Scottsdale Real Estate & Community News

My wife, Andrea, and I, both Scottsdale Realtors, have been investing in Scottsdale real estate in the form of condos in Old Town for a couple of years now.  Why do we choose such an avenue to invest in?  We see real estate as a pretty safe bet.  As markets shift, real estate has always maintained an upward trend.  Due to this long-term upward trend we see the following benefits:

1.     Long-term gain due to appreciation

2.     Long-term gain due to equity created from paying off the mortgage

3.     Positive cash flow

4.     Tax benefits 

While there are lots of numbers floating out there, they all generally agree that at least 80% of millionaires own investment real estate.

At times you hear the horror stories of real estate about people losing money when the economy shifts.  The answer to this is simple, if history is going to repeat itself (as history generally does) the market always comes back.  What does this mean for the investor? It means that the conservative investor is focused on long-term rental income and isn’t going to go broke by having an extended vacancy.  More simply put, invest within your means, make sure that if you have to pay the mortgage out of your pocket for 6 months that it isn’t going to break you.

The 5 Pillars of How We Invest in Scottsdale Real Estate 

1. Stick With What We Know – Andrea and I know Old Town Scottsdale very well.  Not only do we live in Old Town and own multiple condos in the area, but we also help lots of buyers purchase Old Town Scottsdale AZ condos and lots of sellers sell them.  We are constantly walking the neighborhoods and reviewing listings on MLS.  After reading this post you can use our website to search Scottsdale condos for sale.
2. Nothing New – We don’t purchase brand new luxury condos for investment purposes.  We consider these condos to be speculative investments as the price can waiver quite a bit and are likely to depreciate.  Purchasing one to live in is fine as long as you understand what you’re buying and don’t have aspirations for building equity through appreciation.  Remember what they say about what happens when you drive a new car off the lot? The same generally goes for brand new condos.
3. Price Range – In Old Town Scottsdale we’ve found that the sweet spot for purchasing condos as investment properties is approximately $175,000.  A year ago it was closer to $160,000.  We look for condos around this price point.  As you start going up from $200,000 you begin to see diminishing returns on your investment.  If you’re looking for something more expensive, you might consider purchasing a house instead. 
4. Furnished – We do all of our condos as furnished rentals.  This demands a much higher price point, especially if you’re going to be investing in areas such as Scottsdale where there are going to be snowbirds visiting and looking for places to stay.  Furniture, decorations, and supplies (think kitchen) combined generally cost around $7,500 per condo to get it up and going.  It’s not at all uncommon to realize an additional $500 to $1,000 per month per condo in Scottsdale just for having the condo furnished, and that doesn’t necessarily mean a short term lease.  If you do those numbers, you’ll see that you often get a return on your furnishing investment in less than a year. 
5. 15 Year Mortgages – This is definitely part of our strategy that I don’t personally recommend for everyone, especially when interest rates are this low.  This strategy does, however, work for us because we have personal goals, and those goals include getting these properties paid off.  It’s much much easier to chip away at a 15-year mortgage vs. a 30 year and the payment difference is surprisingly similar. You of course also have the option when investing in condos or other properties to write a longer mortgage but pay it off at a faster rate. With recent interest rate increases, the 15-year mortgage doesn't always make sense. It's easy, however, to write a 30-year mortgage and pay it off as a 15-year or quicker.  We can put together the amortization tables for you so you know exactly how you should be paying off your condo investment.

The Basics of Condo Investing

 This, of course, is our personal condo investing strategy.  Lots of people make good money investing in all sorts of real estate.  At the end of the day what rental real estate has in common is that it works this way:

1. The investor puts down a fraction of the cost of the real estate they’re purchasing.  This is usually a 20% down payment
2. A tenant pays the majority or all of the mortgage, sometimes with a surplus which we call “positive cash flow”
3. The real estate investor gets all the equity 

It’s really hard to find flaws in this logic, especially when interest rates are as low as they currently are. (Update: interst rates are climbing but they're still low enough that you should be buying now before they climb higher).

If you’re interested in purchasing real estate but don’t have a down payment, you might consider purchasing a house or condo to live in for a year or two and then renting it out.  This allows you to put down 5% for conventional financing vs. the 20% as an investment property.  If you qualify for programs such as a VA loan or the Home in Five Program this may be as little as 0%.  There are also programs for professionals such as doctors, lawyers, and certified public accountants.

