Time to buy a house in Phoenix, A?

18 Replies

Hello good people,  I am pretty much new to real state. I know its a million dollar question, is it good time to invest into a new house, i am first home buyer, i am want to go for it as a long term investing.  Heard lots of advise, but looking for an advise from some expert here. Thank you

Don't do it.  Find another investment with a higher rate of return and lower owner involved problems.

I have 23 STRs in this town.  Dealt unusual problems like prostitutes, overdoses, break ins, etc.  Plus normal problems like roof leaks, broken central heat or air, plumbing, etc.  You can too if you choose to invest in real estate.  But don't let that discourage you.

@Paul Sandhu , lmao.  I should sit down and write a book w you if you haven’t written one already!  I’m sure your stories are both priceless and scary.

And probably amusing & sad.

The most ‘action’ I’ve seen is 20 trash bags of trash on move out.  I’m ‘sheltered’.  Lol.

But I can tell some great stories about crazy applicants.  Some ppl will say almost anything!

Then what should i do, rent an apartment? Should i wait until next year?  I stopped doing stock; so no investment there. It is actually to liv, it is not for rent or business. At least this one for couple of years.


Originally posted by @Paul Sandhu :

Don't do it.  Find another investment with a higher rate of return and lower owner involved problems.

I have 23 STRs in this town.  Dealt unusual problems like prostitutes, overdoses, break ins, etc.  Plus normal problems like roof leaks, broken central heat or air, plumbing, etc.  You can too if you choose to invest in real estate.  But don't let that discourage you.

@Surya Poudel it is a great time to invest in Phoenix! I am both a local investor ( I own & manage a fleet of 20 rental properties in the Phoenix/ Scottsdale market) and a realtor that specializes in helping find investment properties with both upside potential and strong future cash flow potential. We have seen signficant growth in the Phoenix market in the last several years, and it has been a very hot rental market.

My properties on average yield annual cash on cash returns of 25-30%. I am a buyers agent that helps my clients find the best opportunities in the Phoenix market to either follow my STR (short term rental) strategy, or great long term investment properties.

If you have any questions at all, feel free to reach out for any guidance. I am always here to answer any questions you may have!

Best,

George

I’m an investor and realtor and one of my regrets is not holding on to some of my real estate. As you mentioned, you’re keeping it long term so go for it!  Let it appreciate as you pay it down.  There’s great lending programs for 1st time home buyers if you have little cash. 

Paige

As a realtor, re investor and a native to Arizona I would caution you against investing in something you may not fully understand. Phoenix is the 5th largest metro in the country...to say that now is a good time to invest in Phoenix as a blanket statement is pure conjecture. It’s critical to evaluate your risk tolerance, skill set, experience, etc, Beyond that it is likely wise to understand the economics of return you expect, the length of your anticipated investment period, and a myriad of other elements. I hope this is helpful. 

Regards,

Whitney

@Surya Poudel buying your primary residence is always easiest, in terms of finding the property and obtaining the most favorable financing. Interest rates are once again at near historical lows, so from that point of view it may never again be as good a time to buy and lock in a low 30 year fixed rate. 

Any property you want to buy/live in should first and foremost meet the needs of your family in terms of a place to live and grow, but I always look at my primary residence from an investment standpoint as well. Will it appreciate in value? Would it make a good rental should my family needs change? 

You have several strategies when looking at a primary residence as a long term investment:
1) Convert some or all of the property to short term rental (maybe even while you're living there)

2) Move out and make the property a long term rental (the first of your portfolio!)

3) Live in the property with roommates and let their rent subsidize your mortgage and utility expenses 

Yes, you can have problems with rentals. Yes, you can have maintenance issues with a primary residence. Yes, everything can go wrong. But that is the nature of real estate! Personally, I always encourage people to start investing sooner rather than later. Appreciation is a big factor in Phoenix right now. Waiting a year will not only cost you rent money, but also the appreciation you WOULD have gotten in that time. I can't say for sure what's right for you, but I will say that you should SERIOUSLY consider buying your primary residence as soon as you are able. 

Disregard my first statement.  The response was made under the assumption that you were buying a house in order to rent it out, and this was your first time.  

But if it is an owner occupied property, by all means, go for it.  Questions like yours don't come up very often in a Vacation and Short Term Rental forum.

