Real estate investment is booming in Arizona thanks to job and population growth. Airbnb investing is also riding this wave of expansion. And while you can debate whether such home-sharing platforms are good or bad for local economies, most seem to agree, Airbnb properties in Phoenix represent a good investment.
What is Airbnb?
Airbnb is an online platform that allows people to rent their residence in whole or part to vacationers. Since 2008, property owners have been making quick bursts of cash from a business that requires practically no overhead or large investment, if any. The Airbnb movement has become a major factor in what’s called the “sharing economy,” in which people share cars, rides, office space and even their clothes.
Some cities hate Airbnb
Not everyone is a fan. Airbnb, has drawn the ire of some large cities that struggle with severe shortages in affordable housing and don’t appreciate the loss of room taxes they would normally receive from hotel sales. New York, Los Angeles, Barcelona, Paris and others have all passed regulations designed to limit the use of the Airbnb platform by property owners.
Arizona loves Airbnb
Arizona did just the opposite. The state legislature actually passed a law in 2016 making it illegal for cities to pass regulations that limit Airbnb rentals. The law also allows Airbnb to collect taxes from renters and pay them to the cities and towns on its own. Why? Researchers looking at the Arizona data have not been able to find a measurable negative impact on the housing market or the hotel industry. But they were able to see that people who come to Phoenix and stay in an Airbnb, spend a lot of money.
New York vs. Arizona
Tourists who make their way to Arizona differ from those seeking out larger cities such as New York or San Francisco. New York visitors, for example, spend the bulk of their time away from the hotel, exploring the city. Visitors to Phoenix are coming to enjoy the weather, play some golf, lay by a pool- in other words- all things you do at a resort. While Airbnb’s certainly attract visitors, they don’t seem to be luring a concerning number away from the hotels and resorts.
Airbnb’s don’t hurt housing
Nor are they having the impact on affordable housing, people say Airbnb is having elsewhere. Our relatively affordable cost of living and supply of space, allow builders to keep building more housing, unlike other cities in which buildings only go up, when another comes down. While metro Phoenix is seeing rising rents and real estate prices, job and population are fueling those surges, not the growth of Airbnb’s.
A good investment
The take away here is that the real estate market in Phoenix, as predicted, is growing, and will continue to do so. That boom includes Airbnb properties, particularly in metro Phoenix. Arizona’s efforts to protect home-sharing have created a very good environment for the investing in properties to be used as Airbnb’s.
At Landmark Title, we work with residential and commercial realtors along with their clients to provide escrow and title services. If you have questions or need assistance, please contact our office at (602) 768-2800 or visit our website.