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Arizona attracted almost 109,000 new residents in 2021 with the state’s universities, tourist attractions, and natural beauty. Growth in popular industries, a 4.1% unemployment rate, and 401,100 new jobs since 2015 make the state an even more lucrative opportunity for real estate investors.
Even with so much potential, it can be difficult to identify the best markets to buy real estate in Arizona—especially for out of state investors. If you want to buy rental property in Arizona, you'll need to know which markets offer the best apartment investment opportunities.
To help you get started, we evaluated the state’s most populous cities based on factors like affordability, rental rates, and investment potential.
Interested in one of the investment markets on our list? Our friends at Clever Real Estate can help.
Clever is a free, no-obligation agent matching service that will introduce you to qualified, pre-vetted realtors from trusted brokerages including Keller Williams, RE/MAX, and Coldwell Banker. You can meet as many agents as you like until you find the best one to advise you on your real estate investment journey.
Best of all, Clever can help you get up to 0.5% cash back after closing — just for finding your agent through their free service. In Arizona, where the median price for a single-family home is $424,544, that's around $2,100 back in your pocket!
1. The Best Place to Buy Rental Property in Arizona: Phoenix
With a population of over 1.7 million and growing, Phoenix is also a hotspot for IT companies, manufacturing companies, and enough job growth to be called the “Wall Street of the West.” In fact, Arizona’s capital has posted almost 90% employment growth in transportation, warehousing, and utility jobs over the past 10 years.
With this increase comes a higher demand for housing, including rentals. Potential renters are also attracted to Phoenix by the city’s several colleges, cultural and entertainment attractions, and proximity to a number of other popular destinations in the Valley. The city’s millions of annual tourists make Phoenix an excellent option for short term rentals as well.
Because of these attractions, median home prices exceeded $410,000 in March 2022 (up from $180,000 in March 2015) with projected growth close to 30% year over year. These numbers translate into a median rental price of $1,640 for a two-bedroom apartment. And, while rental prices may not be the highest in the state, the median cost of purchasing a rental property is lower than in most of our top picks, making the initial investment more accessible.
Tucson boasts the most affordable rental rates of any other city on our list—$1,334 per month—but real estate investors can still take advantage of more affordable home prices. The median sale price for a home in Tucson was $311,868 in March 2022, and home values are expected to grow by around 24% each year. In fact, real estate values have almost doubled since 2015. So savvy investors can collect healthy rental income while also growing the value of their real estate portfolio over time.
What’s more, the average daily rate for Tucson Airbnbs is $97, with monthly rental income reaching almost $2,700 in 2020. Occupancy rates soared to 62% and cap rates averaged 4.8%—among the highest in the state. Short- and long-term renters alike are drawn to Tucson by the area’s galleries, Saguaro National Park, and even its designation as a UNESCO City of Gastronomy.
Mesa is the third largest city in Arizona and the most populous city in the East Valley. Median home prices are higher than the top two cities on our list, but monthly rental prices reach almost $1,500 for two-bedroom apartments, and the city’s population has by grown around 24% since 2010. So while it may cost more to purchase property in the city (around $420,000), investors can count on low vacancy rates and consistent rental income each month. Real estate values are also expected to increase more than 27% year over year and have increased from around $189,000 since March 2015.
The number of homes for sale in Mesa also increased by almost 8% from February to March 2022, which may make it easier to secure an investment property in the area. The city is close to Phoenix and Chandler—and offers numerous outdoor amenities, including golf courses, parks, and museums. These features make Mesa an excellent option for those who want to invest in the Valley of the Sun.
Chandler is a smaller city within Arizona’s East Valley, located around 20 miles southeast of Phoenix. The city attracts visitors with numerous championship golf courses, parks and trails, and a vibrant downtown center with a wide variety of bars, restaurants, and public art displays.
Population growth in Chandler hasn’t accelerated as quickly as other top cities on our lists, but median home values and rental prices are still high. In March 2022, the median home sold for over $520,000—more than twice the $252,000 median value in March 2015.
Young professionals who prefer a suburban feel and want access to highly rated schools are often attracted to Chandler because of its proximity to Phoenix. That said, the city’s walkable downtown, wide selection of bars and restaurants, and more than 60 beautiful public parks help Chandler stand out on its own.
Located on the outskirts of Phoenix, Scottsdale is known for its vibrant nightlife, highly-rated schools, and thriving tourism industry. Its natural beauty and mountain vistas attract residents and visitors alike. And the city is known as one of the finest golf destinations in the world, with more than 200 courses including TPC Scottsdale.
Because the area is so desirable, rents are higher than in many areas of Arizona—with a median of $2,152 per month for a two-bedroom apartment. Median home prices are also high (over $820,000), which makes it more difficult to find affordable rental property in the area. That said, values are expected to increase by 30% year over year, so buying in Scottsdale may be a smart investment in the long run. In fact, home prices have risen from about $415,000 in 2015.
Next Steps for Your Rental Property Investment
From Phoenix's fast-growing tech scene to Scottsdale's soaring home values, Arizona offers a wealth of real estate investment opportunities.
The best ally on your real estate investment journey is a great local real estate agent. With an agent at your side, you'll be able to identify the best rental property opportunities, make smarter decisions about up-and-coming markets, and even spot with properties before they hit the MLS. Our friends at Clever Real Estate have built a network of trusted partner agents in Arizona and beyond. It's free to meet agents through Clever, with zero obligation!
Best of all, real estate investors who find an agent through Clever can easily take advantage of Arizona's buyer rebate opportunities. You can receive up to 0.5% cash back at closing, which you can use to offset closing costs, get your new property ready for renters, or simply enjoy as extra money in your pocket.
Is Arizona good for investment property?
With a booming economy and one of the fastest-growing populations in the U.S., Arizona is a great place to invest in real estate. It offers several markets to invest in rental property, with home values rising rapidly each year. Learn more about the best places to buy rental property in Arizona.
How do I find rental property to buy in Arizona?
Once you find the right market to invest in, we recommend working with a real estate agent to help find rental property that will meet your goals. A realtor can provide insight into the market and give you crucial advice about where to buy your next rental investment. Learn which Arizona rental markets are hottest and how to save thousands.
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