Let Us Educate You on Real Estate Investing Scottsdale

Andrea and I absolutely love to educate all levels of investors on how to make your money work for you through real estate investing.  IIf you're interested in learning more you can fill out our contact form or please give us a call at (480)-387-3990.  We absolutely want to talk to you!  

Remember, you can use our website to search all Scottsdale real estate. Our website has direct access to the Arizona Regional MLS and lists all Scottsdale homes for sale which much more accurate data than you'll find with the Arizona Zillow site.

It should also be noted that not all of the properties we assist investors with buying or selling are on MLS or ever even get listed on MLS  In fact, a large portion of the condos we assist investors with never touch MLS, generally because we have investors that are ready to purchase a property when the right one comes along. We also have a list of individuals ready to sell when the right condo investor comes along. For this reason, if you have any interest in purchasing or selling an investment property the best first step is to contact us now.

Old Town Scottsdale Optima Camelview Condos Show Decrease in Sales Price YOY

As Scottsdale Realtors we want to keep you informed about all Scottsdale Real Estate activity including the Optima Camelview.

For the first quarter of 2016, Optima Camelview Condos in Old Town Scottsdale has seen an average sales price decrease vs. the same period in 2015.  Optima Camelview Condos for Sale that closed escrow in the first quarter 2015 head an average per foot sales price of $400.85 while the Optima Camelview Condos average sales price in the first quarter of 2016 was $389.85.  Present Optima Camelview Condos for Sale show an average per square foot list price of $414.44.

These numbers are based off of a total Optima Camelview sales volume of $8,630,500 across 14 total sold listings in 2015 and a total sales volume of $7,587,000 across 15 properties in 2016.

At the time of this writing, there are 52 active Optima condos for sale in Old Town Scottsdale.  Of those condos for sale in the optima, 17 have one bedroom, 27 have two bedrooms, 7 have three bedrooms, and 1 have four or more bedrooms. 

In the first quarter 2015 the average days on market for a condo for sale in The Optima Camelview was 177 while in 2016 these Old Town condos were for sale for 145 days prior to closing escrow.

Overall there is a decrease of 2.7% in the average per square foot sales price for the Optima Camelview when comparing the first quarter to the second quarter.  While the MLS doesn’t show how many listings were active during a previous period, we may hypothesize that the high inventory in this community as well as the addition of new Old Town Scottsdale condos (most of which are luxury condo complexes) drove to this price decrease.  Overall the average per square foot sales price for Arizona homes climbed during this same period.

If you would like more information on Optima Camelview condos for sale or other Old Town Scottsdale condos for sale, please contact Andrea Lilienfeld with The Kay-Grant Group.  Andrea is an expert in condos for sale in the The Optima Camelview as well as condos for sale in Old Town Scottsdale. 

Please note that all information in this post can be considered accurate but is not guaranteed.

If you're interested in learning more you can fill out our contact form or please give us a call at (480)-387-3990.

Condos can be excellent for purchasing as an investment. When purchasing a condo as an investment, however, it’s important that you understand the things you should look for prior to pulling the trigger.  In addition to being Scottsdale Realtors, Geoff and Andrea Lilienfeld also own multiple Scottsdale Condos in Old Town Scottsdale.

HOA Rules & Regulations 

Condominiums are governed by a home owner’s association that is responsible for enforcing the rules and regulations of the community.  Some common pitfalls that you could run into include rules around rentals.  It’s very common in Scottsdale for the minimum rental period to be 30 days per the rules & regulations.  This is in line with zoning ordinances so is pretty standard.  Some communities, however, may have rules that require a 90 day (Optima Camelview), 6 months, or 1-year minimum leases.  Some communities strictly forbid rentals at all.  It’s extremely important that you understand all rules & regulations prior to purchasing a condo as an investment property.

HOA Financials 

Make sure to get a copy of the last two years of HOA financials.  Once you get the financials take a look at the bottom line, most like likely called Profit (or loss).  You want to be sure that the HOA is running at a profit, and not at a loss.  A strong HOA should also have a reserve or capital improvement account.  It’s important that the reserve is getting larger.  If there were some recent capital improvements made the reserve may have been tapped into, which is fine.  What you want to be careful of is that the reserve isn’t shrinking because the HOA is using it to fund normal operating expenses.  A good rule of thumb is that the HOA should have $1,000 in reserves for every unit in the complex.

