Short term rentals in Phoenix - East Valley area

[Geoff Husa]

I'm looking for peeps who do short term rental in the Phoenix metro area, specifically the East Valley. I'd love to hear from you about what that market is like, and what your experience has been with your investments. Am a native to the area, looking at investing in there. Still researching and formulating our strategy and what we want to focus on. Mostly looking at long term rentals up to this point, but as I research a bit, my interest is piqued regarding STR. I'd love to know the following info, if you're willing to share...

Have your revenues taken a hit with the pandemic?

What kind of seasonal fluctuation do you experience?

How much vacancy is realistic to plan for?

Care to drop any hints about good locations for such rentals? Anywhere you definitely want to stay away from?

Anyone having any luck using a property with an Attached Dwelling Unit as their short term rental?

What kind of tenants do you cater to? Generally what are they coming to Phoenix area for?

Are you currently considering getting out of STR? Why?

Any really good peeps or resources to point me to for a good understanding of STR investing?

Any other thoughts you might have if you were to want to convince someone else why going the STR route in this particular area is worth considering?

Looking forward to hearing from some of the BP community on this!

Thanks in advance!

[Luke Carl]

@Geoff Husa

I don’t believe Phoenix has ever been brought up on this forum so you’re not likely to find what you’re looking for.

My advice:

1. Google “Phoenix short term rental” and find out if it’s legal.

2. Read this forum for 2 to 24 hours straight.

3. Ask us questions formulated for people who are not in your exact market because none of us are. Although you may get lucky and someone might pop up with a Phoenix key word!

Good luck :)

[Brian G.]

@Geoff Husa @Michael Greenberg I believe is in Scottsdale and may have some wisdom.

[Luke Carl]

Ok fine you caught me in a good mood with plenty of sleep 😴 

If @Michael Greenberg can help I would be begging him if I were you! 

Originally posted by @Geoff Husa:
I'm looking for peeps who do short term rental in the Phoenix metro area, specifically the East Valley. I'd love to hear from you about what that market is like, and what your experience has been with your investments. Am a native to the area, looking at investing in there. Still researching and formulating our strategy and what we want to focus on. Mostly looking at long term rentals up to this point, but as I research a bit, my interest is piqued regarding STR. I'd love to know the following info, if you're willing to share...

Have your revenues taken a hit with the pandemic?

my revenue has gone up 

What kind of seasonal fluctuation do you experience?

February is slow. I average 85+% year round 

How much vacancy is realistic to plan for?

See previous answer 


Care to drop any hints about good locations for such rentals? Anywhere you definitely want to stay away from?

Places where few people live and many people vacation 

Anyone having any luck using a property with an Attached Dwelling Unit as their short term rental?

This is done in cities. It’s not for me. 


What kind of tenants do you cater to? Generally what are they coming to Phoenix area for?

We call them guests. They run the gamut. Rich poor/short tall. 

Are you currently considering getting out of STR? Why?

Random question? No. 

Any really good peeps or resources to point me to for a good understanding of STR investing?

Avery Carl and Paul Sandhu

Any other thoughts you might have if you were to want to convince someone else why going the STR route in this particular area is worth considering?

Why? Why not LTR? It can be done and I’m extremely happy with mine but what’s your goal and what was your journey leading you to this post? 

Looking forward to hearing from some of the BP community on this!

Thanks in advance!

[Lauren Kormylo]

A few others are doing STRs in Scottsdale :
It's not letting me tag them so here are posts:
@george mevawala https://www.biggerpockets.com/...
@melanie johnston  https://www.biggerpockets.com/...

[Melanie Johnston]

Thanks @Lauren Kormylo for mentioning me!

@Geoff Husa I agree that @Michael Greenberg has a great perspective on the Scottsdale STR market. I have seen his operation from the inside and he runs a tight ship! I got started in STRs 15 years ago when the "shortest" rental period was 30 days. Even today I operate in what I call a hybrid mode, renting long-term to retired winter visitors and then using a 3-day minimum for other seasons.

As you can imagine, the STR industry, as part of the hospitality industry, has been on a roller coaster since the pandemic arrived. I would be happy to answer your questions. We are in the midst of a busy market, so let me carve out some time in the next few days to provide thoughtful responses.

I always say if you want to know up-to-the-minute demand for STRs in your target market, go to Airbnb and search for what you think you want to buy and check out their availability calendar. That's the best snapshot.

More later,

Melanie

[Geoff Husa]

@Luke Carl thanks for chiming in. The picture that's starting to become clear from other STR investors in the area is that there's a market for it for sure, but the revenue is just barely enough to beat out LTR.

As for the randomness of my question about whether anyone is getting out of that market, it's not as random as I may have made it seem. I should have put some context. I just heard the CEO of Redfin talking about his expectations that we're going to be seeing a lot of airbnb peeps selling properties because of what covid has done to that market. In wondering how true that might be for the Phoenix area, I figured I'd put that question out there to see if people might be thinking of getting out.

You asked why not LTR? That's what's rolling around in my head as well. Keep in mind my wife and I are just now formulating how we want to move forward with investing. We've got about 9 months left before we can act, and during which we're planning on considering different strategies and approaches, networking with people to learn from and interact with, and continue to save as much capital as we can. So this whole question about STR's comes from a recent conversation I had with @Brian G. that just got me wondering if I'd even given a serious consideration to STR strategy in the area we're looking at.

Thanks again for your thoughts!

[Geoff Husa]

@Melanie Johnston and @Lauren Kormylo thanks for the input guys!

Some more info I've been able to get: One of my friends who has a long history of REI (mostly wholesaling and flipping, but also dealing in on-market stuff) in the area was just telling me that there's a lot of airbnb type stuff in the area, but that it's difficult to net much. It just doesn't gross as much as other areas. As such it's a draw between doing STR or LTR. And since the amount of hands on can be so much higher with STR, unless you really dig that kind of stuff, then you might want to go more with LTR mindset. That was a summary of her conversation with me.

Wondering if further input from peeps would confirm this. I still have one more friend I know who does STR in the area that I'm waiting to hear from.

[Brian G.]

@Geoff Husa @Pamela Sandberg might have some insight

[Pamela Sandberg]

Thanks for the mention, @Brian G.! Melanie and I actually work at the same brokerage, and we're seeing a lot of the same things on the STR market. She's absolutely right about a "hybrid model". Real estate is like any other investment - you need to diversify your portfolio. If you have multiple exit strategies (or multiple holding strategies), you can make it through the ups and downs of COVID!