Rental Property Investor · Salem, OR · Member since 2019 · 22 posts · 9 votes
I’m an out of state investor who is very interested in the Scottsdale market for AirBNB. What parts of Scottsdale work well for a vacation rentals? Does anyone have any results of charging $300-$1000 a night?
As others have mentioned, you'll likely need a larger home to touch the $1000/night booking. However, that very likely means a "party house" with more cleanup, pool maintenance, risk, and headaches from neighbors calling the police or you to complain about the noise and drunk people in their neighborhoods. I owned (and have sold to clients) one-bedroom condos in South Scottsdale in complexes with no rental restrictions units that brought in $400+/night in the busy season and were easy to keep 100% occupied over the summer when very few people are vacationing in Arizona. Happy to help if this is something you would consider.
Hi Roddy - I own and co-host properties in the area. Scottsdale/PV does very well. Must be very diligent about managing. Lots of party houses. That can be a nightmare. 4/3 with a pool will fetch +300 in the high season (now) You'll need a larger 5 or 6 bed to get up in the $1000 range. There are pockets that get higher prices than others. Have you been to the area?
@Ryan Foster Hello Ryan, yes I've been to Scottsdale area. My best friend lives there. After visiting there I got the perfect vibe that this place would be a gold mine for an Airbnb STR property. I'm more likely to consider finding partners to do a 5 or 6 bed deal for the bigger cashflow. Thank you for your valuable insight!
@Roddy Walker, my experience tells me this is a dangerous path to taking on a first STR investment. Location matters, but not more than the value one can offer against the market. Value trumps price over time - Toys R Us failed because they failed to offer value over time as markets changed and the same thing happens in this business every day.
I lived in Scottsdale until I was 23. I am looking to start a STR but Scottsdale is SO over saturated.. there is like a new property coming up every week! The allure is really the bars so the comment about parties is accurate - but there are already so many properties that cater to bachelor/ette groups... paired with the fact that big events like Barrett Jackson and the Phoenix Open are going to look a lot different in 2021, I just don't know.
Anyways, I did some price shopping and $300-$450/night seemed to be the range for peak season, pool required almost. So you could get that, it is just the most competitive area.
Not to mention the competition of BUYING a house with NO HOA in Scottsdale. Out of state/country investors are swooping in with all cash. Right now houses all over Phoenix are getting an average of 13 offers according to my agent, and Scottsdale is going to be rough because everyone wants to invest there. NOT impossible, but good to know what it looks like to enter the market!
@Roddy Walker word to the wise here....AZ has traditionally protected owner property rights and in turn the short term rental model. The state has swung left in this past election and anyone who isn’t cognizant of what that means for property rights isn’t paying attention. I don’t want to bring politics into this forum, but in this particular case, I think that the word proceed with caution are appropriate.
Scottsdale in particular has been most aggressive within the Phoenix Metro about the “party ban”.
As others have mentioned, you'll likely need a larger home to touch the $1000/night booking. However, that very likely means a "party house" with more cleanup, pool maintenance, risk, and headaches from neighbors calling the police or you to complain about the noise and drunk people in their neighborhoods. I owned (and have sold to clients) one-bedroom condos in South Scottsdale in complexes with no rental restrictions units that brought in $400+/night in the busy season and were easy to keep 100% occupied over the summer when very few people are vacationing in Arizona. Happy to help if this is something you would consider.
We purchased a SFH in South Scottsdale (about a 10 min drive south of Old Town) late last year with the intention of renting it as an STR. $520K purchase price - 4/3 1800+ sq. ft. with pool, above ground hot tub, gas fir pit, and an overall amazing backyard/outdoor space.
We have been getting $400-$450/night + $75/night for pool heat if the guest requests it. In the summer this rate will likely drop to around $300/night. We are mostly booked through mid-May. Thus far in 2021 we have averaged a gross income of $9150/month (before mgmt fees, cleaning, PITI, and utilities), factoring in April's bookings.
Some quick thoughts... Based on our experience, I think 4/2 is the sweet spot. Anything bigger and you will deal with large parties/events which = headaches. Also, Scottsdale has a law in place that restricts short-term rentals from allowing more than 6 adults to stay at a time (unlimited dependents of these adults allowed). I don't think it gets enforced. But the bigger the home you get (ie more bedrooms), you're more exposed to potential enforcement down the road. There are always risks, but this venture is working for us and we are looking for another one. Hope this helps.
@Jacob M. Thanks for the insight!!! This was really helpful! We are actually about to make an offer on a 4/2 this week! I have two different deal opportunities with 2 different partners so I want to make sure we strategically structure our properties for success from day 1.