Does anyone own rental property in Prescott, Arizona? Do you do vacation rentals, winter visitor rental, or traditional rentals?
I don't have any rentals in Prescott, but my daughters friends family has 3 or more. They buy fixers near the downtown square , fix them up real cute and make a killing with vacation rentals.
I live in the Prescott area and there is talk that they are trying to clamp down on the vacation rentals just like many other areas around the country. I would try to find something more concrete than hearsay before deciding to go with vacation rentals. If the laws change, you may be forced into single family rentals anyway. That may be okay with you, just make sure the numbers work both ways before purchasing
I am relocating to Prescott in January and have been reading up on vacation rentals. It looks like there is a state law that allows vacation rentals. Although Prescott city would like to ban them, currently they cannot. What the city did do is impose some restriction.
There are different rules if you are renting out the entire house vs. just a room(s) and are living in the other part of the house. You need a business license and will need to pay a fee to the city along with a registration fee. There is a good read in this link: Prescott's short-term vacation rental ordinance
I hope they don't try to outlaw them entirely as the house we purchased has an attached 2/1 apartment that I was going to use as a vacation rental. I don't know the peak vacation time, although I know a lot of people from Phoenix come up in the summer to escape the heat. There is a strong long term rental market though.
Thanks Mike. We own two short term vacation rentals in San Diego where there is a strong opposition. We hope they are able to find consensus on fair and reasonable restrictions and regulations. Our experience has been really positive. Since Prescott is a smaller city, I'm having trouble finding much research on the rental market. A quick scan of zillow and craigslist shows there isn't much available to rent and the vacancy rate is relatively low. Would you have any other resources that point to strong rental market? I know home values are rising rapidly there as well. -Danielle
@Danielle Friberg The info regarding the long term rental market is from my realtor and some information I picked up off of City Data. You are in the same boat I am regarding the cost of housing in Southern California. For long term 3/2 I have been looking in Prescott Valley with the rental prices ranging from 1,100 to 1,400. if you buy right you could meet the 1% rule, but I think 2% will be hard to obtain.
Chino Valley also has a good potential for long term, but it appears to be a lower class neighborhood. Dewey is also nearby, but I cant find any rental comps. Prescott proper has so many area's that are completely different from each other.
For a VRBO type investment you would want to be as close to the courthouse as possible. I have seen many 2/1 for reasonable prices, but I am only familiar with CA pricing, so anything looks reasonable to me.
I'm still learning this business, but once I get out there I will be in the market for a fixer 3/2 in Prescott Valley for long term rental that I can BRRR. I'm going for the get rich slow method.
Hi, we recently faced the same issue. We had summer home up in Pinetop AZ, we just weren't using it enough so we decided to convert it to a rental. We've owned and operated both VRBO and traditional rentals in the Phoenix so understood pro's and con's to it. We ultimately decided that we were going to rent it out unfurnished.
The reason we choose to rent unfurnished is comparing the profit from each approach vs the headaches from each approach. Property management on STR is about double the cost of unfurnished. There are also additional costs in utilities/furnishings/landscaping etc for STR. After all of that STR would probably still be more profitable but not by much. Plus our experience with STR in the valley, we knew that the clients were generally were more picky. We looked at our property as well, we have a newer stick built home but it was not a cabin style, there probably were $XX of work that needed to be done for VRBO standard of rental. So we just took a look holistically and for us it wasn't worth the hassle for the few hundred bucks more a month.
AZ passed a law that STR was allowed, if you are in an HOA then they may dictate some restrictions (min rental duration, need to pay some fee etc).
I know I kind of rambled, but hopefully the intent came through.
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