Saturday, April 27, 2019

It seems all the roads to prosperity end up in Phoenix Metropolitan Area these day.

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Payam H. Raouf, Designated Broker

We did it again! Thank you for listening. 

If you back to my last post from July 2018, and even from the start of this blog in 2008, you shall see my predictions about the market trends in Phoenix Metro Area have almost ALL come true!

Here on out, I would focus on the $230,000 to $270,000 inventory in Surprise, El Mirage and Goodyear, SFR 2000 and newer, 1700 plus sq ft , 3 plus bedrooms, 2 plus baths, specific subdivisions and builders. The right ones rent for $1,450 to $1,650.

There are other opportunities out there if you can get to them first. You can also see what you can find in the $350,000 range in Norterra, N Phoenix and N Peoria. They are out there, you just need to move on them quickly.

They are coming by thousands from everywhere, California, Chicago, Ohio, New York, Silicon Valley, New Mexico; It seems all the roads to prosperity end up in Phoenix Metropolitan Area these day. Highways to nowhere have shopping malls and grocery stores bigger than your wildest imagination. There is an opportunity for every size and taste.  Tall, grande, and venti, coffee, ice tea, mocha, frappuccino and banana smoothies for everyone.

You have not missed the boat yet! There are stops at every corner, you just need to be at the head of the line. There is enough to go around for everyone, or is there?

It’s just the way it is. Talk to a professional REALTOR® that specializes in the rental management and has a good pulse on the market as it is shifting fast. This is not a case of going to your  primary care physician first, you need a specialist to help you through the line and onto the helm.

We are on top the market almost 24/7 with no exception. If you are considering investing in residential real estate in Phoenix Metro Area or would like us to team up with you managing your rental property(ies)  Please contact us. My staff and I would be delighted to assist you. Thank you. 

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Wednesday, July 4, 2018

What More Is Possible? Arizona Real Estate Semi-Annual Market Report

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By: Payam Raouf
Owner/Investor/Designated Broker

We are halfway through the year and it’s time again to give you an update.  Good news if you are the seller and better news if you are the buyer!

Prices seem to be continuing to go up. If you have to sell, sell. Otherwise, keep renting it. We have less than 2 to 3 months of inventory on mls. No matter how fast builders continue to build, they cannot build fast enough to keep up with the demand.  I just checked on mls there is only 12973 single family homes active on the market and 8885 under contract as of 3:24 pm. Do the math. There is not even 2 months of inventory left!!!!
More people moved to Maricopa County than any other county in the country last year, according to U.S. Census Bureau population estimates released March 2018.
Population growth in Arizona is forecasted to be 120,000 new people from domestic and international locations in 2018. If this growth accelerates, we will be expecting over 1.5 to 2 million more people moving to Arizona in the next 10 years. Are you surprised?

Phoenix has seen the job market increase by 3.2% over the last year.
Future job growth over the next ten years is predicted to be 40.8%, which is higher than the US average of 38.0%.
Greater Phoenix’s tech sector is experiencing rapid growth, with more and more tech companies locating to the Valley like never before and others being launched here seemingly every week. In the 1980s and '90s, most of the tech jobs in metro Phoenix focused on back office and customer-care centers for companies with headquarters elsewhere. Now, places like Phoenix, Tempe and Scottsdale are buzzing with entrepreneurs and new companies in the tech space.
“We’re beginning to gain a reputation that there’s a real tech community here,” according to Steven G. Zylstra, president and CEO of the Arizona Technology Council.
Our rental inventory mostly consists of Single Family Detached Homes in the $300,000 price range with rents averaging $1850 per month. We cater mostly to upper management of the companies relocating to Phoenix Metro Area. There definitely is a shortage in this niche marketplace.
We see desirable homes suited for our niche market go up to $350,000 to $400,000 soon with rents averaging $2100-$2500 per month. Where else can you get such a return on your investment without risking losing it all? That is not even taking into consideration the historical average real estate appreciation of 6% year over year. In only 10 years, you literally could double your initial investment.  
With that in mind, we stay away from homes under $280,000 for now unless it is a great deal. It’s a crowded market with all the fha home buyers.
Our tenants focus on quality of life, good schools and desirable neighborhoods. There are pockets within subdivisions in certain locations of cities we choose to buy that not only offers just that but also have greater potential for future growth.
What is your investment strategy? Are you looking for a steady stream of income? Is someone else being in control of your financial destiny a concern? Or do you prefer to totally be  in charge?
Give me a call. Let’s see what else is possible. It's that easy. We do the rest.
Payam Raouf, 623-435-6633 Ext: 111

Monday, December 25, 2017


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By: Payam H. Raouf
Owner/Investor/Designated Broker

When you have your team working hand in hand running your business is when you know you are ready to take on more clients.

