Investing in a rental property can be an attractive option for those looking to earn passive income. This can offer a flow of cash into one’s account every month, generating recurring income and providing an excellent way to ensure financial security.
If you are considering purchasing a rental property in Phoenix, this article discusses some of the major considerations in making this type of investment.
Understanding the Phoenix Rental Market
The average rent for apartments in Phoenix, AZ, is $1,553, and the average size is 805 square feet. Actual monthly rent varies depending on factors like location, size, and quality. Around 44% of the households in this city are renter-occupied.
The table below shows the average rent in the different neighborhoods in the Phoenix area:
|Deer Valley Village
|Dynamite Mountain Ranch
|La Salle Heights
|North Mountain Village
|Paradise Valley Village
|South Mountain Highland Terrace
If you’d like to know more about these Phoenix, Arizona, neighborhoods, our team will be more than happy to provide you with more information, so please don’t hesitate to reach out to us at your most convenient time.
Renting a Property in Phoenix
Arizona is considered a landlord-friendly state, having one of the lowest property taxes in the country at 0.72%. There are no rent control measures, so a landlord may charge any rent amount that they consider appropriate.
In some cases, tenants may be asked to pay upfront before moving in, typically a security deposit of one-half of the first month of rent. A security deposit is not required for a rental agreement, but a landlord can opt to include this as long as it does not exceed one and one-half months of rent.
State laws benefit landlords when it comes to written notices and eviction. For instance, a landlord may choose to evict a tenant for late payments provided they give the tenant at least a five-day written notice.
If the tenant decides to terminate the lease, the landlord is required to return the security deposit within 14 days. However, in cases of extreme wear and tear of their property, the landlord can withhold part or all of the security deposit. This also applies when there is unpaid rent or any violation of the lease agreement.
Finding the Right Rental Property
If you’re trying to decide which rental property in Phoenix to invest in, you might want to consider buying a single-family home as this tends to attract longer-term renters. A property with a few cosmetic changes and minor renovations will not only attract tenants who can pay higher rents but will also raise the value of your property if you opt to sell it after a few years.
The video below shows a few practical improvements that you can have in your Phoenix rental home that will save you more money in the long run.
Important factors to consider as you search for the right rental property include:
Neighborhood – This will determine the types of tenants you will attract as well as your vacancy rate. If your property is near a university, you will likely have students as potential tenants and you might struggle to fill vacancies every summer.
Schools – Proximity to good-quality schools affects the overall value of your rental property.
Safety – Check with the local police or your real estate agent whether the neighborhood/s you’re interested in can provide a quiet and peaceful environment for your future tenants.
Job Market – Areas that offer career opportunities will attract more potential tenants.
Amenities – Convenient access to parks, restaurants, gyms, movie theaters, public transportation links, and other perks make living in your rental property more attractive to potential lessees.
Future Development – If there is a lot of ongoing construction in the area, this may be a positive sign of growth. However, consider how the addition of new homes could compete with your property.
Preparing to Rent in Phoenix
Once you’ve purchased your rental property in Phoenix, you’ll need to determine a competitive monthly rent to ensure that your investment becomes profitable. Check out similar properties and compare amenities and values before deciding on the gross monthly rent income.
Next, spruce up your property to boost its appeal. Add a fresh coat of paint, refinish the floors, and modernize the kitchen or the bathrooms. All these will allow you to attract more tenants and charge a more competitive rent.
Once your property is done with its makeover, you may want to consider hiring a real estate agent to market your property. A local realtor will not only be able to effectively showcase your vacancy so prospective lessees are aware that it exists, you may also gain a competitive edge because of their expertise.
When showing your rental property to prospective tenants, there are a few things you can do to make it more appealing to potential lessees and increase your chances of finding a tenant faster. Watch the video to learn these top tips:
Before you draft the lease contract, make sure you screen interested tenants. Run a background check and make sure they have a history of paying on time, are easy to deal with, and will meet your lifestyle requirements.
Once you’ve chosen a tenant, it’s time to draft a lease agreement. It’s best to consult with a lawyer, but, in general, a lease contract should include the following:
- Names of the occupants
- Description of the property
- Duration of tenancy
- Protocol for when a tenant moves or breaks the lease
- Amount of monthly rent and security deposits
- Process for collecting rent
- Maintenance and repair policies
- Landlord’s rights to enter the property
- Other policies as needed (e.g., smoking, small pets, lawn care)
Investing in a rental property can be a smart investment providing you with a reliable passive income. Our team is here to help you find the best property in Phoenix, AZ. Feel free to call or send us a text message at (480) 888-5272 so we can start discussing your best options in the area.
Frequently Asked Questions
Bridle Ranch is in Queen Creek, AZ.
The real estate market in Bridle Ranch offers six single-level home designs on luxury estate-sized home sites ranging from 13,000 up to 20,000 square feet. The home designs include Farmhouse, Craftsman, Modern, Desert Contemporary, and Prairie architecture, ranging from 2,900 up to 4,200 square feet.
Bridle Ranch is served by the Queen Creek Unified School District. This award-winning district consists of nine elementary schools, two junior high schools, and three high schools known for their strong academic tradition, top-notch educators, and excellent support staff.
Yes, definitely! The relaxing surroundings, excellent amenities, and convenient access to everything you need make Bridle Ranch one of the most coveted communities in Queen Creek, AZ.