When consulting with investors who already own multiple rental properties, I often encounter those looking to turn their attention to Phoenix. After managing two or three properties in other states and becoming weary of property taxes and rental regulations, they are seeking to expand their portfolios in Arizona, where regulations are relatively relaxed.

The average rent in Phoenix is approximately $1,679 per month as of August 2026 (according to Zumper). This figure is 4 percent lower than a year ago, likely due to the recent surge in new construction that has slowed the pace of rent increases. Applying the so-called 1 percent rule, which checks whether the monthly rent exceeds 1 percent of the purchase price, suggests that properties with lower purchase prices are more likely to meet this criterion.

One reason investors with multiple properties find Phoenix particularly appealing is the rental regulation. Arizona's state law ARS 33-1328, enacted in 1981, prohibits cities or counties from creating their own rent control ordinances. This means there is more flexibility to adjust rents according to market conditions at the time of lease renewal. However, this aspect may be subject to changes in state law, so it's advisable to check for the latest information at the time of contract.

The burden of property taxes is also relatively light. Arizona's effective property tax rate is about 0.51 percent based on the median, which is half the national median of 1.02 percent. Maricopa County, where Phoenix is located, is known to have a slightly higher rate of around 0.56 percent. For those accustomed to states with high property taxes, the difference in annual tax burdens on the same purchase price will be noticeable. However, since tax rates vary by county, it's essential to verify the rates based on the property address.

Investment property loans have different conditions compared to primary residence loans. A down payment of typically 15 to 25 percent is required, and while a credit score of 620 or higher may qualify for a loan, a score above 740 is preferable to secure better interest rates. Interest rates are often set about 0.5 to 0.75 percentage points higher than those for primary residences. If you already own multiple properties, it's practical to consider these differences when budgeting for your next purchase.

During the loan approval process, it's important to note that only about 75 percent of the expected rental income is typically recognized as income. The rental schedule attached to the lease agreement or appraisal report serves as supporting documentation, so preparing this paperwork in advance can make the next purchase approval process smoother.

If you choose to hire a property management company instead of managing the properties yourself, expect to pay about 8 to 12 percent of the monthly rent as a fee. As you accumulate multiple properties, there will come a point when managing them directly becomes overwhelming, so including this cost in your cash flow calculations from the start is a good way to avoid surprises later. Additionally, you will need to obtain landlord insurance rather than standard homeowners insurance, which covers rental loss and tenant liability but typically comes with higher premiums. A common rule of thumb is to set aside about 1 percent of the property value annually for maintenance costs.

One common question among investors managing multiple properties is about taxes after selling. If you sell an investment property and reinvest in like-kind assets, you can utilize the 1031 exchange to defer capital gains taxes, making markets like Phoenix, with relatively low entry prices, frequently mentioned as a reinvestment option for expanding portfolios.

For example, if the purchase price is $220,000 and the monthly rent is $1,679, the annual rental income would be just over $20,000. By subtracting property taxes, insurance, management fees, and maintenance costs from this gross income and dividing by the purchase price, you can calculate the cap rate. This metric helps assess which properties in Phoenix are relatively better and how they compare to other areas.

If you are considering a move with your family while also investing for personal residence, you will also want to look into school districts. Websites like GreatSchools or Niche can provide ratings, but since school district boundaries often change, it's advisable to verify the actual schools assigned to the address before purchasing.

While the numbers may seem attractive, it's essential to first conduct a conservative cash flow analysis that accounts for vacancy periods and interest rate fluctuations. This article does not constitute investment or legal advice, and it's recommended to consult with real estate and accounting professionals, and immigration experts if necessary, before finalizing any contracts.