Top LocationsShould You Be Investing in a Scottsdale Real Estate Property in Early 2018? by Daniela Andreevska January 17, 2018February 18, 2019 by Daniela Andreevska January 17, 2018February 18, 2019At the beginning of the new year, you must be looking for a new location for your next real estate investment property. One of the beauties of investing in real estate in the US housing market is the diversity of options every real estate investor gets to choose from, including in terms of location. However, the choice of location for buying a rental property carries a large responsibility as location is one of the main determinants of return on investment in the world of real estate investing. That’s why it is so important to choose the location for your next real estate investment property carefully and only after having conducted sufficient market research and performed real estate market analysis.In order to help you make the best investment decision and to buy the best investment property in the best housing market in the US right now, we will take a look at the Scottsdale real estate market and see whether it is worth investing in or not.Related: Is Buying a Scottsdale Investment Property a Smart Choice?What Does the Scottsdale Real Estate Market Look Like in General Terms?Scottsdale is a desert city in the State of Arizona, to the east of the state capital Phoenix, with populaton of about 240,000 inhabitants. In the Scottsdale economy the per capita income ($52,220) is nearly double the average national level ($28,889), and the median household income ($73,288) is significantly above the average US level ($53,657). These figures are explained by the dominant employment sectors including healthcare, services, retail, and finance, which are all well paying economic sectors. Scottsdale is relatively safe as violent crimes are significantly less popular than in Arizona or the US as per resident. This is great news for any real estate investor looking to buy a rental property in the Scottsdale real estate market as both long-term and short-term tenants are likely to prefer such a location.The Scottsdale real estate market is medium-sized with a total number of just above 100,000 residential real estate properties. Since 2000, the total real estate appreciation in property prices in the Scottsdale real estate market has been 95%, or an average annual real estate appreciation rate of 3.9%. About 35% of the population is tenants, which means that there is significant demand for traditional rentals. The Scottsdale housing market is dominated by single family homes, followed by apartment complexes and townhomes. A third of homes have two bedrooms, and another third – three bedrooms. Two thirds of all Scottsdale residential real estate properties were built between 1970 and 1999.What Is the Return on Investment in the Scottsdale Real Estate Market?The most important factor to decide whether you as a real estate investor should buy a rental property in the Scottsdale real estate market is profitability, or the return on investment for income properties. Below we present the return on investment metrics for Scottsdale real estate investment properties as computed by Mashvisor’s investment property calculator. Our rental property calculator uses traditional and predictive analytics to produce highly accurate and reliable estimates of all major metrics of profitability in real estate investing, such as rental income, cash on cash return, cap rate, and Airbnb occupancy rate.Related: How To Perform A Real Estate Market AnalysisMedian Property Price: $614,000Traditional Monthly Rental Income: $4,120Traditional Cash on Cash Return: 5.4%Traditional Cap Rate: 5.4%Monthly Rental Income: $2,700Airbnb Cash on Cash Return: 2.5%Airbnb Cap Rate: 2.5%So, according to data from Mashvisor’s investment property calculator, affordability is an issue in the Scottsdale real estate market as the median property price exceeds $600,000. Although the monthly rental income – especially for the traditional rental strategy – is really high, it is not enough to compensate the high property price level and result in high return on investment. While traditional rentals are definitely more profitable in the Scottsdale real estate market, they are not optimal either. Return on investment of 5.4% can be considered a good cash on cash return and a good cap rate, but it is below what other US housing markets offer at the moment.Meanwhile, you should note that Mashvisor’s rental property calculator computes the same figure for cash on cash return and cap rate for both traditional rentals and Airbnb rentals because it assumes investment properties are financed through cash only.To start searching for the best investment properties in the Scottsdale real estate market, click here.What Are the Best Neighborhoods to Invest in the Scottsdale Real Estate Market?In addition to city level real estate market analysis, Mashvisor’s investment property calculator also offers neighborhood analysis, to help real estate investors choose the best location for buying a rental property and the best investment properties in the US housing market.As the data reveals, the traditional rental strategy definitely yields higher return on investment in the Scottsdale housing market than Airbnb rentals. From the three neighborhoods below, real estate investors are most advised to buy a Scottsdale investment property in South Scottsdale. This neighborhood offers the most affordable property price level, which is the main reason why it yields the highest return on investment for traditional rentals in terms of cash on cash return and cap rate. Actually, return on investment of 6.7% is good in the current rental market, characterized by an ever increasing number of real estate investors, landlords, and rental properties. The traditional cash on cash return and traditional cap rate in Pinnacle Peak are also good. After all, a real estate investor should keep in mind that these numbers are only averages, which means that the return on investment metrics for a particular investment property are likely to be higher.Related: Arizona Legalizes Airbnb Investment PropertiesNorth ScottsdaleMedian Property Price: $598,000Traditional Monthly Rental Income: $3,680Traditional Cash on Cash Return: 4.5%Traditional Cap Rate: 4.5%Monthly Rental Income: $2,800Airbnb Cash on Cash Return: 4.5%Airbnb Cap Rate: 4.5%Airbnb Occupancy Rate: 34.8%South ScottsdaleMedian Property Price: $425,000Traditional Monthly Rental Income: $3,410Traditional Cash on Cash Return: 6.7%Traditional Cap Rate: 6.7%Monthly Rental Income: $1,850Airbnb Cash on Cash Return: 2.5%Airbnb Cap Rate: 2.5%Airbnb Occupancy Rate: 39.4%Pinnacle PeakMedian Property Price: $825,000Traditional Monthly Rental Income: $5,550Traditional Cash on Cash Return: 5.6%Traditional Cap Rate: 5.6%Monthly Rental Income: $3,350Airbnb Cash on Cash Return: 2.6%Airbnb Cap Rate: 2.6%Airbnb Occupancy Rate: %In conclusion, while the Scottsdale real estate market might not be the top location for investing in rental properties in the US housing market at the moment, it is still worth some consideration by real estate investors, especially those interested in traditional rentals. After all, with the best real estate investing tools, such as Mashvisor’s investment property finder and investment property calculator, real estate investors are well equipped to find and buy the best real estate investment properties in any housing market. Start Your Investment Property Search! START FREE TRIAL AirbnbInvestment CalculatorMarket AnalysisReturn on InvestmentScottsdale AZTraditional 0FacebookTwitterGoogle +PinterestLinkedin Daniela AndreevskaDaniela is Marketing Director at Mashvisor. She has been writing about real estate investing for a number of years. Previously, she worked in economic policy research and fundraising. Daniela holds a Master degree in Middle East and Mediterranean Studies from King’s College London. Previous Post Real Estate Investment Calculator: An Expensive Luxury or an Absolute Must for Investors? Next Post How Do You Find the Best Rental Property Loans? 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