I am sure most of us have dropped $20,000 – $30,000 on a new vehicle at some point in our lives.  What would you say if I told you that you could purchase an Arizona investment property for that same price?  It’s true!  The market for condominiums in the Phoenix metro area has taken a huge hit over the past few years.  There are condos on the market right now that investors are picking up for under $30,000.  I was actually out looking at some of these condos last week  There was one condo in north Phoenix (nice area of town) listed for $28,900 (originally sold in September 2007 for $176,000).  Even though properties are dirt cheap right now, it is still important to look at several factors to make sure it is would be a good investment.  Let’s use this condo as an example.

Arizona investment property as cheap as buying a vehicle

Phoenix Condo

List Price – $28,900

Potential Rehab Cost – $5,000 (all cosmetic work – paint, carpet, etc.)

Total Initial Outlay – $34,900

Monthly Rent – $650

Monthly Expense  – $275 (HOA, taxes, insurance)

Monthly Net Cash Flow – $375 ($4,500 annually)

Based on the above figures, the cash on cash return for this condo would be just under 13%.  That is not even accounting for any potential appreciation once you sell the property.  From a return standpoint, this investment is solid.  A few of the other factors to research include financial strength of homeowners association, how many of the units are currently in foreclosure, and if the project is approved by HUD (could impact ability for homeowners to obtain future financing).

Instead of putting your money towards a depreciating asset, like a vehicle, why not build a portfolio of income producing assets.  Learn more about how investors are creating wealth through Arizona investment property.