Curious about diving into the world of short-term rental investment in Scottsdale, Arizona? Wondering how to maximize your returns and navigate the regulatory landscape? Look no further! We've teamed up with the experts at BookSmart Properties to bring you an insider's guide packed with essential insights, straight from the heart of Scottsdale's thriving rental market. In this blog, you’ll learn more about Cash on Cash Returns, Cap Rates, Occupancy Rates, Fees, and the legal requirements impacting short-term rentals.
Cash on Cash Return (CoC) and Cap Rate:
CoC return and cap rate are key metrics used to evaluate the profitability and investment potential of a rental property.
For well-managed short-term rentals, the cap rate typically ranges between 8.5% to 13%, although this can vary based on factors like property type and market conditions.
This indicates that short-term rentals in Scottsdale can offer relatively high returns compared to other real estate investments.
Occupancy Rates (OR) for Properties with Pools vs. Without Pools:
The analysis compares the occupancy rates of upscale 3-4-5 bedroom STR listings with private pools to those without pools.
Properties with pools have significantly higher occupancy rates, with an average of 62.59% and a median of 63.00%, compared to properties without pools, which have an average of 44.09% and a median of 38.90%.
This suggests that having a pool can significantly boost the occupancy and revenue potential of a short-term rental property in Scottsdale.
Legal Requirements and Regulations:
Short-term rental owners in Scottsdale must obtain an annual city license for each property, with an associated fee of $250 per property.
Additionally, owners must hold a valid Transaction Privilege Tax (TPT) license for each rental property and notify neighboring properties about their rental activities.
Compliance with Maricopa County registration and displaying the required short-term rental notice is also mandatory.
Transaction Privileges Sales Tax:
The breakdown of transaction privileges sales tax for Scottsdale short-term rental properties is detailed, revealing a comprehensive tax rate of 14.020%. This includes taxes at the county, state, and city levels, as well as specific transient taxes.
City Transient Tax:
The city transient tax rate for Scottsdale STRs is specified as 5.0%, which is a component of the overall tax burden for property owners.
Management Practices:
BookSmart Properties is a reputable management company with a successful track record in short-term rental management.
They emphasize their use of advanced analytics, smart home technology, and robust management systems to optimize returns and ensure the security and maintenance of their properties.
Investing in real estate in the Scottsdale area is not just a financial decision; it's a smart move into a city that seamlessly blends natural beauty, culture, and real estate opportunity. With year-round appeal, diverse attractions, a luxurious lifestyle, and the added allure for celebration seekers, Scottsdale is an Airbnb investment gem waiting to be discovered.
If you're considering investing in a short-term rental property, contact us today for expert guidance. We can also connect you with our trusted property managers to streamline the process and maximize your investment potential.
Bonus Tip: Perfect for Nurses' & Doctors Short-Term Rentals: Investing in real estate in the Scottsdale area could also be an ideal opportunity for short-term rentals to nurses, doctors and anyone with a medical background. With medical facilities nearby, providing comfortable and convenient accommodations for healthcare professionals could be a win-win for both hosts and guests. Explore this niche to maximize your property's potential in this thriving market. So, why wait? Dive into the Scottsdale real estate market and turn your investment dreams into a desert oasis of success!