New York, San Francisco, Boston -- these are all names we expect on the country's list of highest rents. But this month? A surprising smaller town joined the mix.
According to rental platform Zumper, little Scottsdale, Arizona, is now the No. 10 most expensive place to be a renter. The average rent on a one-bedroom in this Phoenix-area suburb now clocks in at a whopping $1,850 -- just under rents in Miami, Los Angeles, and San Diego.
Are you on the hunt for a new rental property? Should Scottsdale be on your radar? Let's dive in.
Rising rents in the Phoenix area
Rents in the Phoenix region have been on a tear in recent months, notching a 22.3% increase since just last September. In Scottsdale, specifically, rents have increased 5.1% since August and are now up 23% compared to last year.
Scottsdale isn't the only suburb in the area to see steep upticks, either. Nearby Mesa, Glendale, and Gilbert have seen significant increases, too. In fact, in Gilbert, rents on one-bedroom properties have jumped nearly 25% compared to last year.
According to the report, the bump is the result of a perfect storm of sorts, one marked by:
- A population spike: Phoenix's population has grown 16% since just 2010, while Gilbert's is up almost 22%, and Scottsdale's is up 19%.
- Rising home prices: Like in most parts of the country, home prices have been jumping in the Phoenix area. Since the start of the pandemic, they've increased 38%, according to Zumper. This is driving up demand for rentals, as more and more potential buyers get priced out of the market.
- Lots of iBuyers: A huge iBuyer presence has also made the market more costly. According to Zillow, iBuyers account for nearly 6% of all sales in the Phoenix area -- the highest share of all major iBuying markets.
Altogether, "This has priced a lot of would-be buyers out of the home sales market, and others simply don't want to deal with the intense competition of bidding on a house with numerous other potential buyers," Zumper's report reads. "What that means is a lot of people who would normally be buying are still renting. These renters have grown in numbers over time and have gradually put upward pressure on rent prices."
Good news for landlords
Clearly, rising rents are good news for landlords. But remember: While Phoenix may be a great place to have a rental property right now, it's not an easy place to buy one. With inventory down and prices (and competition) up, finding a low-cost, high-ROI investment home is an uphill battle.
If you do opt to invest in Phoenix, make sure you work with a tuned-in local real estate agent, and be prepared to pull out all the stops. Waiving contingencies or offering all cash can help.