Sedona, Arizona Vacation Rentals

[Chad McMahan]

Within the last 6 months, the real estate market in Sedona, AZ has changed from an average time on the market of 3 months, to a month or less on the market. We are now seeing multiple offers at or above asking price for homes priced at fair market value that have a desirable floor plan and are turn-key. As a result, we are seeing the start of a strong appreciation trend.

In 2016, a law was passed, removing city and county control over rental time frame restrictions. Now these restrictions are in the hands of local HOA's. Suddenly, there are great vacation rental candidates in Sedona, in a market where there are not enough short term rentals, to meet the demand. There are still many HOA's that limit rentals ( 1+ month, 6+ months, 12+ months) at this time, but quite a few completely flexible great choices on the menu. As an example, owners at one Sedona condominium PUD recently voted to reduce the rental restriction from 6 months to 1 night. This subdivision has become a hot potato in our local paradise. And it is in the lowest price range.

Typical vacation rental returns (Assuming financed purchases, not cash):

Sedona vacation rental property management companies concur occupancy should be 55-85% through the year. These companies charge 20% of gross monthly income. I expect by the end of 2017 the estimation will be revised at 65% - 90%.

[Jimmie Boyette]

Hey Chad, Do you know much about the status of vacation rentals in the Village of Oak Creek? My family and I have been living here for a year and a half now. We love it here and want to start investing in rental properties and airbnb properties. I know the HOAs here are not too excited about airbnb. But I haven't found any clear rules/laws. I know there are many airbnbs here. I'm still learning the area and would like to connect with you.