Inflation will soar, dollar will fall and home prices and rents will continue to rise in Phoenix Metro.

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11/4/2024

Market update. No money No Honey!

People have literally ran out of money. Almost everyone is renewing their lease because they don’t have the money to move. Rents have stayed steady. Home prices have gone down slightly (2.5% to 4%), rates at %4 to 5% are not at near sight. There is only 272 single family homes in the entire Maricopa county as of today 11/4/2024 with the following criteria: price: $400,000 to $450,000 , 4 bedrooms, 2 baths, 1700 to 2400 sq ft, year 2000 and newer and no pool. Overall inventory is at 22000 but SFR detached Inventory is only at 1515. Mortgage have gone back up slightly. Its cheaper to rent than to buy even with 10% down. I will give you another update next month. Thank you. 

By: Payam Raouf
Designated Broker
7/15/24

It doesn’t matter which political party is in power, they both are the wings of the same bird, The American Bald Eagle.

Home ownership is out of reach for most people especially young families. No matter how fast they run they cannot catch up with their bills.

Unless rates are back down to 4 and 5 percent, it is not going to make a difference. But how?

Our country is more divided than ever, our military is spread out too thin, it seems we are at war with half of the world, Russia is breathing at our throat at Guantanamo Bay, Europe cannot contribute enough to NATO, Americans now owe a collective $1.13 trillion on their credit cards, banks in US have serious solvency or liquidity problems, China, Japan, Russia and England are selling US Treasury Bills by hundreds of billions of dollars, The BRICS economic bloc, which includes Brazil, Russia, India, China, and South Africa, has been challenging US global leadership in recent years, even our closest allies like Saudi Arabia and Turkey are shaking hands with Russians’ and Chinese and 60% of African counties are heavily indebted to China. We are losing our footprint all over the world. We are still the strongest economy in the world but for how much longer? What other alternatives do we have except borrowing more money? We are currently borrowing one trillion dollar every 90 days to run the government, it seems like a Ponzi scheme to me! To pay off the National Debt, we will have to devaluate the dollar or let the inflation run its course or go bankrupt. 

 Average rent for a 4-bedroom house in Phoenix Metro is around $2000 to $2500 and it could fetch more if it is in a desirable area. Home prices have gone up 4% over the last 12 months. Rents are holding steady and up slightly by 3% at the same time.

This inflation is not going anywhere but up, no matter who our president is, at least for a few more years if not indefinitely. What are the other alternatives to keeping your money in the bank?  

Over 30% of all billionaires in America are real estate investors. There is more than one way to invest in Real Estate. I am only referring to single and multi-family residential properties in Phoenix Metro. 

No one can predict the future and I remain optimistic that we can pull through this storm together. We are "The United State of America", united we can. 

I am a small-scale investor and I do what I know best.  We buy low, update, rent and manage properties professionally with our team until the right time comes to sell. We treat our clients’ properties like our own. On average our tenants stay with us for about 5 years.  When they leave, with a quick makeover, it is back on the market.

To me this is a no-brainer.  You buy it and let some else pay your mortgage to hedge against inflation!  Well, it’s not that easy. You have to team up with an established property management company to help you navigate through these changing times. Does big mean better, not really. You don’t want to be lost in the process and lose control of your expenses. We are large enough to be reliable, small enough to be responsive. Buying the right property to match up with the right tenant is they key to our success.  Keeping the costs down while maintaining the property and keeping tenants happy are other important factors to take into consideration when you hire a property management company.

Four-bedroom properties with 2 baths, 2 car garages, 2000 to 2500 sq ft, less than 20 years old with no pool are in the $400,000 to $450,000 range. They seem to be the  ideal rentals over here.  They will rent for $2200 to $2500. You can find most of them in the NW valley, Surprise, Peoria, Avondale, Goodyear, El Mirage and Glendale. As of today 7/15/2024, there are only 109 properties with such criteria available in the entire Maricopa County. As an investor you need to put 35% down to cashflow.

They have built thousands of condos and apartments everywhere you look. They are not renting for as much as they had projected. They offer all kinds of incentives and rental concessions to lure tenants in; they take almost anyone who can “fog the mirror”.

