A+ rating with BBB
Payam H. Raouf
Designated Broker
Arizona Property Management & Investments
As I had predicted in the last blog, buyers are
back and both the new homes and resales are selling faster than ever! Inventory
has gone up a bit but so are the number of homes under contract. New home
builders are offering unheard of incentives some over 20% to lure the buyers
back in. Incentives are so aggressive that even investors are getting back into
the game. I just negotiated an additional $4000 discount on top of the $63000
incentive a new home builder was offering. Deals are to be had. Resales have to
compete with new home builders, some are slashing prices by up to 10%, some are
offering incentives towards closing costs and buying the rates down.
Tenants are out there buying homes. All they
have to do is walk into a new home builders show room, they come out with a
signed contract putting their notices in to move out. New homes builders are
running out of spec homes.
If you are an investor, it is time to move. Cash
here is not trash. It gets you a ton of discounts. Just make sure the builder
will allow rentals in that community, some exclude rental for a year some other
don’t allow rentals below 6 months.
At the same time, investor friendly resale homes
with 3 to 4 bed rooms, 2 baths, 2 car garage, 1700-2300 sq ft, year 2000 and
newer and no pool between 350,000 to $400,000 are selling fast. It’s the new
home buyers' dream home but again cash talks here too. Cities like Surprise,
Peoria, Avondale, Good Year, Glendale, some parts of Phoenix in the west valley
are the most desirable areas to buy a house as an owner occupied or investments. Rents in $1800-$2400 are the most desirable rentals. You can get
decent tenants who will stay for a few years before they can qualify to buy
their own.
We are seeing multiple credit applications on
our rentals again. What you have to watch out for is not the credit scores as
much as the debt-to-income ratio and the job stability.
Pets are the victim of the rental market. We
encourage our investors to buy pet friendly properties. You can charge either extra
deposit or more rent per month or both as them leaving a member of
their family behind excludes some of your best renters.
If you are buying a new
house make sure to look at the taxes and other charges. Even if they impos a special assessment, take that into consideration in the overall
picture of how it is going to affect your bottom line.
(what is Improvement District tax?
An Improvement District (ID) is a means to provide financing of
infrastructure improvements (i.e, water and sewer lines, pavement, sidewalks)
by imposing a special assessment on each property within the former
district. The process can be initiated by property owners or developers.)
As we speak today 4/2/23, the number of active
homes on Realtor's Multiple Listing Services (MLS) between $350,000 to $600,000
is 5,227 and 3,904 are under contract.
Back to rentals: tenants are
staying put renewing their leases for one more year waiting for the buying
opportunity. Landlords are either reducing the rents by a small margin or
keeping them the same and if increase only by less than 3%.
Mortage rates are going down.
You are going to see more sellers put their homes on the market as it is
bringing the buyers back out. There are so many new spec homes to
be had, they will run out fast and we will be back at the resale market
shortage again.
Falling dollar and collapsing banks one after another is
another subject for another time. Things don’t look that promising in short. Watch
a few clips on youtube you get the idea. For the time being, it seems investing in real
estate is a better option.
I will keep you posted again
by the middle of the April as things are progressing daily! Thank you
for reading my blog.
READERS MUST DO THIER OWN DUE
DELIGENCE. THIS IS STRICTLY MY PERSONAL OBSEVATION AND OPINION.
A+ rating with BBB
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