Understand the HOA Dues

Don’t look for the communities that have really low HOA dues.  You want the HOA dues to be high enough that they cover the community’s expenses and have money left over to contribute to the reserve account.

In a lot of Scottsdale Condo communities, electricity, gas, or other utilities may be included.  As we all know in Arizona, electricity can get pretty expensive in the summer so make sure to subtract at least $100 per month when considering the HOA dues.

If the condo community has a gym that’s nice enough that you don’t need a gym membership, that’s also a measurable savings. 

Walk the Grounds

This may sound obvious but a lot of investors forget to take the time to perform due diligence of the grounds.  Walk around a little bit, talk to some people, and get a feeling for the overall condition of the condo community.  Hopefully, you’ve already seen the financials and have an idea of what the condo community has in their capital reserve account.  Compare the amount of deferred maintenance to that capital reserve account.  If there’s a lot more deferred maintenance than there is in the HOA’s capital reserve account you may want to reconsider.  This is what leads to a special assessment.

Some of the items you should keep your eyes out for while walking the grounds include: 

• Pool – What does the water look like?  Will it need to be resurfaced anytime soon?
• Roof – How old does the roof look?
• Parking – In Scottsdale most communities have covered parking and many have very dated structures.  Take a look at the structure to see if it's going to need to be replaced soon
• Asphalt – Take a look at the condition of the actual asphalt, repaving can be very costly
• Building Condition – Just having to paint a condo community can be expensive, if there’s extensive stucco or structural repair needed the bills can add up quickly

Find Out Rental Rates

In Scottsdale, condo rentals are often advertised on MLS.  This is beneficial to you because it means that your real estate agent can pull comps on MLS to see what other condos in the community have rented for much the same way he/she can pull comps for what condos sold for.  Ask your Scottsdale real estate agent to pull this data for you so that you can do the math. 

We Can Help

The above are some things you should definitely pay attention to when purchasing a condo as an investment property.  There are, of course, other things that you should be on the look out for when considering an investment property.  The best way mitigate the pit falls is to have a real estate agent that is very familiar with investment property purchasing and can give you good advice on communities to choose.  

Geoff and Andrea Lilienfeld own three Scottsdale condos as investment properties.  We love to help other investors find the perfect fits.  If you're interested in learning more you can fill out our contact form or please give us a call at (480)-387-3990. 

From our site, you can search Scottsdale condos for sale. Our website has access to the true MLS data, not just what gets syndicated like Scottsdale, AZ Zillow.

You may be interested in taking a look at Scottsdale Shadows condos. 

Optima Camelview Residents are Excited!

For years I’ve heard of how amazing Postino in Gilbert is for sharing a bruschetta board and a bottle of wine with friends.  When we saw that there was a Postino going up across the street from the Optima Camelview we patiently waited for the day we could conveniently see what all the hype is about.

That day came a little less than a month ago and I must say that the Postino really adds to the Optima experience.  There are of course plenty of restaurants within walking distance seeing as how the Optima is in the heart of Old Town Scottsdale, but there’s always something to be said for being able to sneak away with a three minute walk to grab a happy hour glass of wine and a tasty appetizer.

If you’re not familiar with Postino, they’re know for their bruschetta and, most importantly, their happy hour specials.  Until 5pm they offer $5 glasses of wine and starting at 8pm on Mondays and Tuesdays you can get a bottle of wine and a bruschetta board for just $20! 

If bruschetta isn’t your thing they also have quite a selection of paninis.

The Old Town location across from the Optima Camelview has glass walls that open up to the restaurant to Indian School and a large back patio complete with misters.

If you live at the Optima or in the vicinity I would highly recommend that you stop by for a glass of wine and some bruschetta.  My personal favorite is the Prosciutto Figs & Mascarpone.

If you’re suddenly interested in living at The Optima because you’re that large of a fan of Postino, you can find a list of all of the Optima Camelview Condos for sale on our site as well as neighboring complexes such as Scottsdale Waterfront condos for sale.

Remember that our site has live data from the Arizona MLS unlike Zillow Scottsdale which is much more likely to have out of date data.  You can view all Scottsdale homes for sale.