Its not just the sunshine! We have a freeway in Scottsdale, yes! A Nordstroms, D-Backs baseball, NHL Hockey,Phoenix Suns and of course the Arizona Cardinals a lake in Tempe and more restaurants in north Scottsdale that you can shake a stick at.
Our real estate market expanded and appreciated, finally...It all began to turn around in 1993. Right now 100,000 homes per year are changing hands (new & resale). Experts say we will grow by nearly 800,000 people over the next ten years. The Scottsdale air park will be the largest employment cluster in the valley.
Home values and prices have increased. In 1993/94 Scottsdale builder specs -homes were going for less than $400,000...try finding one now for less than $1.2million. In PV, forget it unless you've got $1.8 million for a new spec home.
With that said I want to encourage you to take a look at investing in rental homes. With the growth and despite slightly higher interest rates (remember it's an election year, they will probably trend down from here), we will still probably see 5-7% percent appreciation gains per year.
Here's a scenario that illustrates the potential - lets say you own $1,000,000 in rental real estate - at those rates you'd expect to have your properties appreciate $70,000 plus per year, relatively passively. Renting only to people with clean credit reports pretty much takes the hassle out of being a landlord, usually renters won't trash their credit over a rental home. By the way, depending on your income the potential tax advantages are real nice come April 15th! I have rentals and look at it as a way to actually retire before I reach 80!
How much cash does it take to get started? Only 10 percent of the list price and around 1-2 percent in closing costs. So leveraging $125,000(including closing costs) dollars to own $1,000,000 in real estate and passively creating a sizable net worth gain per year starts to look good, right?
To aid you in this endeavor, go to my web site and get free weekly active listings emailed to you automatically. A little trivia about my site, it generates around 1000 page views per week. Why? Its built to serve you, rather than promote me.
Never met a tenant I didn't like?!
Sure you've heard all the horror stories. Tenants are a hassle. They won't pay. They beat the house up...etc.
Sure you can get a bad tenant, but I know the way to avoid them! Don't let dead beat tenants in your properties! Let the other landlords rent to them! How do you do this? Only rent to tenants who have clean credit histories, period. I always check. Because if they come in clean, they normally won't trash their credit while they are with you. I have had a few break the lease early, but they are responsible to pay until the home is leased again, so your covered.
Maintenance - Its the other big hassle you hear about. I put all rentals on Maintenance contracts. That way if something goes wrong with the AC, the tenant calls the Home Warranty Co., not me and deducts the co-pay from the next months rent as long as the receipt is with the rent payment. Also, its nice to fix an AC unit for $45 dollars.
All my best,
Mark Tait
Realty Executives
480-250-9888
http://www.marktait.com
Professional & Ethical RE Services...Now more than ever.
Mark Tait is a licensed REALTOR in Arizona. Visit him at http://www.marktait.com
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