Arizona is one of the fastest-growing states in the US and the place where entrepreneurial minds thrive, according to the Arizona Commerce Authority. From large retailers to small real estate investors, Scottsdale is drawing millions of dollars in investments. The city is also the cradle of many forward-thinking start-ups. So, is the Valley of the Sun the new Silicon Valley? Well, not really, maybe just its little sister.
Real estate agents in Scottsdale expect the city to expand even more in the next years due to the favorable job market, excellent schools, and low taxes. While the cost of living in the San Jose Tech Hub is unbearably high, Scottsdale remains affordable. House prices in Scottsdale have increased by 3.6% over the last year. However, there is room for growth. As for rent prices, they are about 50% higher than in Phoenix. So, let’s take a look at the types of properties that real estate investors buy like hotcakes.
It’s enough to visit this city once in your lifetime to fall in love with it. That’s why many retirees decide to move here for their sunset of life. So, real estate investors tap into the city’s high demand for senior care services, expecting to charge, on average, anywhere between $3000 and $3,500 per month, depending on the facilities provided as well as on the degree of independence their residents still possess.
The easiest way to enter the business of assisted living is by purchasing an existing business that is already licensed. The second option would be to buy a house and make the necessary improvements and then work with a property management company to find a long-term tenant willing to complete the investment. In the third place, real estate investors can convert an existing property into a residential care home or nursing home. Unless all the beds are occupied, these homes may not be profitable.
The big problem with multi-family homes in Scottsdale is that they sell fast. There are very few on the market, which means that investors must constantly keep an eye on the MLS listings or keep in touch with a real estate agent in Scottsdale listed on RealEstateAgent.com .
If they are lucky, they can find a property priced exactly at the upper limit for a conforming loan, which in 2019 is $484,350. If not, a jumbo loan is the only option left. And securing a loan with an LLC isn’t easier, either.
In certain areas, single-family houses may be converted into multi-family dwellings by building two or three units above, paying attention to the height limit imposed by the zoning guidelines. Vacation rentals are also in high demand. Millions of tourists come to the city every year, and according to a report from the city of Scottsdale, 1.4 million choose to stay overnight in other accommodation facilities than hotels. And because many visitors appreciate art and design, hosts can charge extra dollars if they have an outstanding interior design.
Globally, there was an 11% increase in the luxury home market in 2018, according to the Luxury Defined 2018 report by Christie’s. High-net-worth-individuals and ultra-high-net-worth-individuals are the main clients for homes with state-of-the-art amenities. The Scottsdale Airpark is for sure a hive full of high-earners, but snowbirds are also among the luxury home buyers. Those looking for an experience rather than a house will find their dreams come true here in Scottsdale, especially in the northern gated communities. Custom-built homes are also aplenty, while those who prefer to invest in vacant land and build from scratch can easily find new home builders in Scottsdale, as well.
These three types of properties seem to be very safe vaults, and local authorities do their best to protect the values of the homes in each neighborhood. Whether you are a rookie real estate investor or a seasoned one, Scottsdale will not let you down.