Vacation Rental Market Analysis: Phoenix, AZ

The Evolve Team
The Evolve Team
February 21, 2023

Nicknamed the “Valley of the Sun,” Phoenix is a large metro area filled with activities fit for sunshine-chasers, sports enthusiasts, and everyone in-between. One-of-a-kind golf outings, luxury spa treatments, endless hiking, and live events highlight everything visitors love about America’s fifth-largest city.

With so much to see and do, it’s no wonder over 19 million people flock to Phoenix to bask in the sun and experience the area’s rich culture every year. The Southwestern locale works well for family holidays and romantic getaways alike, creating prime investment opportunities in Phoenix for curious buyers.

To help you understand the income potential this top vacation rental market presents, we created a free, downloadable vacation rental market analysis. Inside you’ll find: 

  • Rental income potential by property size
  • Average occupancy by property size
  • Average daily rate by property size
  • Average days booked in advance
  • Average length of stay
  • Vacation rental inventory by property size
  • Occupancy rate by month

The findings in this analysis are based on Evolve’s Phoenix market averages in the last year and provide a general baseline for performance potential. They’re designed to help inform smart buying decisions when investing in the Phoenix rental market.

Download Our Complete Phoenix Vacation Rental Investment Analysis

Purple icon of a Southwestern home with cactus, shrub and stars

Why Phoenix Is a Great Place to Own Vacation Rental Property

From sports fans and outdoor enthusiasts to families and recent retirees, Phoenix draws in a variety of travelers. Home to franchises in all major professional sports and nearly 200 golf courses, the heart of the city also boasts beloved museums, unique eateries, bars, dance clubs, and family-friendly spots like the Desert Botanical Gardens. Meanwhile, the surrounding area — including other popular cities like Scottsdale — has six major lakes and many mountain parks to explore.

Because it’s one of the sunniest cities in the nation, the Phoenix rental market has two peak seasons. The true high season is in the spring when, from February through April, tourists visit the area for the PGA Tour’s Phoenix Open, spring break plans, and the Major League Baseball Cactus League. There tends to be another boost at the end of the year, specifically from October through December, when snowbirds escape the cold for Southwestern sunshine.

Despite its popularity, Phoenix’s median home value sits at about $400,000, which is about $40,000 more than the national average. Our real estate experts say that Phoenix — when compared with other nearby towns — is the more affordable option, as Mesa and Tempe both require higher upfront costs. Investment opportunities in Phoenix are also more affordable than Flagstaff, which averages a median home value of $629,000.

Purple icon of a crystal ball with the words "profit prediction" in the middle with stars

How Much Money Can You Earn with a Phoenix Vacation Rental?

The Phoenix rental market is growing rapidly and, because of the area’s long history as a popular travel destination, it offers an exciting opportunity for consistent income for investors. In order to gauge just how much you can make with vacation rental, consider:

Property Size

Since Phoenix serves as a top destination for spring breakers and family vacations, properties that accommodate larger groups tend to earn the most revenue. So look for homes with multiple bedrooms that maximize square footage, and adjust your initial investment’s budget accordingly. 

But if bigger isn’t in the cards for you, there’s still plenty more room to earn. One-bedroom properties are Evolve’s top-performer with the most nights booked in the Phoenix area. However, according to our data, four-bedroom homes also have strong potential to earn with the most consistent occupancy rates throughout the year. 

The good news? One-, two-, and three-bedroom properties share fairly equal slices of the local inventory pie, with four-bedroom homes following closely behind. So no matter which direction you choose, you have a range of profit-proven options to help make your search easier.

Property Location

When exploring investment opportunities in Phoenix, it’s important to keep families in mind — especially when deciding where to purchase property. According to our team, travelers commonly prefer residential areas within five miles of downtown to get both privacy and easy access to live music venues, pro sports stadiums, and tons of museums and theaters.

Our experts also recommend looking for homes in north to northeastern neighborhoods — like Midtown, Camelback East Village, Arcadia, and Biltmore — as they grant easy access to downtown, the Phoenix Mountain Preserve, and neighboring Scottsdale. You could also opt for a home in communities surrounding South Mountain Park and Preserve. It’s just a quick commute from the nearby international airport and the surrounding towns of Tempe, Mesa, and Chandler.

Property Amenities

Phoenix is a known hub for high-end resorts, so you’ll want to do everything you can to provide five-star experiences. This includes hitting that home-away-from-home feel that contributes to repeat bookings. How? State-of-the-art appliances, smart TVs and other devices with streaming capabilities allow guests to feel plugged in while still unplugging. And providing top-of-the-line bedding and mattresses, comfortable lounge furniture, and open communal spaces gives everyone the ability to fully unwind.

Of course, you’ll also want to extend guests’ ability to entertain through an updated outdoor space. So, think of amenities like grills, proper shading, and sturdy outdoor tables. (You could even consider a putting green to make yours a unique vacation rental ideal for golf enthusiasts.) Our team also says homes with swimming pools are the biggest profit-driver in the Phoenix rental market, and heating that pool guarantees guests can enjoy it year-round. 

Want to go the extra mile? Install a child-safety fence around the pool, include baby gates for parents to use, and provide high chairs and Pack ‘n Plays so little ones never miss out on the fun. Families also love traveling with their four-legged friends, so if the yard isn’t already fenced, create a pet-friendly space that allows them to roam with water bowls, shady areas, and various play toys provided.

Ready to explore investment opportunities in Phoenix? Start your search with vetted homes for sale.

Download Our Full Phoenix, AZ Vacation Rental Market Analysis

As guests seek more personalized vacation experiences, take a closer look at all this Arizona market offers by downloading our free Phoenix Vacation Rental Market Analysis. It provides tons of useful information, including:

  • Inventory breakdown based on property size
  • Average daily rates based on property size
  • Expected seasonality in vacation rental demand
  • Average length of stay in high and low seasons

And remember, you don’t have to sweat finding the perfect investment opportunity in the Phoenix rental market. Use these exclusive performance insights to set yourself up for long-term success in the short-term rental industry today.

Get Your Vacation Rental Market Analysis

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