Dean Lawton 

Have you seen a huge increase in appreciation amongst all this busy activity?

Eddie Lack

We bought our Airbnb two years ago here. We bought in the $400,000 range and now the same properties go for around $800,000. We're seeing the projected numbers and everything still says that the market is going to go up. Double digits in appreciation the next year here. 

Alex McFadyen

I was just talking to an agent earlier today and asked him to send us numbers from where we live just outside of Vancouver. Across the board, it was up 35%. Condos were up 30%, houses were up 40%, and townhomes were up 40%.

Have there been any big changes in rates in the last year? If so, has it changed what people are doing?

Eddie Lack 

Not so much in the last year, but we have seen in the last few weeks that it's starting to creep up a little bit. Things are starting to change. From what I'm hearing from my lenders is that by April or May, there is going to be a big hike down here in interest rates.

Alex McFadyen

We're hearing a lot of talk about that in Canada, rates potentially going up. It's unique here because you have to qualify for a rate that's way higher than you have. It's unlikely that would make a difference in what people can qualify for. 

WHY ARE PEOPLE MOVING TO SCOTTSDALE?

You mentioned 90,000 people moving to Scottsdale. Why are they moving there? What type of people is moving there?

Eddie Lack 

There are always people that like to spend a lengthy amount of time here. They always say I didn't expect it to be this nice and I didn't expect so many things to do. A lot of people are getting tired of the weather and politics in the other states. Last month, we had a surge of Canadian because we don't have as many restrictions. They're buying a rental property down here with thoughts of relocating eventually. I have three, three clients right now that we're working on relocating down here.

Alex McFadyen

What what are people doing when they're getting there? Not everybody can buy a house when they move to Scottsdale but there's probably a lot of people who are interested in doing so. You mentioned a lot of Canadians coming down to buy investment properties or rental properties. When we first spoke and we did our first podcast, you mentioned that you had done a few Airbnbs yourself.

Click the video below to watch Eddie Lack's first appearance on The YVR REMO Show!

Why are people investing in buying rentals in that area, aside from the lifestyle and the appreciation?

Eddie Lack 

Strictly from an investor standpoint, it's the ROI. It made a ton more sense when I bought mine two years ago. It is starting to become a little bit oversaturated here and we're kind of at a tipping point. I feel like Airbnb still makes sense at this price but if these $800,000 properties go up another $150,000 then from an investment standpoint, you're hoping that the appreciation is going to come.

INVESTING IN AN AIRBNB IN ARIZONA AS A CANADIAN

Dean Lawton

I'm experienced with Airbnb here in Vancouver. I like it because it's close by. The fear from a Canadian like myself is if it's out of town, it's out of sight, out of mind. Who's managing it? There's a lot of activity, and if I didn't have the professionals to support me, it wouldn't be happening because I don't have the capacity with my business to do that.

When you set up a Canadian that's eager to get into this market, are you putting the whole package of professionals together? 

Eddie Lack

I describe us as a one-stop-shop with full-on management and real estate, we have everything. We help you buy it. We have the management company, if you need need to do remodels. We have a ton of clients that we're doing remodels for now with my contractor here. We have someone that helps us furnish the places. Anything you can think of, we can provide the connection.

Dean Lawton 

To have that support, even just from furnishing, seems easy to do but it's not.

HOW IS THE CURRENT RENTAL MARKET PERFORMING IN SCOTTSDALE?

Alex McFadyen

If a client is buying a house today at that $800,000 range that you mentioned for renting, what are they netting every month after their expenses?

Eddie Lack 

It's very different from month to month. January through May and a little bit of June are extremely busy months here. It fluctuates a lot. We still have really good occupancy during the summer, which is extremely hot here. Our prices drop a lot. I always like to think about it on a year as a whole. When mortgage, all the bills, and all the property management fees are paid for, you're netting around like $50,000 a year for those properties.

Dean Lawton

I find that tourists like myself seem to attract to the Old Town Scottsdale area. I like the North Scottsdale area with family and kids. Those are the two areas I feel everyone knows.

WHICH AREAS WOULD YOU SUGGEST FOR AIRBNB INVESTORS?

Are there other parts of Arizona near those locations that you would recommend for specifically Airbnb tourists?

Eddie Lack 

When we first started buying, the rule of thumb was you have to be north of Thomas, which is a road here. Nothing south of Thomas because those houses are all 50 to 60 years old. Two years later, 30% to 40% of those houses are all renovated. We've crept more and more south here but it's still the Old Town area that is popular. What I like about those two is you are smack in the middle between Scottsdale and Tempe, which is our huge college town. 

