Warm temperatures year-round, stunning desert sunsets, frequent sporting events, ample shopping, and lively nightlife. With all of this to offer, the Phoenix area has become a huge draw for people looking to escape cold winter weather from across North America.
Every year, 22 million people flock south to Arizona’s capital city to enjoy the sunny climate – many of which have made Phoenix and its surrounding cities a second home.
As a result, we’ve seen the Phoenix area become one of the foremost markets in the vacation rental industry.
To gain a better understanding of why short-term rentals perform so well there, we analyzed data from thousands of listings and compiled our Vacation Rental Performance Report for Phoenix, Scottsdale, Tempe, and Mesa. This report will give you insight into the average rental income, occupancy rates, booking windows, and vacation rental inventory in the area.
Some of the key factors we’ve identified that are contributing to the area’s immense success are:
- Annual winter migration
- Affordable cost of real estate
- Huge demand for private accommodations
- Long duration of stays and guests who return year after year
Why Phoenix is a great place to invest in a vacation rental
Not only is real estate is relatively affordable in the Phoenix area, with the median home value at $249,300, but vacation homes are incredibly popular with travelers.
Many visitors heading to Arizona every year are retirees from the Northern United States and Canada who stay for weeks at a time. They like to travel to the same area and often book the same property year after year. Short-term rentals are the ideal option for them because they provide the comforts of home and are more affordable than hotels for long-term stays.
The demand is so great that vacation rental owners in Phoenix and surrounding cities, such as Mesa, Tempe, and Scottsdale, have no trouble getting bookings throughout the peak season, which spans January through March.
And with long-term guests who stay for an average of 8.4 days per trip, there are fewer turnovers as well as less wear and tear on the property. That lowers maintenance costs and ensures the property remains in tip-top shape for future guests and the owners themselves.
How much owners are earning with Phoenix area vacation rentals
Two-bedroom properties, which make up the majority of the vacation rental inventory, generate $12,200 per year when they perform at the 50th percentile of the market. At the 75th percentile, they generate $17,400.
Comparatively, a five-bedroom property that performs at the median generates $58,000 per year, while a five-bedroom at the 75th percentile brings in $86,600.
The discrepancy between a property performing at the median and one performing in the 75th percentile isn’t just a matter of amenities (although pools are a must for success in the Phoenix market). It often comes down to how the property is managed.
Download our free report to see rental income by property size and performance.
The key to success with a vacation rental in Phoenix? Professionalism
As the demand for vacation rentals has risen, inventory has grown to meet it. And unfortunately for longstanding homeowners in the area, so has the competition.
Owners who once found it easy to fill their calendars now are seeing their performance drop off. They’re not at the top of the search results on sites like VRBO anymore because they’re getting outperformed by the competition
Through our research, we found that vacation rental owners who perform at the top of the market are the ones taking a professional approach to managing their homes.
Owners seeing the most success in the Phoenix area are:
- Maximizing their income during the high season
- Generating additional revenue during the low season
These owners are making strategic upgrades to the way they do business, such as using dynamic pricing tools. Dynamic pricing allows you to raise rates to reflect demand for special events and drop them during the dead of summer to attract travelers at times outside of their normal peak season.
This extra effort is what really sets owners head and shoulders above the competition in the Phoenix area.
Download our full report for additional details
With consistent demand and strong returns, the Phoenix area is proving to be one of the hottest markets for vacation rental owners.
Are you thinking about buying a vacation rental in this area? Already own a second home in Phoenix and want to outperform the competition?
Download our free 2018 Vacation Rental Performance Report for Phoenix, Scottsdale, Tempe, and Mesa to find out about:
- Rental income potential by property size
- Average occupancy by property size
- Average daily rate by property size
- Average days booked in advance
- Average length of stay
- Vacation rental inventory by property size
- Occupancy rate by month
The Phoenix Area
Vacation Rental Performance Report
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Want to earn more from your second home without all the hassle? Evolve has helped more than 5,000 owners throughout North America earn over $200 million in rental income. Click here to learn how.