From my experience, tenants would rather live in a community of single-family home with reputable school district.

I don’t see the repeat of housing crash of 2008. Our only choice is to keep borrowing money. Inflation will soar. dollar will fall and home prices and rents will continue to rise. I have read a few articles that we are going to become a renter’s nation.  So, join me and let’s jump on the band wagon to success. There are many tangible assets you may consider but real estate remains the billionaires #1 choice!

Blogging off, Payam  

God Bless the USA 

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Disclaimer: This is my only personal opinion. You must do your own due diligence before making a decision. 

Phoenix metro housing is on steroid. Take refuge! 7 to 9 percentage mortgages are around the corner.

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Payam Raouf
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Phoenix metro housing is on steroid. Take refuge! 7 to 9 percentage mortgages are around the corner.

It is very uncertain where the world is headed to but one thing is certain the interest rate will continue to go up and dollar will lose ground against most international currencies. When? It depends on too many factors but it is not that far off. As the result, home sales are coming to a halt. No one wants to sell except new home builders dumping their standing inventories offering incentives unheard of. They are almost done with that as well and some are even daring to release new lots! They have shareholders to answer to.

Meanwhile 7 to 9 percentage mortgages are around the corner. Debit ceiling crisis solved or not, more government borrowing at higher rate means someone has to hold the pan, the tax payers.

The fact of the matter is everyone is passing the buck onto the next person. My Gosh, if you own a business or not how many phone calls do you get that says, here is how we can “SAVE YOU” more money? LOL. I mean, everybody is trying to sell you some sort of SERVICES, all commission based.

What I am trying to say, household income in Phoenix metro seem to have doubled in the last 5 years. Everyone has two jobs and no one seems to be complaining about the higher cost of living. Certainly, I do not hear that from our tenants! They are pretty numb to it. Of course, the last three years landlords have increased the rents by almost 40% and this year they are giving the tenants a breather by either keeping it the same or raising it by 3%.

The seniors are the ones who suffer the most and we are one of the states that have the most of them. They are on fixed income and 10 even 20 percent increase in social security benefits has none or very little effect on their everyday life. Homes in 55 and over communities are having the least increase in price and rent.

Tenants went on rampage last three month clearing up the glitch in the new home standing inventory. Home prices have come down some but last couple of months it seems the resale inventory is moving faster and bringing multiple offers in the $350,000 to $450,000 range.

It’s all now wait and see game.

Unemployment is down, people getting used to the Hyperinflation. An eye for an eye. You raise the price on me, I raise the price on you. It will go on till it all blows up in your face. Even at that I recommend everybody, young and old, investor or renter, BUY A HOUSE NOW, because when it does, you can heat up your entire house with stacks of cash in your fireplace. Cash is Trash.

History will repeat itself but this time it is on steroids. So, if you think ok, I wait, by then you need to hurry to catch up to the next station see if you can get on the next ship and keep going. 

If you are waiting for the government to take care of you, God Bless you all, because Dr. Kevorkian is coming for you!  In 30 years the house you bough now for $500,000 it may be worth $5,000,000 if the dollar is still around.

All I am saying is we are a great nation and we have benefited from our strength for the past 75 years and we are going to stay strong as long as we can hold on but other nations are catching up fast and at the best we need to be prepared. Hope for the best and prepare yourself for the worst.

Gold, Silver, Bitcoin, bonds, stocks or real estate? At least you know a house is there and you can sell, trade or rent it at anytime and price and rents adjust to the rate of inflation . Where are you going to keep your gold and silver? Bitcoin, bonds, stocks, I am too ill educated to deal with things I have no control over. 

Today at 5:41 pm on 5/24/23 there are only 366 detached single family homes, 2000 and newer in the 350,000 to $450,000 range available on Realtor Multiple Listings Services (Flexmls) in the entire Phoenix Mero (Maricopa County) with these criteria: 3-4 bedrooms, 2 bath and up between 1700-1400 sqft with no pool. This seem to be in most people’s budget. 

Let’s leave the dense multi-unit family communities for next blog.

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Please do your own due diligent. Do not make any decision based on my opinion. This is only my personal opinion.  