ARE THERE NEW DEVELOPMENTS BEING BUILT IN SCOTTSDALE?

Dean Lawton 

With 90,000 people coming into the state or the area in the last year, I can only imagine it's going to be higher this year. 

Where are these people going? Are there new developments happening in the Scottsdale area?

Eddie Lack

We don't have that much more area to build. Everything is getting pushed north to Desert Mountain but we're getting close to the mountains there. There's not that much more space to build in that valley now. A lot of people are moving out on the west side towards Peoria and Verado. They just got so much bang for their buck when they sold their house here in Scottsdale.

Alex McFadyen

Do you think Scottsdale is going to remain the hub and that's going to be increased in value because of the lack of supply?

Eddie Lack 

Everyone always says I want to live in Scottsdale. This little area that we have with Scottsdale, Paradise Valley, and Arcadia is just a hub. This is where everyone wants to live. 

IS THERE STILL AN OPPORTUNITY TO PURCHASE AIRBNB IN THE SCOTTSDALE AREA? 

Would you suggest that there still is a fair amount of opportunity for people to get into an Airbnb-type rental or do you see the next year being saturated? 

Eddie Lack 

I think that we have another year left before the prices have gone up so much that it's not worth it anymore. It all depends on what you're looking for. Within the next year, it's mostly going to be scooped up by these big companies. That is kind of going to push out the everyday person that was looking for one or two rentals to get a little bit more income. That's what Airbnb was made for. The opportunity still is to buy something and do a value improvement on it. You're renovating the inside or you're adding a pool. I still think that you can get decent places in the $500,000 range and you can put $200,000 into it. The post-renovation value is probably going to be around $900,000. That's kind of where I still see the opportunity, to do a value add of some kind.

Dean Lawton 

In regards to Airbnb, I know we've seen some significant changes in the city of Vancouver, specifically with licensing and requirements. We've seen almost every building now decline Airbnb. People have gone down there to purchase a property for Airbnb, and now they can't do it just because of government demands and changes.

ARE THERE ANY RESTRICTIONS ON AIRBNB?

How is the government looking at Airbnb when it comes to a license? How many can you own? Are there any restrictions there? Is there any fear that some restrictions could come into play? 

Eddie Lack

No restrictions as of right now. They are trying to keep an eye on and make restrictions around how many people can stay at an Airbnb. They're just trying to get away from the big parties because that's what all the neighbours complain about. There are no restrictions. If there are going to be restrictions, eventually, it's more going to be against these bigger companies to buy hundreds of these properties. They also know how much revenue these Airbnbs bring into the city of Scottsdale. The hotels are all fully booked for spring. People are going to have to stay somewhere. They are trying to find some middle ground with limiting how many one person can have. 

Alex McFadyen 

There have been so many cities locally, where people buy short-term rentals. Six months later, there are restrictions and rules, and you can't do this and you can't do that.

LONG-TERM RENTALS

Is there anybody buying investment properties in Scottsdale for long-term rentals? 

Eddie Lack 

Airbnb is like a race car and the long-term rental is like a Volvo. It doesn't bring as much income, but it's a nice and steady cash flow. Rents have gone up so much in the last year here as well. Long-term rentals make total sense.

STEPS TO WORKING WITH EDDIE AND HIS TEAM

Alex McFadyen 

If somebody reaches out to you or they get referred down to you, what are your next steps? What should somebody be prepared to do?

Eddie Lack 

The first step that I always want before I started working with people is pre-qualification or proof of funds. That's your ticket to starting the search and start looking at properties. Depending on if the person is local or Canadian, then we start looking at what you want and what price range you're pre-qualified for. What kind of investment property did you want to have or do you want to live here? It all depends on the situation. From there, we zoom in on different areas and I just started sending properties to see what type of style of house you want. It's just like finding the right property for the right person.

Alex McFadyen 

I love the first thing you said, get your money sorted out and proof of funds. So many horror stories we hear. We get a phone call last minute from somebody saying, I thought I was qualified by my bank, but I wasn't and now I can't close. Glad that you're on top of that. Get your ducks in a row and talk to us first. Then we'll hook you up with Mr. Lack and we'll find a way to get you buying your Scottsdale dream property.

Reach Eddie and his team by visiting his website below!

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