Phoenix, Arizona may be the hottest rental market in the country. With rent prices surging 28% over the last year and a price-to-rent ratio of 26, the area is ripe with rent potential. Whether you’re a real estate investor, homeowner or aspiring landlord, there’s no better place to be in the market than Phoenix.
2022 rental market snapshot
Phoenix is a landlord’s market with soaring demand and vacancy rates as low as 3.8% (the lowest in 20 years). The average rent for a studio apartment increased by 7% in January 2022 to reach an all-time high of $1,145, while 1-bedroom apartments jumped by 2% to $1,275.
Renting in Phoenix is becoming the go-to option for residents, with 36% of households being renter-occupied. The population’s median age is 34.4, with 30% of the total population falling between the ages of 20-39. This is an ideal demographic for real estate investors, considering that 72% of the rental accommodations in the United States are occupied by those 44 and younger.
Phoenix maintains its crown as the top metropolitan area in the nation for net migration for the third year in a row. The city is growing faster than any other in the country, adding 200,000 people over the last decade at a rate of 11.2%. More people means more housing demand, and skyrocketing home prices (up 32.35% year over year) make renting the more affordable option.
Booming opportunity for real estate investors
Real estate investors have noticed the blossoming opportunity, buying up more homes in Phoenix than any other city in the country. Experts predict additional new inventory won’t be sufficient to meet demand, and incoming residents will need to look in neighboring neighborhoods and suburbs to find affordable housing. High home prices might deter some investors and would-be landlords, but experts expect housing value to continue climbing throughout 2022. The national average is estimated to be around 14.3% in growth, while top markets (including Phoenix) could see higher numbers than that.
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Homeowners in Phoenix enjoyed a 102% sale-to-list price ratio in 2021, indicating most property owners received at least the asking price on their homes for sale. This decreases risk for investors by ensuring they get market value for their appreciating homes (while renters pay the mortgage).
New services enter the market
New services like Nomad have recently launched in the Phoenix metropolitan area, giving homeowners new options for buying, renting and selling rental properties. Nomad is an appealing option for landlords and rental investors due to a handful of offerings:
- Guaranteed rent: Landlords can get paid on the first of every month, no matter what — even if the tenant moves out.
- Top-notch marketing: Nomad’s marketing and leasing teams find tenants with professional photos, 3D walkthroughs, listings on 20+ websites, and daily showings.
- Hands-off experience: Nomad can handle maintenance, repairs and collecting rent.
- 24/7 on-call resident assistance: No more late-night emergencies. Let Nomad’s team handle middle-of-the-night distress calls.
- Buy, rent, sell: All your real estate needs under one roof. Nomad can even guarantee your rent before you buy a new property.
Nomad isn’t for just property owners, though — it’s also for renters. While Nomad doesn’t set market prices for homes (the market does), the company aims to alleviate the stress of finding and affording a home. Renters that go through Nomad get access to top-notch properties, flexible leases, a 24/7 personal concierge, and Nomad helps them build credit and save when they buy a home themselves.
Short-term rentals convert to long-term
2022 may be the ideal time to convert your short-term rental to a long-term unit. Additional state, county and city regulations on short-term rentals make it more attractive for landlords to switch to long-term models, and it also helps them capitalize on record-low vacancy rates and more passive income.
Closing thoughts
With house prices skyrocketing, homeowners in the Phoenix area have an amazing opportunity to rent their home while it continues to appreciate. Guaranteed rent offers ensure tenants pay the monthly bills (and more) while real estate assets grow in value year after year.
2021 was a record-breaking year for the Phoenix metropolitan area on many fronts, and all signs point to the momentum persisting through 2022 and beyond. Real estate investors and landlords aren’t too late to capitalize on this opportunity — the timing is still golden.
Nomad protects residential rental property owners from costly vacancies and reimagines the long-term rental experience to make it better for everyone. Nomad guarantees rent for long-term rentals, finds vetted residents (or you can bring your own), reduces risk, saves time and can help owners with property management (if needed).
Author: Nomad
Source: https://www.bizjournals.com