This is my personal blog and any views or opinion on this blog is personal and belong only to the blog owner and do not represent those of people, institutions or organizations that the owner may or may not be associated with in professional and personal capacity, unless explicitly stated. Any views or opinions are not used to malign any religion, ethical group, club, organization, company, or individual.  

We haven’t seen 80% inflation yet. We have not seen 21% interest rate yet. Rental Market Evaluation 4/26/2023 in Phoenix Metro Arizona.

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By Payam Raouf
Designated Broker

We have had it too good for too long. No one wants our money (dollar) any more. We might as well print it on the toilet paper. A box of 8x11 copy paper at Staples was $89 today. We used to buy it for $29 two years ago. I bought the last box on sale for $59. 

We haven’t seen 80% inflation yet. We have not seen 21% interest rate yet. It is not quite around the corner. I have heard from some experts it’s 5 to 7 years away. It is a work in progress and not going to happen overnight.

Saudi Arabia is not dropping the petrodollar yet, but their activity suggests they might be considering other options. Saudi Arabia might be the keystone in the petrodollar too, and if for example, they begin to trade oil in yuan, this may cause a domino effect, and the other members of OPEC might follow suit. 

Homes that are $400,000 now could be $1,000,000 and then $2,000,000 and so on and a $2500 rental will be $5000 and $7500 accordingly by then (2027-2029). 

Of course, average household income will have doubled by then as well and is going to be around $150,000 to $200,000 per year. I look at credit applications all day. Average household income has increased substantially in the last two years and so have the rents. A $1200 rental is now $1700 and a $1700 rental is now $2400 just within the last 2 years and I don’t see most renters having any difficulty paying it.

Folks, I am buying rentals as we speak. I put my money where my mouth is.  That’s how you can keep up with a runaway inflation. Everyone needs a roof over their head. They will find a way to pay.

If I were a tenant, I would get off my butt right now and start looking for a house to buy today.

Institutional landlords are building multifamily and bungalows for rent everywhere you look in phoenix metro area. They want your money and will keep you a renter for ever if they can.

New home builders are literally giving them away.  It was on the news today that you can buy them cheaper than resale. Realtors receive emails from new home builders constantly that they are offering substantial discounts up to $90,000 on some standing inventories and even buy the rate down to make them more attractive. They are in the business of building homes. They sell more houses with less profit they get the same result as if the sell less at higher prices. EX: email from ******* Homes April 14, 2023: Our HUGE incentives will continue through this weekend!!  Please do NOT miss out on ‘up to’ $90,000 incentive :-) WOO-HOOOOOOO!!  

 

Banks are making money hands over fists. Did you see how much profits the bank made in the last quarter? They also go out of business if they don’t give loans. They will find a way to take your money. Don’t worry. Either you are paying rent or a mortgage. It’s your preference.

They say I write this because I am a Realtor and are pumping it to sell more homes. That’s fine I don’t care what they say. I am very blessed with a lot of clients. I am in rental management business. I see how investors and tenants are taking advantage of this market.

There goes not a month that I don’t get a few phone calls from tenants that we are giving our notice to move out, we bought a house and from investors asking where is a good place to buy and what rent they should expect to get.

As of today 4/26/2023 at 1: 52 PM, there is only 515 resale homes on MLS in the entire Maricopa county with 4.5 million residence with the following description: detached single family homes between $350,000-$450,000 with 3 to 4 bedrooms and more than 2 baths , 1700-2500 sq ft, build after year 2000 with no pool. These seem to be the most desirable homes to buy in the valley.

Once the new homes standing inventory runs out the resale home prices will go back up even higher. We have seen a substantual price increase in March 2023 already in Metro Phoenix 

Life is beautiful. Enjoy it and God Bless.

https://finance.yahoo.com/news/home-prices-rose-more-than-previously-thought-in-the-first-three-months-of-2023-202355995.html

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Rental Evaluation

Disclaimer: Please do your own due diligence. This is only my personal observation and opinion. Do not make a decision solely on the content of this blog.

How is the rental Market in Arizona? April 1st 2023. Market is moving fast.

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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. 

 

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How is the real estate and rental market in Arizona?

