The Phoenix metro is one of the best areas in the U.S. to invest in rental property, a new report shows.
The study conducted by Stessa identified the best areas to buy rental property by creating a composite index based on five factors real estate investors consider when looking at a market. The factors include gross rent multiplier, year-over-year home price growth, forecasted home price growth, effective property tax rates and population growth. The metropolitan areas were then divided into three categories based on population: small, midsize and large.
The Phoenix metro ranked eighth in the large metro area category, with a composite index score of 57.45.
The Valley's median home price increased by 32.2.% and is now $410,028, and home prices in the metroplex are expected to increase by 23.8%. The median monthly rent in the city is $1,572.
The Phoenix metro has a 21.7 gross rent multiplier and had a 2.1% increase in population from 2019 to 2020.