Investing in Phoenix - Knowing What's Going On In the Rental Market There

By Tanya Chu

As an investor, we must understand what happens with the real estate market when it crashes to protect ourselves from potential losses.

In Phoenix, as well as in many other US cities, when the home prices fell, so did rents. Right now, landlords are competiting for tenants and have lowered their standards (i.e. not collecting security deposits and not conducting credit checks) and rental price just so that their house doesn't sit empty. In fact, some landlords are even paying for renters' utlities, giving away ipods or flatscreen tv's, or offering a few month's worth of free rent! Tenants now have the power of choice and the ball is in their court - not a good situation for investors.

So, a word of caution, if you're investing in cities such as Phoenix, where prices are down 50% since the peak, or other cities suffering from a similar fate, be wary of where you invest. Make sure that you're picking a good neighbourhood to avoid problem renters.

For more readings on this topic, check out this article in Arizona Republic: Valley landlords face new reality.