 Payam Raouf
Designated Broker
2/15/23

The Current Real Estate and Rental Market Conditions in the Phoenix Metro Area in February 2023

You don’t have to watch hundreds of videos on YouTube to understand the housing market in the Phoenix Metro area. Just take a look around your neighborhood to get a sense of it. There are not many “For Sale” signs,  just a few here and there, unlike 2008-2011 when nearly every other house had a for sale sign in front of it. 

Whether you are a renter or a landlord, you’re likely feeling the pain of the market. Rent has gone up significantly, so has the cost of acquiring and maintaining a rental property. Most renters are struggling to keep up with inflation, while landlords are passing on their increased costs to tenants, who are working two jobs to make ends meet.

This vicious economic cycle, where everyone is passing the buck continues as the Fed prints more money, causing more inflation and robbing Peter to pay Paul and vice versa. Home prices have come down slightly, but there is less inventory available. Homeowners are comfortable with their mortgage payments and reluctant to sell, while investors are unwilling to sell as they can’t replace it with another tangible asset to hedge against the hyperinflation. 

Qualified tenants, who are fed up with the rent increase are now buying homes, even if it costs a bit more. Three- to four-bedroom homes under $450,000 in desirable neighborhoods are selling quickly, sometimes with multiple offers, as sellers offer incentives to buyers to buy the rate down to lower their payments. As of February 9th, 2023, there are only 6,300 single-family homes in the entire Phoenix Metro area, and just 370 single-family homes between $350,000 and $450,000 with three to four bedrooms and between 1700-2200 square feet available for sale!

On the rental side, evictions are at an all-time high, rental applications are not looking that great, with most applicants disqualified due to high debt-to-income ratios, recent evictions, bankruptcies, and other issues. Landlords are keeping rents consistent or just slightly raising them to keep good tenants in place, as it’s hard to replace them in this market. Homes are also getting older and requiring more maintenance, which has become more expensive, both in terms of material and labor. 

Investors are sitting on the sideline with a lot of cash and with a falling dollar, buying a rental property is starting to make more sense. Investors are keeping a close eye on the market and are likely to get back in soon once prices level off, likely in the 3rd and 4th quarter of 2023. 

My bottom line: whether you’re a renter or an investor, it’s time to buy a house. You won’t regret it in the future. it’s important to do your due diligence before buying a house, especially as schools are becoming crowded and quality of life and crime may be affected in areas where there’s a lot of new construction.  

We offer services to help investors buy, rent, manage, and sell investment rental properties throughout the Phoenix Metro area. If you would like to learn more about our services, please click on the link and let us know. Thank you. 

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How is the rental market in Arizona? Ask a Property Manager.

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By : Payam Raouf
Designated Broker/Owner

If you want to know the state of the economy, talk to a property manager. We see it all: Who is coming, who is going, where they are coming from, where they are going to, what they do, how much they make, what car they drive, how much they owe, who is paying on time and who is falling behind, and on and on and on. 

That’s just what you see on the surface. If you look a bit deeper, it really makes you wonder! How do tenants deal with these sudden rent increases recently? For example, a 3 bed, 2 bath, 1,500 sq ft house in an average income neighborhood in Glendale rents for about $1,800 to $1,900 these days when just a couple years ago the same home would have rented for about $1,200 to $1,300.

The other day I was in-between appointments and had 20 minutes to kill so I thought I’d grab something quick to eat. I walked into a McDonald’s and ordered a quarter pounder. The clerk combo-ed me at $10.75. I sat to eat, opened the box, closed it immediately, picked up the tray, took it back to the cashier, and said, “I think I picked up the wrong order. This is the One-Dollar Burger”. She looked at me, looked at the burger, and said, “That is a quarter pounder, the prices have gone up. If you want another patty it is $2.25 more”. Then she asked, “Do you want another patty?”, to which I said, “No”. I went back to my seat, ate disappointedly, and left to my appointment. Who was I going to argue with, the cashier? She probably has plenty of her own worries to think about already.  

That evening on the way home, I thought I am “the cashier” myself! When the owner instructs us to raise the rent $600 and the tenant reacts in confusion, “$600?!”,  I say, “Yes, the owner says prices have gone up”.

