New to Arizona - Need advice on Real Estate

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New to Arizona - Need advice on Real Estate

Michael LemMon
New to Real Estate · Member since 2018 · 9 posts · 3 votes

I am highly considering buying a property in Arizona due to significantly lower prices than my current market (San Diego). I am interested in the Scottsdale area and have also heard great things about Chandler & Tempe (and not so great things about Mesa). Any thoughts, recommendations, or general facts on those areas would be appreciated. Some additional facts on my mindset and what I am looking for:

  • -I would ideally like to turn this into an investment property down the line, so would like it to be in a good market for that. I will most likely "live" in it to start to qualify for the FHA loan.
  • -I like the idea of Scottsdale because the vibrant social scene and baseball stadiums (I'm a male in my 20s and SF Giants fan)
  • -I am looking for a single family home (3-4 beds + pool)
  • -Ideally would like to keep budget under $500k and from what I've seen that is not very doable in Scottsdale, but seems obtainable in Chandler
  • -I've heard Mesa is a dirtier more crime ridden town (which I don't understand if its in between Scottsdale and Chandler)

Morale of the story is I know nothing about AZ and want to invest in a place i wouldn't mind living, but with great rental potential. Please be as brutally honest about these areas or if my expectations are unreasonable. Looking to learn. Thanks~

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Melanie Johnston
Real Estate Agent · Scottsdale, AZ · Member since 2018 · 412 posts · 366 votes
5y

@Michael LemMon Using your 3-bedroom criteria:

• Nothing changed in Scottsdale...there just isn't enough inventory.

• In Chandler a great house came on the market just under $400,000. It will go fast.

• In Gilbert we dropped to $415,000.

• And in Mesa, a nice house with a pool will start at $400,000.

More houses are coming on the market daily, not as many as we need, but they are going active.

In fact, if you want to know how our market has been working the last 6 weeks...On Wednesdays/Thursdays new properties go active in the MLS. Showings are generally on Fridays/Saturdays/Sundays with offers due either by Sunday night/Monday morning/Monday night. So if you see a great active listing on the MLS on Monday don't get excited. Chance are it's at the end of the weekend cycle and it's about to be changed to "Under Contract" or "Pending."

One advantage getting listings from an agent through the MLS offers (vs. Zillow and Redfin) is the COMING SOON status. These are homes that are not yet active, but may be available to show--and even write offers on. These listings don't get fed to the online portals like Z and R.

Be sure to ask to have COMING SOON listings included in any Metro Phoenix MLS searches someone sets up for you.

Hope this helps!

Melanie

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  • DeWitt GibsonPro Member
    Investor · Phoenix Arizona, USA · Member since 2018 · 176 posts · 105 votes
    5y

    @Michael LemMon I am a Scottsdale native and I now live in Chandler. They are very different towns. Can’t argue with you about Mesa, it’s not for me. North and South Scottsdale are very different as well. We have three kids and really like Chandler schools. Scottsdale has a lot of world class golf resorts and dining. If you afford it, Paradise Valley or North Scottsdale are very nice. Carefree is also worth a look.

    0Reply
  • DeWitt GibsonPro Member
    Investor · Phoenix Arizona, USA · Member since 2018 · 176 posts · 105 votes
    5y

    @Michael LemMon I just reread your criteria. I think a townhome in South Scottsdale is going to be attractive for you. Close to the Old Town Bar scene, Scottsdale Fashion Square, McCormick Ranch, etc.

    Chandler is really solid for families and long term rentals because of the major employment and schools. Not so much for short term rentals or “single life”.

    Mesa is just older and more run down. I’d avoid it.

    Tempe can be really good because ASU is there so there’s always something going on.

    Based on your criteria I’d recommend South Scottsdale or Tempe :)

    1Reply
  • Melanie Johnston
    Real Estate Agent · Scottsdale, AZ · Member since 2018 · 412 posts · 366 votes
    5y

    @Michael LemMon Welcome (soon) to Arizona! Let me share my thoughts on your questions above.

    • You can find a single family home in the "fun" zip codes of Scottsdale (near Old Town) under $500,000, but the lowest priced home in that area with a pool is currently listed at $645,000. In the past 30 days there have been homes with pools below $550,000, but they attract multiple offers. (Well, truthfully almost every property is attracting multiple offers right now.)

    • The lowest priced 4 bedroom w/pool in Chandler is currently $505,000 (staying in north Chandler will put you closer to the action in Scottsdale).

    • Adding Gilbert to your search will also get you your target property profile at just under or at $500,000.

