Investor commentary
Phoenix's near-term rent growth has flattened, but the long-term thesis remains intact. Underwrite to 2024 rents, not 2022 peaks.
How to interpret Phoenix's rental yield
A 5.8% rental yield in Phoenix compares favorably to coastal gateway markets (typically 4–5%) and signals an appreciation-tilted market where cash flow requires careful operations. Always underwrite with the property's actual taxes and insurance — neither tracks national averages perfectly.
Recommended underwriting adjustments
- Reset property taxes to your purchase price, not the seller's basis.
- Add 7% vacancy as baseline; stress to 10% in worst case.
- Budget 8–10% management plus 8% maintenance + capex reserves.
- Verify insurance quotes from at least two carriers before closing.