According to Google: ”The salaries of Fast Food Cashiers in the US range from $16,570 to $27,324”. Let’s say the cashier makes $27,324/yr. That’s about $600 gross per week. The month is one week short of covering her rent.

After a couple of days delay in response, one tenant in a similar situation told us, “I don’t want to but I don’t have the moving funds. I will take it for another year.”

Another tenant, after seeing a $400 rent increase message on their portal, called us and said, “I work for the post office. I only received a $300 raise this year. I cannot afford a $400 rent increase”.

These days, people could be using their vacation time and sick leaves to drive for Uber and DoorDash to make the end's meet. And yes, that tenant ended up signing up for another year too.

A retired tenant on fixed income keeps calling us wanting to know if the owner is selling the house or renewing the lease. The lease is not even up for another three months.

Another tenant renewed their lease with a $500 increase per month just to buy enough time to find another place for less then packed up and moved two months later breaking their lease.

Some seek help from charity organizations and local governments to pay their rent for a month or two until they can figure out how they can stand on their own. On occasion, a few tenants decide to surrender their keys by choice or through legal means. 

Who is out there looking for a property manager these days?

1. Some individuals or companies are getting out of the property management business. Either themselves or the investors call to see if they can find a good fit to manage their properties for them.
2. Some homeowners call to gather information to see if it is better to rent or sell their home. They want to see what their options are.  Some have already had their property for sale for a couple of months, dropped the price once or twice but it is still not selling. 
3. Some owners, who purchased a new build a year ago and just closed on it now, want to know if renting is a good option. Sometimes it’s their only option if the builder doesn’t allow them to sell it for a year or two after they close. 
4. A few are still fishing for deals knowing they are late to the game. At 6% interest rate even with 25% down, how can you break even when your rental proceeds do not even cover all your costs.  If you have money to pay cash, there are deals to be had. Some stressed  selling is going on.
5. People moving in together to reduce their living expenses. They rent one house and move in with each other. They call to see what they can get for their house and if it makes sense.
6. Some homeowners have been renting their home on their own. Either they have not raised the rent for a long time or the tenant is not paying them on time or have fallen behind. They need a new face to contact them and make things right.
7. Inheritance. Those who have inherited a property will either sell it right away or rent it out for a year or two to see how it works before they decide. 
8. Parents buying a home and renting it to their kids hire a property management company to collect the rent and manage it for them.
9. Owners that are retiring and want to travel or no longer want to deal with the day to day business of taking care of their rentals.  

I still get calls from buyer’s agents, “Would you like to receive a cash offer on your house?” Many of the houses they buy will eventually end up on the rental market too.

It is going to get tougher for a lot of renters out there to pay the rent. Many have already run though their savings and some are in danger of losing their jobs. Credit bureaus, per an online search, show many have maxed out their credit limits already.

Experienced investors hire a management company that market their properties on the Multiple Listing Services (MLS) as well. The more applications you get, the better the chances are you’ll get the right tenant. Happy tenants will stay longer, are more likely to pay rent on time and take care of your property. 

Less repair and less vacancy means more in your pocket.

We are about to witness thousands of trendy new apartments with tons of amenities, pool and all, hit the market soon. Once they put their management and maintenance teams in place, they are ready to lease them out. You are going to see all sorts of move-in specials.

Rental inventory on MLS shows it is ticking up but it will be accelerating as more properties hit the market. The right marketing approach and having a strong team behind you is crucial to help you maneuver through these choppy waters.

The market went up way too fast but it is working its way down one step at a time. That’s what the Fed Chairman, Jerome Powell, is referring to: A “soft landing” doesn’t mean home prices and rents going back down at once. It’s a period of adjustment for both the landlords and the tenants. I don’t think this time around is going to be as bad as in 2008-2011.

Right now, the dollar is holding up pretty strong. But should it fall, what better place to invest in than Real Estate? Cash is trash, you might have heard it lately. At best we are heading towards stagflation; A time of slow growth, high unemployment, and rising prices.

I am not a financial advisor nor have a crystal ball. I tell you the way I see it from in the trenches and following some financial videos online.