    • Mesa is like a patchwork quilt. There are newer areas and older areas. I helped a BP investor buy a 3/2 SFH in northeast Mesa in October for $347,000. He is getting $2,000 in rent and is wanting another property just like that. So it depends on where you are in Mesa. I wouldn't cross the city off your short list. Just look for newer properties so you know you'll be in an area that fits your lifestyle.

    Hope this helps! I'm sure others will come on and share their opinions. After all, this is our favorite topic.

    Feel free to ask me anything.

    Melanie

      3Reply
    • Stone Jin
      Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
      5y

      @Michael LemMon

      We have most of our properties in Mesa and depending on the area there are multi million dollar homes there too. Mesa is a huge city with almost a million people and many different sectors.

      Sounds like you want to be in the parts of town that more fits your demographic. You can also check out downtown Phoenix as it is also on fire. New condos etc going up all over the place. You can look at getting a newer duplex and upping your budget as the rents will offset your monthly cost quite a bit.

      3Reply
    • Twana RasoulBusiness Member
      Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
      5y

      @Michael LemMon If you are going to house hack anyway and use low down payment options then you definitely owe it to yourself to consider your own backyard...you are in a market that has very high quality assets, that's why the prices are higher.  

      If you really want to move out of state just to house hack then definitely look into the local economy first and make sure to get a great understanding of the long term prospects of the economy and housing market and the type of returns you can expect.  Initial cash flow is only a portion of the overall equation and should not be the only thing considered when evaluating properties especially when comparing San Diego to an out of state area.


      Good luck either way :)

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      0Reply
    • Michael LemMon
      OP
      New to Real Estate · Member since 2018 · 9 posts · 3 votes
      5y

      @DeWitt Gibson thanks for the recommendation. A townhouse in south Scottsdale is on my shot today as well. Seems like a doable place to get something in a fun area and can also have a pool albeit one in a complex.

      1Reply
    • Michael LemMon
      OP
      New to Real Estate · Member since 2018 · 9 posts · 3 votes
      5y

      @Melanie Johnston Thank you for all the detail. How much do these prices change if the criteria is lowered to 3 bedroom. The 4 bedroom may have been a little over zealous on my part.

      0Reply
    • Paul Welden
      Real Estate Agent · Tempe, AZ · Member since 2011 · 1k+ posts · 543 votes
      5y

      While Scottsdale, Tempe, and Chandler may have more desirable names/locations/activities, don't rule out Mesa for long term investment strategy. 

      For a more young/vibrant crowd and nightlife and outdoor activities, I think Scottsdale is #1 and Tempe #2. But they are also quite a bit pricier than Mesa.

      Scottsdale/Tempe - look for an older SFR or Townhome in a great location (near their downtown's) but that's getting really pricey. May want to consider a bit further away from the "fun areas."

      North Chandler is doable and Mesa can be hit/miss depending on the area. 

      2Reply
    • Melanie Johnston
      Real Estate Agent · Scottsdale, AZ · Member since 2018 · 412 posts · 366 votes
      5y

      @Michael LemMon Using your 3-bedroom criteria:

      • Nothing changed in Scottsdale...there just isn't enough inventory.

      • In Chandler a great house came on the market just under $400,000. It will go fast.

      • In Gilbert we dropped to $415,000.

      • And in Mesa, a nice house with a pool will start at $400,000.

      More houses are coming on the market daily, not as many as we need, but they are going active.

      In fact, if you want to know how our market has been working the last 6 weeks...On Wednesdays/Thursdays new properties go active in the MLS. Showings are generally on Fridays/Saturdays/Sundays with offers due either by Sunday night/Monday morning/Monday night. So if you see a great active listing on the MLS on Monday don't get excited. Chance are it's at the end of the weekend cycle and it's about to be changed to "Under Contract" or "Pending."

      One advantage getting listings from an agent through the MLS offers (vs. Zillow and Redfin) is the COMING SOON status. These are homes that are not yet active, but may be available to show--and even write offers on. These listings don't get fed to the online portals like Z and R.

      Be sure to ask to have COMING SOON listings included in any Metro Phoenix MLS searches someone sets up for you.

      Hope this helps!

      Melanie

      4Reply
    • Michael LemMon
      OP
      New to Real Estate · Member since 2018 · 9 posts · 3 votes
      5y

      @Stone Jin Thanks for the info. What parts of Mesa would be better to look at? I’ve never been so would like to have some context when doing a general search on Zillow.

      Also, what about rental market in Mesa? I’d imagine Tempe’s is good because of ASU, Phoenix because major city and Scottsdale because of scene. Does any of that carry over to Mesa?