Property Management is not only collecting rent and paying you; It is a big responsibility both on yours and our part. It’s a financial marriage that, in exchange of a fee, one makes a promise that they will take mental ownership of your property while it is under their management.

It takes years to build a team that has the credentials, knowledge, and training it takes to earn your business.

Technology is a big plus if you know how to best utilize it to cut cost and mange time more efficiently, yet be personal, accurate and responsive. Target marketing adds to your bottom line by reducing your vacancy loses. Tenant placement is more than credit scores and rental and employment verification; It is the right shoe that fits you. Sometimes it is the first, sometimes the last, but either way it’s worth waiting for. Penalties are only due when the laws are broken. Paying detail attention to the changes in laws, rules and regulations whether it is national, state, county or city or at the community level are enough to keep you on your toes. All monies including rents, security deposits , maintenance reserves held by the broker should be accounted for 24/7 at the tip of your finger as if you were logging into your own bank account. 

You know your tenants respect you when they pay rent on time and call you to tell you they got married, had a baby, or are going through hardship in spite of receiving a notice of non-payment.

When you help them make their rental house their home, that’s when the magic happens and everybody wins. A well maintained property is cash in the bank. 

A wise investor picks the right business partner; one that helps them meet their financial objectives with the least amount of worry.

Rental Market Condition in Phoenix Metro:

We have hit a wall! Regardless of substantial rent increase, it’s getting cheaper to rent than to buy and renters are sitting it out!

In 2017 there were three kinds of investors selling: 1. The owners that had their nose barely above water. 2. The ones who bought dirt cheap in 2010 and 2011 and took some money off the table. 3. Canadians who took advantage of the currency exchange in their favor.

Who was buying? A lot of renters and first time home buyers dominated the market in 2017.  There were a lot of down payment assistance programs and sellers contributing up to 3%  towards buyer’s closing costs which fumed the buying frenzy and prices shot straight up.   

Bam! We have hit a ceiling. Buyers are having second thoughts right now: Should they stay put or take the plunge? Leases are renewed for one or some even two years as the result. It is the year of saving for a bigger down payment to avoid paying the private mortgage insurance (PMI). For FHA home buyers with only 3% down, the PMI of ½ or 1% of the loan amount is the deal breaker. Banks are rolling out programs to put them over this hurdle. This year we are going to be kind of flat. Many industry sources predict 3% growth rate up to the 4th quarter of 2018 but by early 2019, watch out! Sellers' market is going to roar back taking prices to new highs continued through mid 2020. 

That should be music to investor’s ears, loading up on good merchandise while it lasts. Looking to throw out some low ball offers? Timing is just right. Now listen:

The dead spot of the market is the $230,000 to $260,000 price range.

Total out of pocket cost of home ownership, PITI, PMI, and HOA for homes between $190,000 to $220,000 is around $1,350 to $1,500 per month. That is just about the same as what they would pay for rent for similar homes. 

$230,000 to $260000 price range, payment is about $1600 to $1750. You can rent those for $1550 to $1600 and someone else pays for major repairs. These are nicer homes of course but its out of their reach. homes in this price range are kind of suppressed now but not for too lone. If you come across one, make an offer! 

I would probably hop over the $260,000 to $275,000 range unless it is an opportunity you cannot pass on!

The $295,000 to $335,000 is the sweet spot right now as long term investments. That’s where the money talks and there is less competition. More desirable areas, loaded homes, better managed cities and communities, top notch school, sounds like we are back to the location, location, location. Does it not? Some pockets in North Phoenix, N Peoria, N Glendale, Chandler, Gilbert to name a few.

So who is buying investment properties? Lots of cash buyers! New Money, Old Money, IRA conversions money, 1031 exchange money etc. Real estate is a tangible asset. Plus you have full control over it yourself as oppose to a fund manager. With DOW over 25000, Bitcoin over $15000 just in 12 month, taking some chips off the table and investing it in real estate maybe a good option. 

