Out-of-state investors creating boom in AZ rental marketPosted: Updated:
While the prices are starting to rise here, they are still a lot lower than years ago, which is attracting a lot of buyers to the Valley.
Just a year ago, people were struggling to sell their homes, but that is quickly changing.
Investors are moving in and snatching up properties as quickly as they're listed, and it's creating a boom in the rental market.
"Over the last few years as prices were declining, I thought I really should buy another place out here," said Rob Gerundo, an investor from the East Coast.
Quickly a second home turned into 13 properties. Twelve of them bring him in rental income.
"I have a good property manager, thankfully, I don't really get involved too much in the rental process, so it is working very well," said Gerundo.
Gerundo has his own theories to why Phoenix is looking like the place to be when it comes to investment properties.
"It's got low property taxes, low prices, and rents are very good," said Gerundo. "The court system is very good, so if somebody doesn't pay their rent, it's rather quick to evict them."
Torrey McHale works with buyers all the time, and right now the majority of his buyers are investors looking for the next deal, and those deals can be had.
"Especially under $150,000, we notice the properties are having multiple offers over asking price," said McHale.
Because of that, bidding wars can and will happen.
"There's a lot of buyers that have to lose two properties to realize that that's truly the case," said McHale.
Even though prices are certainly cheaper than they were a year ago, McHale said you will typically have to send more than the price of the unit alone.
"Paint and carpeting, maybe different type of flooring but even cabinets will be damaged, you'll have appliances that need to be added to the unit," said McHale.
Both men agree you might have to spend a little cash up front, but you should make your money back rather quickly.
McHale said, "They're seeing that they're making more money off of renting as well as investing in these properties and flipping these properties."
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