Retirement based on rentals in AZ

5 Replies

Decided to make the goal of retirement in 4 years that puts me at 62. A large part of making that possible are rentals in the greater Phoenix area. Goes without saying things have been incredible and by most indications the future looks bright. On the other hand I just can't see valuations keeping this pace. I know without providing more detailed information answering might not be easy. I guess my question is, am I the only investor getting nervous and thinking about maybe cashing out on a couple places or trust that one is better to stay in for a few more years? 

Hi David thinking Phoenix is the best market in USA for Real Estate appreciation.  With these interest rates and the economy in Phoenix so great.

I think it is a very hot Real Estate investment/market for 24 plus months.

over 220 people moving in then moving out

Everyone still needs a roof over their heads.

Invest in the valley and ride the rave!

Hi David, Thanks for the reply. I have a really good realtor and he is full steam ahead. But like some serious medical issue it doesn't hurt to get a second opinion. His theory is when the active listings in the greater Phoeinex area  reach between 18k-24k, that would be a healthy market.Do you agree with that assessment? I guess in other words until then the market favors the sellers. Not new to the rental industry but probably haven't put enough time in as I should. Right now just riding high, many would probably say dumb luck.

@David Weymouth I think the AZ market has a lot of info term potential, especially with the job growth and population growth. I think it depends on what your strategy is and what part of your retirement income comes from these rentals.

If your plan is to hold these rentals through retirement, then I think you’re OK since rentals should remain strong. If your strategy is to sell the rentals in 4 yrs and use the cash as retirement income then that might be more risky since who knows what the market looks like then. I personally just sold one of my rentals in Tempe due to where market prices are at, but that was because it wasn’t cash flowing well and I am using that money to trade up properties.

I think I would ask my self what role are these properties going to play in my retirement. Do you need the cashflow or would the lump sum be better put to use some where else. If you want access to the equity maybe look into line of credit secure by multiple properties. 

If your strategy is "buy and hold" then carry on. Selling gets you a bucket of cash but at 1/2 of 1 percent, that's not going to keep you retired. So keep holding and generating cash flow.