Phoenix rental property analysis — calculator + 2026 cap-rate benchmarks
Run a Phoenix rental deal in 60 seconds with TrueCap. Address auto-fills Arizona property tax (~0.55-0.7% in Maricopa), HUD rent by county, and current FRED mortgage rates. Below: neighborhood cap-rate map plus Phoenix-specific notes on STR rules and HOA risk.
Phoenix neighborhood cap-rate map (2026)
Ranges reflect typical conventional-financing single-family + small-multi deals. Phoenix appreciation tailwind (500k+ residents added in 5 years) keeps cap rates compressed in core/premium neighborhoods.
| Submarket | Cap rate | Rent | Character |
|---|---|---|---|
| Downtown Phoenix / Roosevelt / Arcadia | 3-5% | $1,800-3,200 | Urban core + premium close-in; appreciation-leaning |
| Central Phoenix / Coronado / Encanto | 4-6% | $1,500-2,400 | Walkable historic, balanced cash + appreciation |
| Scottsdale (north Maricopa) | 3-5% | $2,200-4,000 | Premium suburban, top schools, low vacancy, high entry |
| Tempe (ASU area) | 4-6% | $1,600-2,400 | Student + workforce rentals, steady demand |
| Mesa / Gilbert (east Maricopa) | 5-7% | $1,700-2,400 | Family suburbs, newer SFR, growing fast |
| West Phoenix / Maryvale / Laveen | 6-8% | $1,300-1,800 | Working-class neighborhoods, solid cash flow |
| Glendale / Peoria (NW Maricopa) | 5-7% | $1,600-2,200 | Mid-cities, family suburbs, balanced |
Why Phoenix keeps drawing investor capital
Phoenix combines three favorable signals: massive net in-migration (500k+ residents in 5 years, with no end in sight), low effective property tax (~0.6% — among the lowest in the US), and a low-state-income-tax structure (2.5% flat). Trade-offs: appreciation-driven cap-rate compression in core areas, real long-term water risk for very far suburbs, and HOA-related rental restrictions on a meaningful share of post-2000 construction. For balanced cash + appreciation in a high-growth metro, Phoenix sits near the top of the US list.
Frequently asked — Phoenix investing
What's a typical Phoenix cap rate in 2026?
Phoenix cap rates in 2026 land 3-5% in premium close-in neighborhoods (Arcadia, Scottsdale, North Central) and 5-7% in inner suburbs (Mesa, Gilbert, Glendale, Peoria). West Phoenix workforce neighborhoods (Maryvale, Laveen) still produce 6-8%. The compression vs. Midwest reflects Phoenix's massive in-migration tailwind — the MSA has added 500k+ residents in 5 years.
What's the property tax rate in Phoenix?
Arizona has one of the lowest effective property tax rates in the US (~0.5-0.6% statewide). Maricopa County (Phoenix metro) typically lands 0.55-0.7% effective once city + school district overlays are included. Way below Texas (1.6-2.5%+) or Illinois (2.3%+). This is a real underwriting advantage in TX-vs-AZ comparison. TrueCap auto-fills the AZ rate; verify with Maricopa County Assessor for the parcel.
What about Phoenix water risk?
Real but often overstated for short-to-medium-term rental investing. Arizona is in a long-term drought; CAP (Colorado River) allocations have been reduced multiple times in recent years. For a 5-10 year rental hold, this is unlikely to materially affect your property value or tenancy. For a 20-30 year hold, do your own research — some far-suburban developments (Pinal County, far West Valley) face higher water-allocation risk than core Phoenix metro.
Is Phoenix STR (Airbnb) still viable?
Mixed. Arizona state law currently preempts most local STR bans, so cities CAN'T outright prohibit STRs — but they can require permits + collect taxes. Scottsdale, Sedona-adjacent properties, and pool-equipped SFR near major events (Spring Training, Phoenix Open) still produce strong STR economics. The economics rely heavily on the winter snowbird season (Nov-April); summer months are very slow. Underwrite STR with seasonal occupancy curves, not flat annual numbers.
Are HOAs an issue in Phoenix rentals?
Bigger issue than in most markets. A significant share of post-2000 Phoenix construction is in HOAs (planned subdivisions with monthly fees + rental restrictions). Some HOAs cap rental percentages or require minimum lease terms. Always pull the HOA's CC&Rs and current financials BEFORE committing — both for the rental restrictions and the special-assessment risk (HOA reserves are often underfunded). Avoid any HOA whose financials you can't get quickly.
How does Arizona's no-state-income-tax (low-tax) compare to TX or FL?
Arizona has a flat 2.5% state income tax — among the lowest in the US, but not zero like TX or FL. For an investor in the 24-32% federal bracket, that's a small additional drag on after-tax cash flow vs. TX/FL. Combined with Arizona's very low property tax (~0.6% vs TX's 1.6-2.5%), Arizona often beats Texas on net carrying cost despite TX having no income tax. Run both states through TrueCap's tax model to compare.
Run your next Phoenix deal in 60 seconds
Paste the address. Arizona tax, HUD rent for Maricopa, and current rate auto-fill. Cap rate, CoC, DSCR, and monthly cash flow in 1 second. Free to start. No card required.
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