If you are considering purchasing an investment property in the Phoenix area, single-family homes are a great option. Single-family homes are in high demand and have a higher rate of attracting and keeping long-term residents. They also appreciate in value over time. If you are in the market for an investment property, here are some hints that we hope will help you to choose the right property.
- Fixer Upper or Turn-Key?
Finding a bargain-priced fixer-upper might seem like a good idea, but quite often the price tag of repairs end up higher than anticipated. Simple cosmetic fixes can end up requiring more extensive repairs, or lead to the discovery of larger issues. All the "fix-up" costs need to be added to your rental margin calculations. Buying a turn-key property, on the other hand, will allow you to generate cash flow right away, and with Real Property Management Phoenix Metro as your property manager, you'll have tenants lined up and ready to go. If you are considering a fixer-upper, make sure to hire a qualified home inspector to identify any serious issues that aren't visible to an untrained eye.
- Have Your Financing In Place
Single property homes don't last long in the Phoenix real estate market, so when you find the right property, having your financing in place will help you move fast. Be sure to compare the different financing options available to find the right fit for your situation.
Yes, it sounds cliche', but shouldn't be ignored, location is a huge factor when choosing an investment property. If you are unfamiliar with the Phoenix area, contact one of our property management experts at RPM Phoenix metro, and we can point out some neighborhoods that might have potential opportunities. You can also use online tools to research neighborhoods, schools, crime rates, public transportation, shopping, dining, and other features that can affect the appeal of the area.
- Return on Investment
Your investment has to make sense. The capitalization rate in the Phoenix area usually ranges between 6% and 10%. To find the capitalization rate for a potential investment property, calculate your net operating income (rents minus expenses) and divide it by the home’s sales price. Be sure to include things like property taxes, which you can get from the county assessor’s office, association fees, and any additional insurance costs. On average, it’s best to keep total expenses to about 50% of the gross rents – this is known as the 50% rule. If any property you are considering doesn’t offer a good return, keep looking for another opportunity.
Using a professional property management company in Phoenix will help ensure that you'll enjoy success with your investment property. At Real Property Management Phoenix Metro, we handle the important tasks for you. This includes marketing, lease agreements, tenant screening, rent collection, maintenance, emergency services, evictions, and much more. We have the expertise to reduce your costs and help keep your profits high. With our competitive pricing and guarantees, you can be confident that your real estate investment is in the right hands.
Call For A Free Consultation or Property Management Quote - (602) 368-5730