By Michael Del Prete | AZREIA
While Phoenix rental prices overall continue to trend upwards, 2023 saw only a less than 1% increase in median rental prices YOY. A more noticeable difference landlords may have noticed is the increase of days on the market for Phoenix rentals, increasing from an average of 29 days in 2022 to an average of 39 days on the market in 2023. This has brought about a concern for many landlords who ask, “How can I ensure my rental properties receive maximum exposure?”
The answer is simple, use the MLS.
While MLS has traditionally focused on property sales, its extension to rentals is a significant development. This change is driven by the demand for a standardized and comprehensive database for rental properties. MLS listings offer a broader audience and standardized information, which can be crucial in a competitive market. Leveraging MLS becomes a strategic necessity to attract potential tenants efficiently.
We know through over 20 years of serving real estate investors in Arizona that most rentals aren’t posted on the MLS. One of the reasons for this is that, to post anything on the MLS, you need a realtor, and realtors cost money. Who wants to pay more money when their rental is already empty? Well, if the median mortgage payment on a home in Arizona is $1,616 then would you rather pay $500 to a realtor to post your property on the MLS, increase your exposure and visibility as well as decrease your days on market, or potentially have to pay 1 to 2 months’ worth of your mortgage out of pocket because your listing has been lost in the other thousands of listings on Zillow, ApartmentList, or Redfin? Not to say these sites aren’t useful, but the ability to post rentals for next to nothing saturates these sites with properties, whereas the MLS is exclusive to those property owners who are serious about their rentals and will spend money to make money.
Now, for the past two years, AZREIA has been conducting bi-monthly polls among our investor community, gathering critical data not typically found on MLS. This includes:
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- Net Profits for Fix and Flips
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- Average Hold Time for Fix and Flips
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- Wholesaling Assignment Fees
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- Rental Price Per Square Foot
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We gather this rental information because it’s coming not from Zillow, Redfin, or the MLS, but directly from landlords, which makes it invaluable. Our data shows that our landlords capture, on average, $0.20 more per square foot than the MLS average. So, how is this a reason to use the MLS? It’s not. It’s instead a reason to take all information and resources you have available to you into account. Especially when days on the market exceed forty and rental prices aren’t climbing at the rate they used to. These insights are crucial for our members, underscoring the importance of active participation in our polls and utilizing this exclusive information.
So, what does AZREIA offer landlords to help the exposure of their properties? Our data, for one, can increase your profits based on the information, an understanding of market data from the investor point of view as well as the general market view, and a community of real estate investors, businesses, and realtors to network with online and in person so you can make connections that could benefit you and your bottom line.
Think about it, your mortgage on your 1,500 sqft rental is $1,616, and you’ve been renting it at the median MLS rate of $1.26 sqft. You come to one AZREIA meeting and learn other landlords in your area are successfully renting their properties at $1.50 sqft. Now you can competitively price your rental and earn an extra $300 or so per month on your rental. That’s almost an additional $4,000 per year you’ve made from one meeting! Now, you can shake a few hands at the meeting and find a realtor who’ll give you the “Friends and Family” discount on their MLS posts, so it’s only $300 to post your rental on the MLS instead of the average $500. Now your property has more exposure, and your days on the market have decreased in a rental market where demand is tighter, saving you at least one extra mortgage payment you have to make out of pocket. Are you starting to see how these things can work hand in hand to make you a more effective landlord and investor? That’s the point!
The integration of rentals into MLS, combined with AZREIA’s unique data, presents an opportunity for our members to navigate the rental market more effectively. This dual approach provides a richer, data-driven foundation for making informed investment decisions. We encourage our members to actively participate in our polls and utilize the wealth of information available through AZREIA. This data, alongside MLS resources, is a powerful tool for strengthening your real estate investment strategies.
Happy Investing,
Michael Del Prete
AZREIA Executive Director