One of the most significant factors in Phoenix's growth is the recent search for cheaper housing by people from California and other nearby big cities, especially during the pandemic. However, there are also other reasons why people choose to relocate to Arizona’s capital.
One enticing aspect of living in Phoenix is its sunny weather, making it a perfect place to enjoy various outdoor activities. Relocating here is also a breeze since you can easily find many jobs in this area, as it is considered one of the best markets for overall employment. Phoenix is also known for its growing population, business-friendly environment, high returns on shared property investments, and fair rental rules.
Speaking of investments, there are many types of multifamily property in the US, including apartments, condominiums, mixed-use developments, student housing, age-restricted communities, and low-income households. According to the Highlights of 2023 Characteristics of New Housing report by the United States Census Bureau, there were 16,000 multifamily completed buildings in the US in 2023.
After seeing these numbers, we know that you might be thinking buying a multifamily property in Phoenix is a good idea. So besides the ones that we already listed, we’ve also included here nine more reasons why you should consider investing in a multifamily property in Phoenix.
Multifamily Properties are Inflation and Recession-Resistant
With prices spiking up these days, we know that one of the biggest reasons you might reconsider investing in multifamily property is inflation and the economic recession.
But did you know that multifamily homes often hold up well during economic downturns? The reason is simple: The demand and desire for rental properties are stable, even amid an economic slump.
With this, we can say that a multifamily property is a rock-solid foundation in the real estate market. Given the ongoing need for rental homes, many investors like you see this industry as a good way to make money and see their capital grow over time.
Provide Regular and Steady Cash Flow
Another factor that might hinder your investment in a multifamily property is its expensive costs. However, one of the main reasons you should consider putting your money into multifamily housing is the cash flow benefits. As we mentioned earlier, multifamily property is in high demand, which means a higher monthly income for you.
For example, the rental fees are relatively stable and don't change much month to month. This is especially true in a good market like Phoenix. You can re-lease units and find new renters to replace those who move out, keeping the rental rate high and the cash flow steady.
Diversify Your Income and Investment Portfolio
Having more than one renter lowers the risk for investors who own a multifamily property. If one of your renters decided to move out, it would only affect a portion of your monthly income, unlike when you have a single-family home.
Besides that, getting a multifamily property is also a good idea if you want to build an extensive portfolio of rented units. It is quicker to boost your rental business because buying one property with multiple units is more straightforward than buying several single-family homes.
Economic Scalability
It is simpler to scale your rental business when you invest in a multifamily property. For example, it is easier to manage a single multifamily property than four single-home units in different parts of the city.
More Chances for Liquidity
We know you are also worried about cash flow, although Phoenix is quite a good place for a rental business. But to give you peace of mind, a multifamily property has value even if it doesn't bring in cash right away. Its worth goes up over time as well, and more quickly than other types of properties as long as it is well-maintained.
Less Risk Compared to Other Property Investments
Due to rising property costs and a lack of available homes, more families opt to rent instead of buying a new home. You can take advantage of this by adding a multifamily property to your investment portfolio since these types of units are currently in high demand by tenants.
And this only proves that investing in a multifamily property has lower risks than other real estate investments. Actually, the vacancy rate is the only risk linked to this investment type.
You may also get cheaper mortgage rates when you apply for a multifamily property, making it a cost-efficient investment.
Passive Income Opportunities
A good multifamily property rental business will give you passive income in the form of month-to-month or quarterly rent payments. Of course, we know that having a rental property business also involves some management work. Still, with the help of a reliable and professional property management company, this significant burden can be solved.
Enjoy Tax Benefits
Investing in a multifamily property entitles you to various tax benefits, such as allowances for property depreciation and rental expense deductions.
Another new tax strategy that you may find helpful is Opportunity Zones. These zones give tax breaks to investors like you when you reuse your capital gains. Currently, Phoenix holds 42 designated Opportunity Zones in Maricopa County.
Get Help from Experts
Whether you are a new or seasoned investor, investing in a rental property is not a walk in the park. You have to learn a lot of real estate terms and gain new skills along the way. And sometimes, you have to hire an expert to handle everything you have to manage in your rental business.
It doesn't matter if it is one property or a multifamily property, overseeing your business requires a lot of your effort and time. So, hiring a dependable property management company can help you get the most out of your investment.
Boost Your Multifamily Property Profits in Phoenix by Hiring A Professional Property Manager
We know how challenging it is to manage a multifamily property business. You have to deal with your tenants, keep up with the repairs and upkeep of your property, and ensure that your business is compliant with state and federal laws– all of this while you keep track of your rental income and finances.
Fortunately, these complicated tasks and burdens will be lessened when you hire a professional property management company in Phoenix, like Real Property Management Phoenix Valley.
We have over 30 years of experience in the Phoenix area, making us one of the most trusted property management companies by investors. We are also the only one offering a Triple-Filter Manual Tenant Screening Process that sets us apart from other property management companies.
Interested to know the other services that we offer? Feel free to visit our Phoenix Multifamily Property Management page and discover how we can help your business.
