Vacation rental in Sedona Arizona Help

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Vacation rental in Sedona Arizona Help

Brandon Bonfiglio
Franklin Square, NY · Member since 2019 · 32 posts · 10 votes

I’ve been looking around for an investment property in Sedona, AZ . I’ve been working with a realtor about where I can use a short term rental. I’m just curious if anyone else is currently renting there and if you have an advice . Is sedona a good area? My budget is 400k-550k . I’m looking to put a 20% down payment and hopefully net 25-40k a year after all expenses (including mortgage) . Does this seem possible or out of reach?

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Pamela Sandberg
Realtor / Attorney · Phoenix, AZ · Member since 2018 · 388 posts · 265 votes
7y

Sedona has gone CRAZY over the past few years ... investors have jumped in everywhere and driven the prices up substantially. Not sure the returns will justify the high entry point over the next couple years. Just IMHO.

Phoenix, on the other hand, is very close to Sedona has has a vast market with all kinds of different opportunities. We are projected to add thousands of jobs here in the Valley over the next couple years. These are people who will need houses to buy and rent! I'm happy to answer any specific questions you have about AZ in general or Phoenix specifically. 

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  • Jon Crosby
    Investor · Roseville, CA · Member since 2016 · 893 posts · 1k+ votes
    7y

    @Brandon Bonfiglio I have never been there but Sedona has always been on my list to target next. That being said, when it was first put on my list a few years back and I would do some high level analysis it actually showed good cash flow. Lately however, not so much it seems like. Not sure if there has just been a lot of appreciation the last 2 years or if STR occupancy has dropped but you might have to be patient to find something that pencils out there now. Best of luck though, would love hear more about what you find out!

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  • Brandon Bonfiglio
    OP
    Franklin Square, NY · Member since 2019 · 32 posts · 10 votes
    7y

    @Jon Crosby Thanks for the information! Do you have any advice on what is a good place to look?

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  • Pamela Sandberg
    Realtor / Attorney · Phoenix, AZ · Member since 2018 · 388 posts · 265 votes
    7y

    Sedona has gone CRAZY over the past few years ... investors have jumped in everywhere and driven the prices up substantially. Not sure the returns will justify the high entry point over the next couple years. Just IMHO.

    Phoenix, on the other hand, is very close to Sedona has has a vast market with all kinds of different opportunities. We are projected to add thousands of jobs here in the Valley over the next couple years. These are people who will need houses to buy and rent! I'm happy to answer any specific questions you have about AZ in general or Phoenix specifically. 

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  • Melanie Johnston
    Real Estate Agent · Scottsdale, AZ · Member since 2018 · 412 posts · 366 votes
    7y

    @Brandon Bonfiglio

    Arizona is a great location for vacation rentals, but I would do a lot more research before entering the Sedona market. Over the last several months Sedona residents, who feel their town has been overtaken by STRs, have been outspoken in their opposition...and have gotten the attention of the governor:

    https://www.azcentral.com/story/news/politics/arizona/2019/08/22/arizona-lawmakers-revisit-short-term-rental-law-governor-ducey-airbnb/2089887001/

    https://www.azcentral.com/story/news/local/arizona/2019/07/25/sedona-residents-challenge-rep-bob-thorpe-over-vacation-rentals/1811064001/

    While any legislative crackdowns seem to be directed toward corporate "party houses," individual STR owners in Sedona, especially, could get caught in the crossfire.

    Cities in Metro Phoenix like Scottsdale, on the other hand, are more diverse and dispersed in terms of STR locations, so we have not seen the high-volume backlash by residents that Sedona has experienced.

    When you are deciding where to invest, check local news sites for stories on vacation rental legislation and policies. While government regulations can change, knowing what's in the news right now could save you both time and trouble down the road.

    Best of luck on getting your first STR up and running!

    Melanie

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  • Jon Crosby
    Investor · Roseville, CA · Member since 2016 · 893 posts · 1k+ votes
    7y

    @Brandon Bonfiglio I’m sure there are lots of markets you can target but going to depend on how good of deal you get on the buy, how many beds you can fit and that the market has enough occupancy to fill the beds. If you can fine a 4-5 bedroom in Sedona for that price then you might be in good shape there even.

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  • Chad McMahan
    Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 754 posts · 504 votes
    7y

    Hi Brandon. I thought you might appreciate a response from a realtor IN Sedona. Your numbers are doable. My long term and short term clients and I only move forward on property if it accomplishes their goals. We are regularly hitting net cash on cash of 5-8%. I'm not accepting new clients at the moment, but I'd be happy to connect you with a local agent that is a short term rental specialist.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    If your goal is to maximize cash flow, why aren't you looking at long-term rentals in the mid-west? A vacation rental takes more money and effort to produce the same results and is more likely to be impacted by a change in the political climate or the next internet invention.

    The DIY Landlord Book4.7247 Reviews
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  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    7y

    @Chad McMahan

    The OP is looking to invest about $100k cash and net $25-40k after debt service. You stated your clients earn 5-8% cash on cash. How does this lead to your analysis that the OP’s target of 25-40% cash on cash return is doable?

    Private Mortgage Financing Partners, LLC
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