For those who aren’t familiar with Real Estate Syndications, it involves multiple investors pooling their capital together to purchase no-hassle, hands-off investment properties that deliver passive income and appreciation to the investor.
Arguably the most important factor to evaluate when selecting a real estate syndication investment is the local market of the target property. The age-old rule of thumb: location, location, location, has stood the test of time for good reason. Investors should target markets with growing populations and wage growth which leads to higher rent prices. Combine this with a business-friendly environment and you have a winning formula.
The market we will be exploring today is Phoenix, Arizona.
Market Overview
Phoenix is Arizona's capital and the fifth largest city in the United States, with more than 1.4 million residents
Arizona was ranked as the 7th best state in the US to start a business due to it’s business-friendly policies and low taxes
Phoenix is home to many of the top companies in the world and supports a diverse set of industries with Amazon, American Express, Honeywell, Chase, Bank of America and Banner Health amongst the top 10 of employers
Amazon in particular has focused on Phoenix by opening 20 facilities since 2017, which relative to population, makes Phoenix the most active market for Amazon
Phoenix also benefits from tourism with close to 47 million visitors per year thanks to an average 299 days of sunshine per year
Surrounding cities such as Scottsdale, Tempe, Mesa and Glendale are also popular destinations for residents and tourists
Key Real Estate Investment Drivers
Phoenix's population ranked as the #1 fastest growing city in the US for the 5th year in a row and is the 2nd most popular migration destination behind only Miami
Phoenix ranks #1 in the US with 26.8% organic rent growth from October 2020 to October 2021 compared to the current US National average of 12%
These rent prices are supported by the highest personal income growth in the nation at 8.4% over the last year
Many residents are forced to rent as the Median Sales Price of a single-family home in the Phoenix metro is now $434,000 and is expected to reach $532,000 by December 2022
Phoenix ranked 5th in job growth in December 2021 among all major metros
The exodus from crowded and expensive coastal cities has helped Phoenix earn the ranking as the 2nd best city to invest in real estate for 2022
As we can see from the data, Phoenix checks many of the boxes that real estate syndication investors are looking for in a local market. Finding the correct property and sponsor are still critical components of a successful no-hassle, hands-off investment, which is why our team here at Limitless Investing independently reviews every syndication opportunity through this and many other lenses prior to sharing with our investors to ensure they are only receiving high-quality, pre-vetted opportunities.
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