Arizona is an excellent choice for real estate investing, thanks to its rising median home values, home prices, and median rent. A growing population and booming economy ensure a steady stream of tenants for any investment property.
According to RoofStock, Arizona has the 12th lowest property taxes in the country, and homeowners in Arizona pay an average of $1,000 less annually than the rest of the nation. This low tax rate, combined with a median home value of $332,357, makes Arizona properties a smart investment.
Additionally, property taxes remain relatively stable over time because it's illegal to raise the taxed property values by more than 5%. This means that even if the Arizona real estate market is incredibly hot one year, you're unlikely to experience a huge shift in tax bills.
In addition, Arizona is one of the most landlord-friendly states due to its tenant laws, which highly favor landlords in terms of evictions. Tenants are legally barred from withholding rent for any reason, and the landlord only needs to provide a five-day notice before beginning eviction proceedings. Long-term renters are also expected to keep your property in good repair, which includes regular cleaning and maintenance.
Arizona's real estate market is incredibly hot right now: it's the second top-ranked real estate market according to PwC and one of the fastest-growing markets in the US, located in the so-called Super Sun Belt. The median sale price is currently $438,200, up 2.3% year-over-year. The time on the market has dropped by seven days, particularly because the number of homes has dropped by over 22%.
At the same time, Arizona is experiencing rapid population growth as young families in neighboring states, such as California, seek a better way of life. Between 2021 and 2022, Arizona's population rose by 1.3%, mainly due to immigration. With its steadily growing population powering a strong demand for long-term rentals, savvy investors who purchase apartment complexes or single-family homes in desirable neighborhoods will find tenants with no problem.
Arizona has experienced significant population growth in the last few years due to rising rental prices and the cost of living in other states. At the same time, home prices in the state are quite high, deterring would-be home buyers and swelling the rental real estate markets across the state. This combination of factors makes buying property in this sunny Southwestern state a sure winner.
Over 40 million people visited Arizona last year, bringing the state $28.1 billion in tourism revenue. Visitors enjoy the world-class golf courses, beautiful parks, and excellent shopping. At the same time, there are only about 39,000 vacation rentals available, though the number has been steadily rising in recent years.
Arizona state law forbids counties from prohibiting short-term vacation properties, which ensures that real estate investors are free to pursue a steady stream of tourist rentals in any area of the state. The high tourism rates and legal protections make Arizona a perfect place for a short-term use rental property investment.
While Arizona has a higher homeownership rate than the national average, there are still plenty of opportunities for rental income in the state. The statewide average for rent is $1,491 per month, which is high compared to the nationwide average of $1,372. However, it's lower than nearby California, with a shocking average of $1,958.
This mismatch between states has created a strong demand for single-family homes, as young couples and families take advantage of the lower rental prices and plentiful job opportunities. Housing inventory is low, so many families choose to stay renters, as they can't compete with wealthier buyers for a single-family home.
At the same time, Arizona's job growth, particularly in the tech sector, has attracted many younger singletons who enter the rental market looking for small one or two-apartment properties. Smart real estate investors can diversify their portfolios and target multiple demographics at a time. The best way to buy rental property is by working with a local realtor to identify the most promising areas and selecting a mix of property types.
Visio Lending offers a variety of investment property loan programs, such as flexible 30-year loans for vacation rental properties and 1-4 unit single-family rentals, including condos and townhomes:
Our investment property loans are tailored to investors with the following:
Visio Lending strives to deliver the fastest, simplest, and most dependable mortgage financing to enable investors to grow their real estate portfolios, improve cash flow, and build wealth.
Visio Lending strives to deliver the fastest, simplest and most dependable mortgage financing to enable investors to grow their real estate portfolios, improve cash flow and build wealth.
The best Arizona real estate markets include Phoenix, Scottsdale, Tucson, Tempe, and Prescott. These areas have all enjoyed steady population growth, rising median home prices, and a consistent demand for both short and long-term rentals.
The state's most populous city and the capital of Arizona, Phoenix, is home to nearly five million people and has a thriving economy that has seen rent and sales pricing increase year after year. The Phoenix real estate market has heated up significantly in the past few years: the median listing price in 2023 was $514,900, a 14.4% increase from 2022.
The rental market in the Phoenix metro area works well for both short-term and long-term rental properties. Many people visit to enjoy the Phoenix Zoo, Desert Botanical Garden, and nearby Camelback Mountain.
This city boasts high rents and draws in tourists from all over the world, making it one of the best investment markets in the United States for both long-term residential properties and short-term vacation rentals. The city's growing population is mostly young professionals seeking job opportunities in the burgeoning financial and tech sectors.
The average Scottsdale resident makes $32,000 more than the national average, meaning that long-term rental properties can be an incredibly lucrative opportunity. Thousands of visitors flock here each year to experience the McDowell Sonoran Preserve, the many golf courses, and world-class spas.
Cushioned between the two sections of Saguaro National Park, Tucson has high renter percentages and affordable real estate prices, making it a great location for investing in long-term rental property.
The job market here is excellent, experiencing a 3.2% increase in employment opportunities from 2021 to 2022, which ensures consistent rental income for investment properties. Tucson also has a strong tourist industry, with over seven million overnight stays every year. The San Xavier del Bac Mission, the Arizona-Sonora Desert Museum, and Old Tucson attract domestic visitors, allowing some potential for short-term rental property.
Home to Arizona State University and Tempe Town Lake, the Tempe market is one that investors should get in on while it's still affordable. At the moment, the median home price has dropped by 4.7% in the last year, which makes this the perfect time to buy rental property. Future job growth in Tempe is expected to be 49.9% — well above the national average of 33.5%.
Home ownership rates here have dropped by 8.2% in recent years and are not expected to significantly rise, meaning it’s an attractive location for long-term rentals, especially for single-family homes. In addition to college students seeking housing, there are plenty of vacation real estate investment opportunities due to the well-respected ASU Art Museum and the bustling Tempe Marketplace.
While smaller than other Arizona markets, Prescott is a college town with a relatively low median home value, making it an affordable and attractive city for savvy investors. This town in Northern Arizona is home to Embry-Riddle Aeronautical University, Yavapai College Prescott Campus, and Prescott College, making it a smart real estate investment for those looking to buy investment properties on a budget and rent to young professionals.
While its tourist industry is a bit smaller, Prescott boasts the booming Whiskey Row, a street filled with music venues, and several well-respected museums of pioneer history. It also offers access to Watson Lake with miles of hiking trails.
Visio Lending is the leading private lender for Arizona residential real estate investors.
Visio Lending is the nation's premier lender for buy and hold investors offering, long-term loans for SFR rental properties, including vacation rentals.