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Is Phoenix a stable area to buy for a second income property?

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December 09 2011 - Phoenix
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You bet!  The people who, unfortunately, are losing their homes need places to live and are having to turn to rentals.  While a lot of investors have bought in the valley, there are pockets where rental demands are still quite high.  
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December 20 2011
I presently own 8 investment properties in Phoenix. There are opportunities here, but do not believe the hype and vague statements on this post.

Vacancy rate. Currently, the metro has a vacancy rate of around 10%. This is a pretty bad vacancy rate, and means getting homes rented is challenging. It is improving, from last years 12%, but anything over about 7% makes land lording a tough business, and price increases impossible.

rents are stable, currently. This is a huge improvement over 2 years ago, when they were dropping swiftly. NOTE they have not recovered all the value they have fallen. I am renting places for their 10 year ago rents, though I do have all of them rented.

rents in phoenix are very low. I rent 3/2 condos for 750 to 900 depending on their location, and my places are always better upgraded then the competition, because that is what I do. I have the skills to do this cheaply, you do not want to compete with me if you are hiring workers on a unit near me, you will be spending much more money. 

In many parts of this valley, homes are for rent so cheap that it would make any price a tough prospect. Places like queen creek, maricopa, far east suburbs all around the valley, 2000 ft^2 homes are for rent under $1000. The cost and time to repaint, recarpet, after a tenant left, and the high vacancy rates in these areas would make renting difficult even if someone gave you the home. 

I have lived here and invested here for 20 years. I know the market. An out of towner could easily get seduced by apparent prices and rents, and then end up taking an utter beating on investments here, especially if paying a property management company too. 

 
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December 16 2011

Yes, the rental market is very lucrative.  Most rental homes are only on the market for a few days because of the high demand.  This rental demand is created because of the number of people that have gone through short sales or foreclosures and cannot qualify for a home loan.....their only option is to rent.  Currently you can purchase some great homes for great prices and have them rented out making money within 30 days or less! 

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December 16 2011
It is a tough market for current homeowners who want to see a home but for an investor it is a golden market.  If you are looking for income in the real estate market Phoenix, AZ is the place to be.
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December 09 2011
I have more investor and second home buyers than owner occupants in the Phoenix market. The rents are very stable in most areas as are the home prices.
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December 09 2011
Yes...in fact, there's a great blog regarding local market conditions and the "bottom of the market" on my website.
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December 09 2011
It certainly is,
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December 09 2011
 
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