If you want one-on-one time to discuss a particular situation you may have or want to invest in a rental property in the Phoenix Metro area, please Click Here to let me know how I can assist you. I will personally contact you to discuss your options. 

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How I see it in the trenches here on the front lines. Arizona Real Estate/Rental Market Update.

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Payam Raouf
Designated Broker

11/26/2021

I have come to the conclusion that the market will peak off again after a short pause. That’s at least how I see it in the trenches here on the front lines.

 

I have been in the midst of it all since 2003!  I flew into Phoenix with two other brokers from Vegas in May of 2003 after the market started showing signs of cooling off there.

 

I picked Surprise, they picked Queen Creek. In Queen Creek, we drove through some rough muddy roads on the way to a new home subdivision that turned me kind of off. I had seen a drawing of what is now the post office complex on Bell Rd by Sun City Grand in Surprise and the hotels and shopping center at a developer office in Las Vegas prior to flying in.

 

I think that day I put my name on 20 to be built houses by Pulte  at Cotton Farms in Surprise. When I went back to Vegas, we immediately transferred those to the investors and the journey had just begun! Picking up one to three investors at the Phoenix Sky Harbor airport daily, taking them to a subdivisions, signing them up for a few properties here and there, and kept doing it for a good one and half year mostly in the west and northwest valley area. 

What a ride it has been since. Two BIG ups and one BIG down so far and everything in between. 

 

What’s next?

 

The game is changing. There is more competition for the same product, affordable single-family homes for the purpose of turning them into rentals. Not all homes make the best rentals. Unfortunately, that’s not what we see happening out there! Buying a desirable rental property is the key to your success and not all agents are in tune with that market.

 

Don’t expect any exceptional deals! Inflation has already got the best of it and is not going anywhere anytime soon! Not quite yet, but soon, you maybe able to find what you are looking for at slightly lower price than todays values. This window of opportunity is a very small and possibly towards the second and the third quarter of 2022. If you find the right one between now and then, take it.

 

If you are looking for immediate cash flow it is definitely not the right market for the time being. The return is not that great but with the right down payment it keeps you afloat for the first couple of years before it goes up the 3 to 5 usual percentage. At long as it appreciates at the same rate of inflation and above, it should be ok. With all the new money put into the circulation there’s only way it could go back down like in 2008; a natural disaster of some sort or an event somewhere in the world that is going to affect us directly. Riots and Chaos is short lived.

 

Everywhere you look they are building multifamily housing of some sort with many towards completion. Currently a lot of families and friends are moving in together to afford the rents. Once they move out into these units, it relieves some pressure from the SFR rental market, that is more like a year from now or so. It is expected that some of the other iBuyers like Zillow are going to stop or slow down their purchases substantially as the Fed is tapering down their asset purchase.  

 

What the cash iBuyers have been buying in 2020-2021 are mostly 4 bed room, 2000 and newer, properties around $350-425K that rent for $2,000 to $2,500, just like in 2010 and 2011 when they were buying almost every property at the auction at over the market value. Look at them now! What did they know?

 

It's simple. There will more people renting in the future than buying. Renting is not necessarily cheaper but you can work remotely from anywhere. Why tie yourself down to one place or another for too long?

 

They are moving a lot of distribution centers to Phoenix metro as well as some high-tech industries. Once we pass through this hurdle, market should get back to its normalcy. It would take a few years maybe three to even four.  

 

There will be a place to live for everybody across the board.

The influx of population to Phoenix is slowing down a bit for now. We used to have more out of state applicants in management position applying for our properties. Now a days, it is mostly the folks who come here to work at these facilities. 

In about five years Phoenix Metro may become one of the main tech hubs in the country as fast as they are are moving in ; Intet, Taiwanese microchip manufacturing facilities, Microsoft in addition to what we already have. 

So, expect a short pause before the prices go back up to the next level.

Yes, you should invest for the long run. Speculation is what got us where we were in 2006. This time is different; Yet, don’t get too excited to pay over asking price on the wrong type of rental investment. There is NO rush in this market. Do your due diligence first.  

 

Please Click Here and tell us what you are considering buying. We will do a FREE rental analysis for you! 

If you have a rental property and you want us to rent and manage it, please Click Here.  

Thank you.