Phoenix Homeowners: Should You Sell or Rent Your Property?
Thinking about moving but not sure whether to sell or rent out your Phoenix home?
You're not alone. With Phoenix's rapid appreciation over the past few years, many homeowners and investors face a tough decision: mortgage payments are often higher than current rental rates but selling means giving up a valuable asset and potential long-term wealth.
As an Investment Sales Associate with Renters Warehouse overseeing all buying and selling across Arizona markets—and with 14+ years of Phoenix real estate experience—I help property owners analyze both options and make the best financial decision for their future.
This isn't a one-size-fits-all answer. Let's look at YOUR specific situation.
The Current Reality for Maricopa County:
📊 Average Home Value: $450,000
💰 Average Monthly Rent: $2,400
🏦 Average Mortgage (recent purchases): $2,800-$3,200/month
📈 Annual Appreciation (10-year average): 6-8%
💵 Equity Gains (past 5 years): $150,000-$200,000 for most homeowners
The Challenge: Many properties purchased in 2020-2024 have negative cash flow as rentals, but selling means losing future appreciation and tax benefits.
The Opportunity: Strategic analysis can reveal the best path forward based on your financial goals, timeline, and next steps.
When Selling Makes Sense:
✅ Your mortgage is significantly higher than rental income (negative cash flow >$500/month)
✅ You need the equity for your next home purchase or to acquire a better investment property
✅ You don't want landlord responsibilities and prefer a clean exit
✅ The property needs major repairs you can't afford or don't want to handle
✅ You're relocating far from Phoenix and don't want to manage remotely
✅ Market timing is optimal (high demand, low inventory, strong buyer interest)
✅ You can reinvest proceeds into better-performing assets (1031 exchange into higher cash flow property)
Example Scenario:
Your mortgage: $3,200/month
Potential rent: $2,400/month
Monthly loss: $800
Annual loss: $9,600Solution: Sell now, capture your equity, and either:
- Use proceeds for your next home purchase
- 1031 exchange into a cash-flowing investment property
- Reinvest in multiple properties with better returns
When Keeping as Rental Makes Sense:
✅ You can cover the monthly shortfall temporarily (and have cash reserves)
✅ You bought before 2020 with a lower mortgage payment (better cash flow potential)
✅ The property is in a high-appreciation area (future equity growth offsets current loss)
✅ You want to build long-term wealth through real estate
✅ Tax benefits offset the monthly loss (depreciation, deductions, write-offs)
✅ You plan to pay off the mortgage within 10-15 years (then it becomes pure cash flow)
✅ You're acquiring another property and want to keep this one for portfolio growth
Example Scenario:
Your mortgage: $2,800/month
Potential rent: $2,400/month
Monthly shortfall: $400
Annual shortfall: $4,800
But consider:
- Tax benefits: ~$3,000-$5,000/year in deductions
- Appreciation: ~$27,000/year (6% on $450k property)
- Equity paydown: ~$6,000/year (tenant paying down principal)
Net Position: You're "losing" $4,800/month but gaining $36,000+ in wealth annually.
Solution: Keep as rental if you can afford the shortfall and want long-term wealth building.