. A $18,500 house bought in late 2010 must have been a real beauty!

[MN-Born-n-Raised]

Originally Posted by WanderingRebel

Not really. Those things tend to work themselves out over time. Rental money is just paying someone else's mortgage. You'll never get that money back.

https://fred.stlouisfed.org/series/ASPUS

If you are borrowing money, you are making the bank rich. If you have your house paid for, then you are forgoing the opportunity to invest in something else. In other words, there is no free lunch.

[MN-Born-n-Raised]

Originally Posted by jdahunt

Home rental prices have been dropping along with home prices as the inventory for rentals is also going up.

We are going to be renting for the next couple of years........just from 2 months ago a house that was $3,500/month is now $3,000/month and the time on market is 30-45 days to lease.

I don't mind paying $36-40k in rent a year as I expect the same house value is going to drop a lot more than that year over year.

When I switched my residence to AZ Jan 2021), I needed 2 years before I can dodge my $500K of capital gains appreciation. So for me, making $500K and paying those massive taxes didn't make sense.

If I had $500K tax-free gains and if I sell, that pays for a lot of $5K a month of fully furnished rent. This brings me to my question. Why don't you rent something furnished and cherry-pick the ideal months? If I was to rent, I'd want to be even less hassle-free.

Currently, in our hood, there are about 20 homes for sale. A lot of people are trying to cash in. 60% of the neighborhood were cash buyers and I bet nearly 100% could be if they wanted to. I see some price reductions. But they are still being sold including one for >$3M. Specifically in our neighborhood, I just don't see a pending 20% price cut coming unless the wheels fall off the economy. Something massive needs to happen for values to drop that much. Though I see that happening in Buckeye, and other outer burbs.