@Pamela Sandberg , the MAIN problem is that most ppl starting out in real estate don't know what they don't know.  ;-)

The 'School of Hard Knocks' will teach you what you need to know.  Sir, I'm sorry you bought a 30 year old house and the roof failed the day after you closed.  ;-)

The AC unit is 25 years old?  No problem, right?  Wrong.

Since that information is buried under 10 tons of garbage that is known as the 'home inspection', many inexperienced buyers will gloss over it.  When it comes time to replace them, unexpectedly for newbie, they get a deer in the headlights look.  

It's OK to buy older properties that have older appliances.  Just know what they are dealing with and plan accordingly.

Those who don't PLAN are almost guaranteed to FAIL.  ;-)

@ paige
Thank you for the suggestion; i am kinda in a confuse mode, if i should go for it or not, it will be a brand new house and for me it is a long term commitment. I can see the feasibility for renting in near future and it looks possible as the location is currently a new community in North Phoenix. 
@Ryan Swan
I think that sound good; yes it will be my primary residence until there are any other consequences in future which is not likely. 
The short term rental can help at this situation i guess. This will be a brand new house and the budget will go up eventually for a while.
And thank you for your advise. 

Originally posted by @Ryan Swan:

@Surya Poudel buying your primary residence is always easiest, in terms of finding the property and obtaining the most favorable financing. Interest rates are once again at near historical lows, so from that point of view it may never again be as good a time to buy and lock in a low 30 year fixed rate. 

Any property you want to buy/live in should first and foremost meet the needs of your family in terms of a place to live and grow, but I always look at my primary residence from an investment standpoint as well. Will it appreciate in value? Would it make a good rental should my family needs change? 

You have several strategies when looking at a primary residence as a long term investment:
1) Convert some or all of the property to short term rental (maybe even while you're living there)

2) Move out and make the property a long term rental (the first of your portfolio!)

3) Live in the property with roommates and let their rent subsidize your mortgage and utility expenses 

In a recent study by Airdna, it ranked AZ as the #1 state for STR's. I have multiple properties in the area and are now slowly divesting from my smaller condos as the market is saturated, and the HOA's are troublesome. If you can, swim upstream to larger, luxury homes. There is less competition, higher ADR's and honestly less aggravation from guests.

Primary residence, Buy. Phoenix continues to be one of the fastest growing areas in the country year over year. 

Rental..........I'm not sure. I like to follow the 1% rule and i am not sure if that is obtainable, but i also don't buy investments locally (i'd like to though) so i have no insight with this.

Residence ~ You're probably ok.  Just don't plan on leaving soon.  ;-)

Rental ~ Proceed with caution.  You won't find 1% unless it's in a war zone.  And even those have been bid up.

Originally posted by @Surya Poudel :

Hello good people,  I am pretty much new to real state. I know its a million dollar question, is it good time to invest into a new house, i am first home buyer, i am want to go for it as a long term investing.  Heard lots of advise, but looking for an advise from some expert here. Thank you

Whenever I talk to someone who's contemplating whether to buy their first home, here is the question I ask them:

"Assuming your monthly payment is $1,500/mo whether you rent or buy, and the end of the next five years would you have rather paid down $90,000 on your own mortgage or someone else's?"

If you're going to be staying in the Phoenix area for the foreseeable future (next 4-5 years at least) it's probably a good idea. But if you're unsure, looking for a promotion to the opposite side of town, or thinking of getting a divorce, you should probably wait.

You can always rent the property out if you need to move, or sell it. So don't think it means you're locked in forever or anything.

Probably the best thing to do is discuss all the options regarding your personal situation with a local agent who can help you explore the options here in Phoenix. We do this sort of stuff ALLLLL the time, so don't worry thinking you might be wasting our time if you don't decide to buy. We're more than happy to help.

If you do a little exploration and want to consider it further, next step is to talk to a lender and get the financial part of things looked at (how much of a loan you qualify for, down payment requirements, etc.). And even then you're not required to move forward.

Just take it one step at a time, explore what's possible, and work with someone to get your questions answered. Before too long you'll know whether it's the right decision for you.

Best of luck! And if there's anything we can do to help feel free to ask we'll get you pointed in the right direction!

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