The Scottsdale housing market is often hailed as a great place for buying a rental property. Even so, you can make a lot of wrong moves in the local rental market if you aren’t guiding your investment decisions with data and real estate analysis. Here are the key numbers you’ll want to know before you invest in Scottsdale real estate.
Median Property Price
The first number that you need to know before you even consider buying property in Scottsdale is the median property price. Knowing the median or average home prices in Scottsdale, AZ will give you an idea of whether or not you can afford to buy an investment property in the city right now. According to Mashvisor’s Scottsdale real estate market data, here’s what to expect:
- Median Property Price: $934,812
- Price per Square Foot: $326
Let’s put that number into perspective. The national median property price is currently $330,000 – it’s quite clear that Scottsdale properties are expensive.
So now that you have data on Scottsdale home prices, what do you do with it? Well, you have a few options:
- Move on and search for more affordable real estate markets. If you’re keen on investing in the Arizona real estate market, you have other, more affordable options. Check out the Tempe real estate market.
- Start saving up more money from now and looking into ways to invest in real estate with little money down.
- Learn how to find profitable yet cheap houses for sale in Scottsdale.
Think the last option may be impossible? Check out these affordable Scottsdale investment properties for sale found by Mashvisor’s Rental Property Finder. We set the budget filter to $50k-$150k and were quickly presented with a few high return properties in the Scottsdale real estate market that are quite affordable:
Price to Rent Ratio
The price to rent ratio is a metric that measures how affordable it is for local residents of a real estate market to buy a home compared to living in a rental property. Mashvisor reports that the price to rent ratio for the Scottsdale real estate market is currently 21.
What does this mean?
A Price to Rent Ratio of 15 and Below: Residents find it more affordable to buy their own home than pay rent.
A Price to Rent Ratio Between 16-20: Some residents find it more affordable to live in a rental property than to buy a home.
A Price to Rent Ratio of 21 and Above: Residents find it much more affordable to rent out a property.
Essentially, the average resident finds it more affordable to live in a Scottsdale rental property. What does this mean for real estate investors? If you can afford to invest in Scottsdale real estate, you may enjoy high demand for your long term rental property.
Traditional Rental Income
How much money can you earn on a monthly basis with a traditional rental property? Actually, Scottsdale was named one of the best cities for rental income in 2020. That’s because you can earn around $3,652, according to Mashvisor’s rental data.
Traditional Cash on Cash Return
Of course, you cannot rush into buying a Scottsdale investment property based on how much rental income you may earn. You should look at the cash on cash return as well. Mashvisor estimates that Scottsdale real estate investors generate a cash on cash return of 2.5% from a long term rental.
Keep in mind that it’s important to run a cash on cash return analysis on individual Scottsdale rental properties for sale. That way, you can factor in your personal financing costs. Use Mashvisor’s Rental Property Calculator to calculate cash on cash return quickly.
Average Airbnb Daily Rate
Airbnb is legal in the Scottsdale real estate market. So if you’re interested in buying an Airbnb property, you need all the Airbnb data you can get. Let’s first look at the average Airbnb daily rate. Mashvisor’s Airbnb rental data shows that local hosts earn $288 on average.
Airbnb Rental Income
With such a high average Airbnb daily rate, it’s no surprise that hosts in the Scottsdale real estate market earn a high monthly rental income of $3,504. If you are able to manage your Airbnb costs and fees, this high rental income could easily lead to positive cash flow.
Airbnb Cash on Cash Return
But what kind of Airbnb return on investment can you get in Scottsdale? Mashvisor’s data reveals that the Airbnb cash on cash return for the market is 2.4%.
This is only slightly lower than the returns you can achieve with a traditional rental property in the Scottsdale real estate market 2020. So if you’re undecided on which approach to take when it comes to Scottsdale real estate investing, it’s best to continue looking at the traditional vs Airbnb investment data when conducting investment property analysis on homes for sale. Mashvisor’s Rental Property Calculator will actually run all of the numbers for both the traditional and Airbnb rental strategy for you. That way, you can compare the investment potential of each rental strategy for the same rental property and quickly come to a profitable conclusion.
Airbnb Occupancy Rate
How often will your Airbnb Scottsdale rental property be occupied in 2020? Airbnb hosts enjoy a good Airbnb occupancy rate of 58% on average. Although that might seem low to you, remember that Airbnbs are not occupied 100% of the time – this is just the nature of these rental properties. Guests come and go. At the same time, the average Airbnb daily rate is high enough so there is a balance between occupancy rate and rental rate. So even with a 58% Airbnb occupancy rate, you can still make good money with Scottsdale short term rental properties.
Tenants are usually attracted to areas where they will be able to move around and commute easily. While public transportation matters as well, it’s key to look at the Walk Score of a city to begin to understand what you will be offering to tenants. The Walk Score for the Scottsdale real estate market is 34.
What does this mean? According to Redfin, a Walk Score of 34 means the city is car-dependent. Tenants will most likely need cars to get around. This means that when conducting a Scottsdale real estate market analysis, you should also check other scores like the transit score and the bike score.
Keep in mind that you shouldn’t write off the Scottsdale AZ real estate market completely for having a low Walk Score. It’s simply a part of the picture that you should have when trying to decide where to buy investment property.
Days on Market
The days on market (DOM) is representative of how long homes for sale remain on the market without being sold. Based on the Scottsdale homes for sale in Mashvisor’s vast real estate database, the days on market is 120. It seems homes remain on the market for some time and it indicates that demand is not too intense in the market. This environment resembles a buyer’s market, but not completely. According to Redfin, the Scottsdale real estate market is somewhat competitive (a Compete Score of 62). The real estate brokerage reports that some Scottsdale homes for sale get multiple offers. At the same time, the company’s market data shows that many sell for 2% below list price.
The final piece of data you will need for the Scottsdale real estate market is neighborhood data. This kind of data is needed for a neighborhood analysis and will help you discover what the best neighborhoods in Scottsdale are for real estate investing.
One of the reasons many investors turn to Mashvisor during their Scottsdale property search is that we collect all of the neighborhood data for you. We quickly found the top 2 Scottsdale neighborhoods:
#1. South Scottsdale
- Median Property Price: $612,862
- Price per Square Foot: $315
- Price to Rent Ratio: 19
- Traditional Rental Income: $2,653
- Traditional Cash on Cash Return: 2.4%
- Average Airbnb Daily Rate: $334
- Airbnb Rental Income: $3,795
- Airbnb Cash on Cash Return: 3.6%
- Airbnb Occupancy Rate: 65%
#2. North Scottsdale
- Median Property Price: $857,016
- Price per Square Foot: $310
- Price to Rent Ratio: 22
- Traditional Rental Income: $3,194
- Traditional Cash on Cash Return: 2.3%
- Average Airbnb Daily Rate: $178
- Airbnb Rental Income: $3,301
- Airbnb Cash on Cash Return: 1.7%
- Airbnb Occupancy Rate: 52%
Start your search for a Scottsdale income property for sale right now and get all the market and property data you need to make a wise choice.
Start Searching for High Return Properties in the Scottsdale Real Estate Market
With all of this data on the real estate market in Scottsdale, you should be able to confidently start your search for investment property. Just remember that you need even more property data when trying to choose a Scottsdale real estate investment. Mashvisor can provide it all. Get the data and analysis we offer by signing up for a 7-day free trial now.