Which are the good areas in/near Phoenix to buy an investment property in?

[Ashni Modi]

 I am starting out on my real estate investment journey and looking to buy an investment property in the Phoenix area. Which county/areas/cities in/near phoenix should I buy an investment property in? My budget is about 400K. Also, is it better to buy a new construction or resale? Is it better to buy a townhouse or single family home? 

[David Avery]

Single family home.

4 bedroom  2 full bathrooms.

Lots of area's in Mesa. ,Apache Junction, 

Get a great Agent, Contractor , Mentor .

Good luck Ashni. !

[Nadeem Alamgir]

Hey Ashni, curious as to why Phoenix? Have you considers any other states? 

[Josh Young]

@Ashni Modi I really like new construction SFH in Casa Grande, you can find properties that make great rentals from $300-400k, they have a 7% rent to price ratio with zero maintenance repairs or cap ex. Full disclosure: I'm a realtor and property manager and have been helping my clients buy these and then I take them over for management after they close.

[Noah Corwick]

Hi Ashni, 

It'll all depend on what parts of PHX you are aiming to be in and what your investing strategy is. 

A SFH for $400k would likely land you in Glendale, Peoria, Mesa, Apache Junction. Slightly outside of PHX you could buy into San Tan Valley, Queen Creek and Casa Grande. So just depends on how central you want to be.

A few benefits of a Townhouse vs a SFH is that most Townhomes will be less expensive, and a lot of their HOAs cover the exterior and font landscaping of the home. IMO if you can get a SFH, get a SFH though.

[Ashni Modi]

Quote from @Account Closed:

Quote from @Ashni Modi:

 I am starting out on my real estate investment journey and looking to buy an investment property in the Phoenix area. Which county/areas/cities in/near phoenix should I buy an investment property in? My budget is about 400K. Also, is it better to buy a new construction or resale? Is it better to buy a townhouse or single family home? 

Need to know more about your goals. Best locations are zip code and neighborhood specific. Are you looking for cash flow, safe neighborhood or bringing a property out of the abyss to perfection?

 Hey Ken, yes I want it to have a positive cash flow, safe neighborhood but don't plan to flip the house. Is it better to buy a resale home in a good zip code or a new construction in a developing area? Are surprise, good year, buckeye good areas to buy pr should I stick to chandler,  Mesa, etc? Do you have other recommendations?

[Noah Corwick]

Quote from @Account Closed:

Quote from @Noah Corwick:

Hi Ashni, 

It'll all depend on what parts of PHX you are aiming to be in and what your investing strategy is. 

A SFH for $400k would likely land you in Glendale, Peoria, Mesa, Apache Junction. Slightly outside of PHX you could buy into San Tan Valley, Queen Creek and Casa Grande. So just depends on how central you want to be.

A few benefits of a Townhouse vs a SFH is that most Townhomes will be less expensive, and a lot of their HOAs cover the exterior and font landscaping of the home. IMO if you can get a SFH, get a SFH though.

I think people don't understand just how big the Phoenix area is. It's more than one Teepee and a wagon. There are a lot of good areas to invest.

Yeah very true. With the success of Surprise and Queen Creek, the valley will only get larger and expand. Soon places like Wittmann will be part of the greater PHX area haha. 

[Kyle Gardner]

It all depends on if you want cash flow or stability/appreciation. Or what combination of both? The new builds in the outskirt towns are fine and if you buy with a primary loan, you can get a great interest rate. But I don't see them appreciating in value as much as fully developed cities in the metro. Buckeye, San Tan, Florence, Casa Grande: they all have an abundance of land for any builder to construct a new house, so the land holds very little value, thus lowering the chance of appreciation. 

I really like East Mesa and Apache Junction. There are pockets of rundown areas but it's close to the freeway and much closer to the Phoenix metro than the outskirt towns. It'll take a few years but I think this area is going to show steep appreciation over the next 5 years and you can get a decent place that'll cash flow a little right now, more if rates drop and you refi and best of all, high appreciation over the next 5-10 years. 

[John Morgan]

Will 350-400k SFR in the PHX area cash flow? How much would market rent be for something like this? 3k/month at least I would hope?

[Josh Young]

Quote from @John Morgan:

Will 350-400k SFR in the PHX area cash flow? How much would market rent be for something like this? 3k/month at least I would hope?

No, our property taxes and insurance are much lower than other states and you have basically no maint/repairs/cap-ex since they are brand new. Rent around $2k/month will break even or be a little positive if you put 25-30% down. You still have to hunt for the right deals, but they are there if you know where to look.

[John Morgan]

Quote from @Josh Young:

Quote from @John Morgan:

Will 350-400k SFR in the PHX area cash flow? How much would market rent be for something like this? 3k/month at least I would hope?

No, our property taxes and insurance are much lower than other states and you have basically no maint/repairs/cap-ex since they are brand new. Rent around $2k/month will break even or be a little positive if you put 25-30% down. You still have to hunt for the right deals, but they are there if you know where to look.

That’s amazing that 2k/month rent will cash flow you or break even on a 400k house with only 25% down! Maybe I need to look to invest there. The numbers just don’t work where I live. On a 400k house here I’d need to bring in at least $3300/month to break even with a 7.5% interest rate on a 30 year mortgage. 

[Josh Young]

Quote from @John Morgan:

Quote from @Josh Young:

Quote from @John Morgan:

Will 350-400k SFR in the PHX area cash flow? How much would market rent be for something like this? 3k/month at least I would hope?

No, our property taxes and insurance are much lower than other states and you have basically no maint/repairs/cap-ex since they are brand new. Rent around $2k/month will break even or be a little positive if you put 25-30% down. You still have to hunt for the right deals, but they are there if you know where to look.

That’s amazing that 2k/month rent will cash flow you or break even on a 400k house with only 25% down! Maybe I need to look to invest there. The numbers just don’t work where I live. On a 400k house here I’d need to bring in at least $3300/month to break even with a 7.5% interest rate on a 30 year mortgage. 

 On $400k rent is a little higher than that, but it’s going to be hard to make the numbers work if you spend that much, I would stick to the stuff that’s between $300-350k, that’s where the best price to rent ratio is. Basically 7% of the purchase price in annual rent is what I look for. You also will need to buy the rate down lower than 7.5%, but the builder will give you 2% of the purchase price in a credit to help with that.

[Jay Thomas]

With a $400k budget, your choice of Phoenix is excellent as it's a thriving market. In Maricopa County, encompassing Glendale, Mesa, Tempe, and Chandler, you'll find diverse options balancing affordability and rental potential. Alternatively, Pinal County, with areas like Casa Grande and Maricopa, offers slightly lower property values but promising growth. When deciding between new construction and resale properties, consider the advantages of warranties and modern features versus potential savings and immediate occupancy. Similarly, weigh the benefits of lower maintenance and potential appeal to young professionals with townhouses against the privacy and higher rent potential of single-family homes. Ultimately, your investment goals will guide your decision.

[Greg Klei]

Long term Ive been looking close at Mesa. Arizona State University has been putting a lot of money into their downtown area. Finding places that cash flow has been the tougher part lately!

[Stone Jin]

@John Morgan. 400k house would generate $2200 in monthly rents. Very difficult to cashflow in phoenix metro unless you have some niche or large down payment.

[Dmitriy Fomichenko]

@Ashni Modi,

I'm not sure if now is the best time in Phoenix. 11 years ago, I purchased SFR for $110K in Phoenix metro, which is currently worth about $380K, so I think that the market is at the top now and will correct. But there are other areas where your dollars can serve you better. Talk to @Scott Pastel, his team has access to several markets across the US and then decide which one is best for you.