Scottsdale vs Tempe which is best to make money with VRBO

Scottsdale vs Tempe which is best to make money with VRBO

Member since 2023 · 2 posts · 2 votes

Hello, I am a new investor that has to do at 1031 Exchange rather soon. We have narrowed it down between Scottsdale and Tempe but I'm also considering Chandler snd/or Gilbert In Arizona. From what I've read these areas should be fantastic for more of a short to long-term investment. I believe Gilbert might be turning into a Old Town Scottsdale if I'm not mistaping? I am wanting to purchase a three bedroom two bath home with a inground pool and air conditioned home. We don't mind somewhat of a fixer we have flipped many homes to get to where we are at. This is my dilemma, I would like to keep the VRBO as busy as I can to make the most that I can. We will also utilize it as Snowbirds as needed. Our end goal will be to live in Scottsdale later down the years. With that being said we are interested in Tempe and Scottsdale because of the party scene, people like that party scene with restaurants and nightclubs, the mini Vegas so to say. I think Chandler is a great up and coming area because of Intel and the professionals that would be renting. I think Gilbert if I'm not mistaken is changing ito the nightclubs ad well?  We would be renting to professionals/adults as a short-term and/or midterm rental market. I like Tempe because of ASU. The party scene people like when they vacation. However, I would never rent to students only to parents and sports players. Golfers,players coming in for spring training. Etc. We've thought of doing midterm in all areas meaning over 30 days we do not want anything renting as a long-term rental. We have been burnt severely, it took us a year to get someone out with $30,000 worth of damage in addition to $30,000 in attorney fees. Where do you think it would be best for us to purchase this home with our 1031 exchange to make the most money we can. We are on fixed incomes with disability so this extra income would be perfect for passive income for us. I would like to utilize some of the space as well so we will lock out the garage for our own personal belongings. Any advice would be so helpful as we are very new to this area and as an investor. Thank you in advance whatever helps will be very helpful to us.

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Mason WeissBusiness Member
Realtor · Phoenix, AZ · Member since 2021 · 524 posts · 241 votes
3y

Hi @MiChelle Murdock, with potential heavy STR regulations coming to Scottsdale, plus over saturation of short term rentals, I would focus on Tempe. Gilbert and Chandler are decent investment areas but still highly suburban and more geared towards mid term and long term renters. If you don't want to wait five years to start generating extra income, I would want to be close to Tempe where renters can easily visit Scottsdale and Phoenix and you would have the largest potential renter pool.

I own a short term rental company and just helped someone find a new short term rental two weeks ago here in Arizona. If you want to talk further let me know!

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  • Noah CorwickPro Member
    Realtor · Phoenix, AZ · Member since 2021 · 276 posts · 117 votes
    3y

    Hi MiChelle!

    I am a huge believer in Gilbert. I like to coin downtown Gilbert as turning into a more family friendly old town Scottsdale. That whole strip still has a lot of space and potential for new trendy bars and restaurants to open up as well. Gilbert's rental prices are some of the highest in the Valley as well, which speaks well to your goal of using it as a STR/MTR.

    As for the Chandler vs Gilbert thinking, I personally believe Gilbert has a lot more upside and fits attracting more of the party vibes (specifically near downtown) that you are seeking. 

  • Mason WeissBusiness Member
    Realtor · Phoenix, AZ · Member since 2021 · 524 posts · 241 votes
    3y

    Hi @MiChelle Murdock, with potential heavy STR regulations coming to Scottsdale, plus over saturation of short term rentals, I would focus on Tempe. Gilbert and Chandler are decent investment areas but still highly suburban and more geared towards mid term and long term renters. If you don't want to wait five years to start generating extra income, I would want to be close to Tempe where renters can easily visit Scottsdale and Phoenix and you would have the largest potential renter pool.

    I own a short term rental company and just helped someone find a new short term rental two weeks ago here in Arizona. If you want to talk further let me know!

  • Flipper/Rehabber · Phoenix, AZ · Member since 2016 · 254 posts · 100 votes
    2y

    @MiChelle Murdock

    I will echo what @Mason Weiss said and would personally stay away from Scottsdale. Too many variables that are out of your control. Not to mention, the cost barrier to entry is much higher than the other areas. I have a short term rental in Tempe, 2 miles from Mill Ave and ASU that does very well. That said - I bought it in 2019 and my interest rate is 2.25%. It would be much tighter if I had purchased in today's market with today's rates.

    Chandler and Gilbert are viable options. I have other investor friends with short term rentals in these areas that do very well, especially the size of home you have described. While location is certainly an important factor, there are a lot more variables to running a successful STR that will help you stand out from the others in your area and keep you profitable.

    Do you plan on managing yourself or hiring a property manager? Keep in mind that property managers for STRs are much higher than that of LTRs (I have seen anything from 15-25%) since they are a lot more hands on. You mentioned "passive" income which can be highly subjective when running STRs, whether you are self managing or not. Just wanted to let you know that this niche will require more of your time than other more "passive" strategies. But it's worth it!!

    Good luck! Please post any further questions. This forum hosts a wealth of knowledge and a lot of investors willing to help.

  • Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    2y

    Be careful we are seeing some softness with tech workers in Tempe. We do apartments in Tempe and Phoenix so can see the difference.

  • Member since 2023 · 2 posts · 2 votes
    2y
    Quote from @MiChelle Murdock:

    Hello, I am a new investor that has to do at 1031 Exchange rather soon. We have narrowed it down between Scottsdale and Tempe but I'm also considering Chandler snd/or Gilbert In Arizona. From what I've read these areas should be fantastic for more of a short to long-term investment. I believe Gilbert might be turning into a Old Town Scottsdale if I'm not mistaping? I am wanting to purchase a three bedroom two bath home with a inground pool and air conditioned home. We don't mind somewhat of a fixer we have flipped many homes to get to where we are at. This is my dilemma, I would like to keep the VRBO as busy as I can to make the most that I can. We will also utilize it as Snowbirds as needed. Our end goal will be to live in Scottsdale later down the years. With that being said we are interested in Tempe and Scottsdale because of the party scene, people like that party scene with restaurants and nightclubs, the mini Vegas so to say. I think Chandler is a great up and coming area because of Intel and the professionals that would be renting. I think Gilbert if I'm not mistaken is changing ito the nightclubs ad well?  We would be renting to professionals/adults as a short-term and/or midterm rental market. I like Tempe because of ASU. The party scene people like when they vacation. However, I would never rent to students only to parents and sports players. Golfers,players coming in for spring training. Etc. We've thought of doing midterm in all areas meaning over 30 days we do not want anything renting as a long-term rental. We have been burnt severely, it took us a year to get someone out with $30,000 worth of damage in addition to $30,000 in attorney fees. Where do you think it would be best for us to purchase this home with our 1031 exchange to make the most money we can. We are on fixed incomes with disability so this extra income would be perfect for passive income for us. I would like to utilize some of the space as well so we will lock out the garage for our own personal belongings. Any advice would be so helpful as we are very new to this area and as an investor. Thank you in advance whatever helps will be very helpful to us.


     Thank you everyone for such fantastic advice.  I appreciate you taking the time in helping  me. 

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