      0Reply
    • Michael LemMon
      OP
      New to Real Estate · Member since 2018 · 9 posts · 3 votes
      5y

      @Paul Welden what parts of Mesa would be best to look at? Any insights on rental market in the Mesa area also? Is it as strong as a Tempe, Scottsdale, Phoenix?

      0Reply
    • Paul Welden
      Real Estate Agent · Tempe, AZ · Member since 2011 · 1k+ posts · 543 votes
      5y

      @Michael LemMon Even though west Mesa (101-Country Club Dr) is closer to Scottsdale/Tempe, it's older and not the most desirable part of Mesa. The east Mesa area tends to be nicer... Eastmark (SE Mesa), Las Sendas (NE Mesa) are just a few suggestions, but they are quite far away from fun Scottsdale/Tempe.

      However, there is a HUGE sports/entertainment complex being built in Mesa called Legacy Sports, which may interest you. 

      Mesa will be generally less expensive compared to Scottsdale/Tempe but could be on par with certain areas of Phoenix but there is a trade off that you may not find desirable and may want to pay extra to buy in Scottsdale/Tempe. 

      You are correct about the "identities" of Phoenix, Scottsdale, and Tempe. Mesa appears to be struggling with an identity. 

      Rental market is strong in almost all areas but Mesa can generally be less expensive compared to Scottsdale & Tempe. 

      Phoenix has so many unique areas (south mountain, downtown, uptown, etc.), we have to be very specific on the location to properly determine the market analysis. 

      0Reply
    • Stone Jin
      Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
      5y

      @Michael LemMon

      Most of our Mesa property is in east Mesa which has a large number of early 2000 build tract homes. We also own in west and the north parts town.

      Mesa is very diverse and has housing ranging from c to a+. You can check housing around Mesa community college where you get a blend of tenants. It’s minutes from all the nightlife of Tempe and Scottsdale. Mesa is significantly cheaper than Scottsdale and Tempe so for a budget of 500k. You might be able to get multiple units to mitigate the risk of vacancy.

      0Reply
    • Antoinette De la Espriella
      Realtor · Long Beach, CA · Member since 2020 · 17 posts · 2 votes
      5y

      @Stone Jin

      I am interested in investing near Tempe, Mesa, Scottsdale, chandler. I will be airbnb the property, if it works I’ll continue to do so. But it may turn into a long term rental property. I don’t have a lot of cash for a huge budget. Goal is 150k property

      Where would you recommend? Any specific streets or zips?

      1Reply
    • Stone Jin
      Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
      5y

      @Antoinette De la Espriella

      Unfortunately I'm not sure what's available at the 150K price point.  I'm guessing there are some condos available that are in rougher complexes.   There are plenty of realtors on this site that can help you with that.

      How are you planning on managing the airbnb? I'm assuming you are not local to AZ based on your profile? Unless you want to use the property part time for yourself, the management fees on Airbnb usually makes it comparable to long term rentals. I've seen 20-25% management fees on STR vs the 10% on LTR.

      0Reply
    • Antoinette De la Espriella
      Realtor · Long Beach, CA · Member since 2020 · 17 posts · 2 votes
      5y

      @Stone Jin

      I would be living in the property part time, only the first year. To be Able to renovate it the first year.

      So probably going to manage it remotely, to save on prop management expenses.

      I am going to BRRR this property, so eventually it will long term rental.

      I’ve seen some good options in my price range with my realtor but haven’t visited the area in a few years. I’ll need to make a trip out this coming month.

      Do you have a property management team or firm that you recommend?

      0Reply
    • Stone Jin
      Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
      5y

      @Antoinette De la Espriella we self manage in AZ. We did the STR business for 6 years, I'm not sure that's something that can be remotely self managed. You live and die by tenant reviews, so if on a Friday night the blender breaks, how will you address that?

      There is such a demand for long term rentals right now that I'm sure you can make okay cashflow if you are able to find a desirable property.  

      0Reply
    • Antoinette De la Espriella
      Realtor · Long Beach, CA · Member since 2020 · 17 posts · 2 votes
      5y

      @Stone Jin

      Thanks so much for the advise, I appreciate it! Bring up some very good points, I also just learned Airbnb requires you to have a prop manager close by to Handle such issues.

      I’ll need to double check my rates and numbers in regard to str vs ltr.. Thanks again. Super helpful!! It’s hard making this decisions, having not done it before.

      You said you have your own prop management company? Can I call?

      0Reply
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