It may only be September at the moment, but before we know it, the new year will be knocking on our doors. In the face of a new year, real estate investors will be searching for positive cash flow real estate investment opportunities. Many state markets, such as the Arizona real estate market, are home to many profitable cities. The topic of this blog, the Scottsdale real estate market, is one such market. Should you invest in the Scottsdale real estate market? Keep reading to find out!
Scottsdale Real Estate Market: City-Level Data
Before we discuss the Scottsdale real estate trends and reasons to invest in Scottsdale real estate next year, we need to review Scottsdale’s rental market performance. We can do so with Mashvisor’s investment property calculator. With Mashvisor’s calculator, you can analyze the Scottsdale housing market and all the properties in it. To learn more about how Mashvisor’s calculator does this, click here! In the meantime, here is the data on the Scottsdale real estate market.
Pricing
- Median Property Price: $874,800
- Price per Square Foot: $299
- Price-to-Rent Ratio: 24
Traditional Investing
- Rental Income: $3,045
- Cap Rate / Cash on Cash Return: 1.9%
Airbnb Investing
- Rental Income: $2,576
- Cap Rate / Cash on Cash Return: 1.3%
- Occupancy Rate: 49.9%
5 Reasons to Invest in the Scottsdale Real Estate Market
There are five Scottsdale real estate market conditions that should attract buyers and investors to the housing market. After reviewing the city’s data, we can use this information to provide support for each reason.
1. Scottsdale investment properties are very profitable
The prime goal of all rental properties is to generate rental income and a good return on investment (ROI). In other words, investment properties are meant to be lucrative. The Scottsdale real estate market follows this essential principle to a tee. According to Mashvisor’s previously mentioned real estate data, Scottsdale investment properties are extremely profitable. The city’s traditional rental income and ROI averages are $3,045 and 1.9%, respectively. Airbnb Scottsdale’s rental income and ROI averages are $2,576 and 1.3%. Keep in mind that these are merely averages. With the right real estate investment tools, an investor can easily find a Scottsdale rental property that will be more profitable in these metrics.
The profitability of the Scottsdale real estate market trumps the state’s profitability as well. According to Mashvisor, the state’s traditional averages are $1,666 and 1.6%. Its Airbnb averages are $2,372 and 2.8%.
2. The Scottsdale real estate market has a high appreciation rate
The Scottsdale real estate market will carry the city’s reputation of having a high property appreciation rate. According to NeighborhoodScout, Scottsdale has been in the top 20 percent nationally for real estate appreciation. During the last 12 months, Scottsdale had an appreciation rate of 7.85%. This rate was higher than those of approximately 82 percent of cities and towns in the nation. Scottsdale’s estimated 2019 real estate appreciation rate is 5.56%, which is also among the nation’s highest rates. It is expected that the Scottsdale housing market will maintain these high rates.
3. Demand for traditional Scottsdale investment properties is high
The traditional Scottsdale real estate market forecast, in particular, is very bright. There are many factors that bolster the demand for traditional rental properties in the city. The city’s economy is experiencing great growth. Over the last year, the local job market increased by 3.3%, compared to the US average of 1.6%. Future job growth over the next ten years is 51.2%, which is much higher than the US average of 33.5%.
Scottsdale has also earned a few titles that contribute to the high demand for traditional rentals. For example, Scottsdale is the best city to retire in America. It is also one of the best cities to live and raise a family.
Unfortunately for buyers, Scottsdale is a hot seller’s market (according to Zillow) thanks to this high demand. Buying a rental property in Scottsdale is still possible, but more difficult. It is, however, expected that there will be some cool down in the Scottsdale rental market
4. Scottsdale Airbnb regulations are clear
Is Airbnb legal in Scottsdale? Fortunately, the answer is yes! According to Scottsdale law, a short-term rental is a dwelling unit rented for less than 30 days to transient guests. Only non-owner occupied rentals may be used for Airbnb Scottsdale; partial units or rooms cannot be rented independently. There are various, helpful legislations Airbnb Scottsdale hosts must abide by. Scottsdale short-term rentals must be registered through the Maricopa County Accessor’s Office. There is a maximum occupancy of 6 adults. If you’re investing in Airbnb Scottsdale, you must also pay a few taxes. These include a State Transaction Privilege Sales Tax (5.6%), a City Transaction Privilege Sales Tax (1.75%), and a City Transient Tax (5%). For more on the short-term rental regulations in Scottsdale, visit the Scottsdale government website.
Related: The Best Scottsdale Properties for Investment: Airbnb or Long Term Rentals?
5. Airbnb Scottsdale is in demand and lucrative
Scottsdale housing market predictions for Airbnb are overwhelmingly positive. One reason is due to its profitability, as previously mentioned. Another reason is the city’s impressive tourism industry. Over 4.5 million overnight tourists visited Scottsdale in 2017. These tourists generated a whopping $2.4 billion for Scottsdale’s economy. As a tourism-rich city, Scottsdale will likely surpass these statistics.
Take advantage of these predictions and find a profitable Airbnb investment property in Scottsdale now.
The Best Scottsdale Neighborhoods to Invest In
So, you now know that you should invest in Scottsdale real estate. But where exactly should real estate investors focus on buying rental property in Scottsdale? According to Mashvisor, the best Scottsdale neighborhoods are North Scottsdale and South Scottsdale.
North Scottsdale
Pricing
- Median Property Price: $836,449
- Price per Square Foot: $286
- Price-to-Rent Ratio: 26
Traditional Investing
- Rental Income: $2,677
- Cap Rate / Cash on Cash Return: 3.3%
Airbnb Investing
- Rental Income: $3,359
- Cap Rate / Cash on Cash Return: 3.5%
- Occupancy Rate: 46.6%
South Scottsdale
Pricing
- Median Property Price: $556,854
- Price per Square Foot: $286
- Price-to-Rent Ratio: 22
Traditional Investing
- Rental Income: $2,069
- Cap Rate / Cash on Cash Return: 2.0%
Airbnb Investing
- Rental Income: $2,854
- Cap Rate / Cash on Cash Return: 2.8%
- Occupancy Rate: 66.8%
All in all, the Scottsdale real estate market is expected to be a top market. With the real estate market trends mentioned in this blog, there are plenty of reasons investors should invest in Scottsdale. To learn about where to buy investment property in the city and analyze Scottsdale homes for sale, click here to start your FREE 7-day trial with Mashvisor!
Related: Mashvisor: The Only Real Estate Database You Need