When it comes to investing in a property or real estate around Sedona there are a few key things that you should keep in mind.
First and foremost, the area is known for its red rocks and stunning scenery. So if you’re looking for an investment that will appreciate in value over time, Sedona is definitely worth considering. We always say location, location, location in real estate. As this is true there is an important difference for high-demand areas like Sedona.
You don’t need a red rock view.
I know what you’re thinking… “but, I want to see red rocks out my window every time I do the dishes”. This might be a “nice to have” but it’s certainly not a “must have” in Sedona. You may not realize this but Sedona is surrounded by red rocks. Even if you only have peek-a-boo views of red rocks from some windows, you are still in Sedona!
Most people visit Sedona to be outside, hiking, biking, exploring the city, etc. So don’t worry too much about the view as much as the other important things like the price.
“I’ve lived in Sedona for 35+ years. Red rock views has never been a “must have” when we buy investment properties for ourselves or our investors”
The real estate market in Sedona can feel complex and competitive. However, it doesn’t need to be. If a dozen people are making offers on a house and driving the price up way more than you were planning on investing, don’t buy it! Never buy something out of fear or FOMO (fear of missing out).
That should be the rule of thumb for every purchase you make in your life, but especially when investing in real estate in Sedona.
As we’ve all seen, the real estate market is cyclical and goes up and down. Robert Kiyosaki was right when he said “you make money in real estate when you buy”. Meaning, if you buy it right, you will always have enough equity to weather any storm.
If you’re looking to buy a vacation rental investment property in Sedona, it’s important that you work with a knowledgeable real estate agent who is also an investor. The agents that actually invest in the area they work in tend to know more and pay more attention to the market details than just your regular Joe.
Sedona is an investor’s paradise. Thousands of investors from all over the world visit Sedona and want to park their money in Sedona real estate. If you are doing a 1031 Exchange it is also important to speak with your realtor and ask them if they have ever done a 1031 exchange. You can ask them a pop quiz like ‘how many days do I have to identify a property?” and “how many days do I have to close on a property once my investment property sells?”.
If they answer quickly and confidently, you are in the right hands.
Your local Sedona realtor will be a great source of information and local expertise. However, always speak with an accountant or 1031 Exchange professional that truly knows what they are doing and can answer advanced tax questions. Your agent will usually recommend one if you don’t already have one.
Some other important things to consider when investing in Sedona real estate:
First, it is a highly sought-after destination for both tourists and retirees. As a result, there is a strong demand for long term rental properties in Sedona.
Don’t get wrapped up in the short term rental FOMO. There are plenty of great long term investors in the area who make great returns, provide housing for local families and enjoy the benefits of depreciation and appreciation. If you’re not interested in high risk, high reward investments, consider looking at properties that can be rented out long term. This will broaden your search and reduce the competition as you can look in HOA neighborhoods that Short Term Rental investors won’t be looking at.
Second, Sedona is located in a region that is known for its mild climate. This means that properties in Sedona are less likely to be impacted by extreme weather events, making them a more stable investment. The region experiences very little variation in temperature throughout the year, making it an ideal location for those who want to avoid extreme weather conditions.
Sedona still gets a lot of snow birds from Canada, the east coast, pacific northwest and the midwest. Keep this in mind if you are looking to do a mid-term furnished rental investment. I am a big fan of these types of real estate investments as the tenants are usually a much higher quality tenant than a 30 day furnished rental tenant. They treat the home as their own and end up coming back every year requesting your house like clock work.
Finally, Sedona is situated in close proximity to a number of major metropolitan areas. By purchasing a real estate investment in Sedona, you’ll be tapping into a larger pool of potential tenants or buyers from neighboring cities like Phoenix, Flagstaff, Prescott, and even Tucson.
With the right real estate investment property, you can ensure that you’ll be able to charge top dollar for rent. Each year, more and more people move out of cities and into more rural areas like Sedona and the Verde Valley. With no sign of this slowing down, even buying land and commercial property to fuel the growth Sedona and the Verde Valley is having is also a very lucrative investment. But that’s a topic for another article.
If you enjoyed this article please share it and give us a call. We’d love to speak with you. Our family has been investing in Sedona for more than 50 years. Everyone on the Equity Team is a Sedona Real Estate Investment Specialist. We’d be happy to help guide you in the right direction with your next investment.