Gilbert or Chandler—best area for investment property? (Phoenix, Mesa: short sale, power lines)

[john3232]

Which area would you recommend? It seems you get more for your money in Gilbert but Chandler is the better location. 85233, 85234 and 85295 have been recommended as the best areas to buy in Gilbert because of their proximity to the freeways. Is this true?

Chandler is great and I already own a home there which boarders Ocotillo but the house is small (1300 sq ft) and I don`t think I can afford anything much larger in that area. (My budget is around $145,000). Chandler zip 85225 and 85224 are in my price range but they don`t appear to be the nicer areas of Chandler at least with regard to local school ratings.

Any thoughts would be appreciated.

[azriverfan.]

I live in Chandler and love this area and am considering moving to Val Vista Lakes area in Gilbert.

To answer your question....neither! These areas are still inflated. I would certainly advocate people moving here however investment property is a totally different issue.

[autism360]

Chandler 85224 is closer to the 5 billion dollar Intel project and the Science and Technology Center that will be huge. I have driven by that area several times and am amazed at the growth in that area near Price and Chandler Blvd

[Captain Bill]

Chandler, on average is about $10/sf higher in price than Gilbert. Currently Gilbert average price per square foot is $86.57, and Chandler is $92.44/sf.

Being closer to the freeway provides faster commute time but may not necessarily translate into a higher price. It may rent faster.

85233, 85234 and 85295 are relatively close to the freeways.

What you should do is determine the net return you require. Then determine the average rents for the area. When you check out a property, you'll need to use a spread sheet to list the expenses, including a vacancy factor and cost of getting a property rented each year or two, and from that determine the net to see if it fits your requirements.

If you're looking for a high rate of return, south Phoenix and Laveen areas can provide 15 to17% return. That's because homes there, newer homes with tile roofs, will sell for close to $50-$60sf and still rent for around $0.75/sf.

I can buy homes from a source there with renters in place. I've checked out the areas, and it's just too far for me to buy rentals. I want them to be within a 20 minute drive from my house so I can manage them myself.

In Chandler and Gilbert you'll still get 75-85 cents rent per square foot, but pay $80-$90 sf, so the return will be lower. However, the future appreciation "should" be greater because of being in better areas.

These are trade-offs that one has to make. Do you want a high rate of return now with possibly lower appreciation, and possible area decline, or a lower rate of return in better areas.

My model is to buy for cash flow, but primarily for future appreciation. Most of the investors today are looking forward 10 years for the price appreciation.

[whodiman]

Originally Posted by Captain Bill

Chandler, on average is about $10/sf higher in price than Gilbert. Currently Gilbert average price per square foot is $86.57, and Chandler is $92.44/sf.

Being closer to the freeway provides faster commute time but may not necessarily translate into a higher price. It may rent faster.

85233, 85234 and 85295 are relatively close to the freeways.

What you should do is determine the net return you require. Then determine the average rents for the area. When you check out a property, you'll need to use a spread sheet to list the expenses, including a vacancy factor and cost of getting a property rented each year or two, and from that determine the net to see if it fits your requirements.

If you're looking for a high rate of return, south Phoenix and Laveen areas can provide 15 to17% return. That's because homes there, newer homes with tile roofs, will sell for close to $50-$60sf and still rent for around $0.75/sf.

I can buy homes from a source there with renters in place. I've checked out the areas, and it's just too far for me to buy rentals. I want them to be within a 20 minute drive from my house so I can manage them myself.

In Chandler and Gilbert you'll still get 75-85 cents rent per square foot, but pay $80-$90 sf, so the return will be lower. However, the future appreciation "should" be greater because of being in better areas.

These are trade-offs that one has to make. Do you want a high rate of return now with possibly lower appreciation, and possible area decline, or a lower rate of return in better areas.

My model is to buy for cash flow, but primarily for future appreciation. Most of the investors today are looking forward 10 years for the price appreciation.

....so you would personally lean towards the better appreciating and slightly less cash flow areas like Gilbert and Chandler over South Phoenix and Laveen right or am I misreading this?

[asufan]

Originally Posted by autism360

Chandler 85224 is closer to the 5 billion dollar Intel project and the Science and Technology Center that will be huge. I have driven by that area several times and am amazed at the growth in that area near Price and Chandler Blvd

I don't think it's going to be at Price and Chandler, I believe the $5B Intel project is at Dobson and Ocotillo roads in South Chandler.

[Captain Bill]

Originally Posted by whodiman

....so you would personally lean towards the better appreciating and slightly less cash flow areas like Gilbert and Chandler over South Phoenix and Laveen right or am I misreading this?

That's my personal opinion, and for two reasons. One is that it's too far for me to drive to take care of any small issues, and I don't know contractors in that area. The other is that I prefer the better areas, and would bet on the more desirable areas appreciating better.

However, my personal preferences may not be the best for someone else, and I wouldn't want someone to use my personal preferences as advice for them.

[john3232]

Let me ask this….

Which of the areas below is likely to see the most appreciation?

Which area is likely to be the easiest to rent?


A
1451 E Gary Dr, Chandler, AZ 85225 MLS# 4483781 - Zillow


B
332 S Golden Key Dr, Gilbert, AZ 85233 MLS# 4552896 - Zillow


C
523 N Omaha Cir, Mesa, AZ 85205 - Zillow


Thanks

[Captain Bill]

The house on Gary backs up to Ray Rd which is fairly busy and I personally don't like to have a home backed up to a major artery. In addition it has the large power lines running right behind the house. I would not buy that house because of the two negatives that will always affect the value.

Golden Keys has a better location. It's near The Islands and in a good area. It should rent ok and should hold it's on with the rest of Gilbert. This is a short sale and the status is AWC-1 which means the seller has signed a contract and it's being negotiated with the lender.

Omaha, mls # 4489131 is also by power lines. It's a tri-level that I don't particularly like. It's lender owned and they make you jump through hoops to buy the house. Looking at a couple of pics, it does need work. The carpet is missing from the slab in at least one room. This is a home I would bypass although the area of Mesa is ok.

You can search on my website CaptainBillRealty.com and have a much better search than on Zillow. Mine goes directly into the mls and the information is updated every 4 hours. You won't find homes that say Active, like Golden Keys above, only to discover that the status is not accurate.

I would suggest that you find a Realtor that can work with you to help you find a property. Using your criteria, someone can help to reduce your workload.

On my site you can search for residential rentals in any area and that will tell you what the going rent rate is in any given area.

[khuntrevor]

And always look at the soil(s) maps. Gilbert fares poorly on that, otherwise it seems like people really like it.