Next time you are heading over to Phoenix by plane take a look around you. A) Isn’t the plane full? This is not only a winter destination; It is a place for doing lots of business. Phoenix Metro was sitting somewhere close to 4.5 Million people according to Google Data in 2015. It has grown by a good 100,000 plus since and the pace is accelerating. At the current growth rate, it should reach 10,000,000 people by 2035-2045. B) Is there enough water to support this tremendous growth? Water is never enough!  Even if they keep some of their large farming operations intact, there is more water under this land than it is above it. The more homes, the more the parks, greenbelts and landscaped homes are going to make the hot summer a thing of the past. C) Most infrastructures are in place. National Big Box Distribution Centers open up on weekly basis somewhere in the Valley. Unemployment is averaging 3.25% and in some towns as low as 2.7 %. Both High and Low tech workers are needed. Is the person sitting next to you coming to Phoenix for business? Maybe even planning to buy a house. One out of 3 chances they are. We're building highways to nowhere!? Enough said.

Everywhere you look, they are turning dirt to built homes.

If you invest $300,000 in the right real estate opportunity in Phoenix Metro, you could walk away with $600,000 NET in your pocket in 10 years!!! There are similar opportunities for investors with only 30% down payment!

Please click on this link and join Arizona Real Estate Investments and Management Group on Meetup and let me show you how.

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 (888) 777 6664

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Wednesday, July 19, 2017


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 Phoenix Real Estate Update. Show me the money.

By: Payam Raouf
Owner/Investor/Designated Broker
I am so excited to report that THE REAL INVESTORS ARE BACK!
This time it is all about long term investment, up to 10 years or so. They are NOT buying just ANYWHERE. They are buying QUALITY homes in SELCTED AREAS of the market. It is easy to generalize and say buy in N. Phoenix for example. However, that is not going to cut it any more. Where in N. Phoenix? Which subdivision? What are the school ratings in the area? Who manages the H.O.A.? Who is the builder? What is the percentage of the owners' vs tenant occupied? Floor plan, Location, Location, Location.
Tenants have not seen rents so high in Arizona EVER. $1250 is the norm plus lots of $1500 to $2000 even some up to $3000 a month for single family home rentals. I have never seen so many 700 credit score applicants fighting over $1500+ rental in the past 10 years.
We were renting the same homes 3 years ago for $250 to $350 less per month and rents keep going up along with the prices.
Individual Investors, or a pool of them, are buying rentals in the low to mid $300,000 range. It makes a lot of sense!
A)  They get top dollar for it from more qualified tenants. Good tenants take care of the property better. They have less maintenance charges, less turn overs and more money in their pocket.
B)  They get better yield in the long run, higher percentage of return and highest appreciation.
C) Desirable areas sell faster for more money so when they want to cash out, it’s quicker.
D) Fewer headaches mean more time to make more money.


These are the most desirable properties which bring you the most rent on Monopoly Game.
I read the following report below - very informative. I would  like to share with you this:
"According to WalletHub 8 Phoenix-area cities hit top 50 healthiest US housing markets. The website had 14 criterias to determine rankings. Those criterias included pricing, days on market, affordability, and other factors.
Texas topped the healthiest markets list with the number 1 positions for large, midsize, and small markets. Those cities were Austin, Plano, and Frisco. Overall Arizona had a good showing on the list. Seattle and Denver were #2 and #3 for large cities. 
Here are the Arizona cities that ranked among the healthiestreal estate markets

·        11 Midsize - Gilbert

·         22 Midsize - Chandler

·         28 Midsize - Tempe

·         35 Midsize - Peoria

·         36 Midsize - Scottsdale

·         40 Large - Mesa

·         46 Large - Phoenix

·         49 Large - Tucson

·         55 Midsize - Glendale

·         88 Small - Surprise

·         123 Small - Yuma

Overall Arizona rental market has seen an increase in rents since January 2015 and inventory is low. This has increased demand all throughout the Phoenix area including Tucson. Particularly areas of strong demand where schoold districts are ranked high among National average.
With the surge of rental prices investors are finding tenants quicker that pay a premium. Average annual return on investment has stuck around 9% but we have seen better tenants and have been able to minimze investment risks. It is a great time to buy and hold investment properties in Arizona. 
Not every home in the valley is a good investment. Look for desireable areas that have good school districts, low crime, shopping close, and good neighborhood zoning. These factors can help attract the right tenant for your home."

Please give us an opportunity to help you with all you rental investment properties from acquisition to leasing, managing and sale. Thank you.

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 (888) 777 6664

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