Real estate is a thriving sector in Arizona because of its associated benefits, such as cash flow, quality returns, and tax deduction; it is an excellent investment to create generational wealth.
Nowadays, real estate investment in Arizona is beyond retirement projects, and there is a wide range of properties from which you can choose. Despite the natural disasters in Arizona, real estate still tops the chart as one of the best investments in Arizona. Therefore, to maximize real estate in the area, it is necessary to focus on the inventory and benefit from it.
Now the question on your mind is how? And why? Do not worry any further; this article comprehensively explains how and why you need to take advantage of the inventory in Arizona real estate.
Without further ado, let’s get started!
Top 5 Reasons You Should Take Advantage of Inventory in Arizona Real Estate
1. Rent, Mortgage, and Finance Rates
There is no better time to invest in real estate than now. According to Bankrate.com, current rates in Arizona as and when writing this article are 4.89% for a 15-year fixed, 5.70% for a 30-year fixed, and 4.75% for a 5/1 Adjustable-Rate Mortgage (ARM). This means that the rates keep increasing and do not look like they are slowing down soon.
Increased mortgage and rent rates spell more profits; hence you should start early, and now is the best time to take advantage of the inventory.
2. Helps Combat Inflation
The best thing to do with your money is to invest it in a rising-rate investment; thankfully, real estate investment is one of the safest inflation-tackling assets. Hence, asides from being a thriving market, the real estate market also helps to save your money from inflation.
Interestingly, experts have predicted booming inflation for the rest of the year, stretching into 2023; this is the best time to invest your money in Arizona real estate and benefit from the inventory.
Naturally, real estate has an inflation hedging ability resulting from the relationship between demand for real estate and GDP growth. As the economy expands, rent demands scale larger, improving capital values.
3. The Inventory In Arizona Real Estate Provides Tax Advantages
Real estate investments in Arizona come with tax benefits. Several expenses are attached to owning a property, like mortgage interest, management fees, property insurance, maintenance and repair costs, property taxes, and money used to generate ads. However, the sale of your property in Arizona does not precisely attract heavy taxes.
This is how it works: if you sell your property at a higher rate than you bought it, only your capital nor your profit will be taxed as income. Instead, your profit will be taxed as capital gains; the capital gains rate is lower than income tax.
4. Multiple Investment Options
With real estate investments, you have various options, depending on your level of commitment. For example, Arizona has the sixth largest population in the U.S.; you can leverage that by providing shelter with real estate.
You can decide to become a homeowner, buy a house, begin your real estate investment from them, and thrive on appreciation. You can also buy a house to fix and renovate, then rent it out to others.
You can also begin by investing in REIT (a Real Estate Investment Trust that usually owns and manages many investments, like hotels, resorts, shopping malls, etc.) or leasing out and mortgaging property.
5. Allows You to Build Wealth and Equity.
Equity refers to the portion of your property you have outright ownership to, outside the part the bank or other financial institutions own. With real estate, you can build wealth and equity as your equity increases when you invest in land and landed properties.
When you pay off your loans, you build more property equity. Though this might be a problem if the market takes a downturn, your equity will increase if you hold on to the property until the demand soars. And when you build equity, you get more money to buy more properties.
Which Cities in Arizona Are Perfect for Investment Real Estate?
- Phoenix: The Phoenix is expanding, making it an excellent option for real estate investments. Therefore, now is a perfect time for you to invest in real estate in that city before it becomes more expensive once the market is excessively saturated. Furthermore, Phoenix has a diverse job market, great weather, and a general ambiance that supports youth, recently married couples, and growing families. Therefore, you can leverage the market opportunity. In addition, Cave Creek, Scottsdale, New River, and Carefree neighbors have soaring property values.
- Paradise Valley: This city has been leading the nation in appreciation rates. You can also leverage this opportunity. You will find several developing areas you can invest in, neighborhoods like Clearwater Hills, Finisterre, and Camelback Country Club Estates.
- Scottsdale: This area also tops the chart as one of the best real estate markets as it has been growing consistently for so long and is yet to crash. So you can start your investment journey in this market.
- Tucson: This is a great place to buy properties, though it is a small area. Many people are willing to pay a fortune to live in that area, particularly because of its locality, favorable climate, and availability of amenities.
Other areas you can invest in real estate in Arizona include Tempe, Prescott, etc.
Real estate is one of the safest investments you can put money into, and at the moment, the market is buoyant in Arizona. Undoubtedly, this is the time for you to take advantage of the inventory in real estate and be proud you did.
Hopefully, you now understand why you should invest, the various ways to invest, and the best Arizona cities for your real estate investments. However, should you have any further questions or inquiries, feel free to contact me!