Introduce
With a population of approximately 200,000, Tempe is a bustling city located in Maricopa County, Arizona. Known for its vibrant nightlife, exciting outdoor activities, and top-tier educational institutions, Tempe is a popular destination for travelers seeking adventure, culture, and education.
Over the past few years, the city has seen a significant increase in the number of Airbnb rentals as investors seek to capitalize on the growing demand for short-term accommodation.
In this guide, we’ll take a closer look at the short-term (Airbnb) rental market in Tempe, AZ, exploring key data points and trends shaping the industry.
Supply
The most popular homes are 4-bedroom homes, comprising 26.07% of inventory. This is followed by 3 and 2-bedroom homes at 25.89% and 13.72% of the total inventory, respectively.
Investment Opportunities
One of the key factors driving the growth of the short-term rental market in Tempe is the relatively high gross yield. According to Chalet, the average gross yield in Tempe is 7.04%. This means that investors can expect to earn a significant return on their investment, making short-term (Airbnb) rentals an attractive option for those looking to generate income from real estate.
Another factor that makes Tempe an attractive market for short-term rental investors is the relatively low property tax rate. According to SmartAsset, the average property tax rate in Maricopa County is 0.64%, making it one of the lowest in the state of Arizona. This means that investors can keep more of their rental income, further increasing the profitability of their short-term rental properties.
Average Daily Rate
The median ADR for the market is $194.40. The Average Daily Rate is the highest for 7 bedroom homes ($643) followed by 6-bedrooms and 5 bedrooms at $535 and $444 respectively.
Real Estate Market Trends
It’s worth noting that the Airbnb rental market in Tempe is not isolated from the broader real estate market in the area. According to Zillow, the median home value in Tempe is $477,005, which represents a 4.00% appreciation in home values over the past year. This indicates that the local real estate market is healthy and growing, which bodes well for short-term rental investors who may also be looking to purchase properties in the area.
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Regulation and Investor Friendliness
When investing in short-term rentals, one important factor is the local regulatory environment. In Tempe, Airbnb rental regulation is generally considered to be investor-friendly. Unlike some other cities that have imposed strict regulations on Airbnb rentals, Tempe has relatively few restrictions on the industry. This makes it easier for investors to purchase and manage short-term rental properties without navigating complicated regulations or facing unexpected penalties.
Hosts
The market is not dominated by property management firms. The largest host is Ryan with 1.3% of the total inventory and an average review of 4.99⭐️s .
Median Household Income
According to the United States Census Bureau, the median household income in Tempe, AZ, was $64,080 in 2021. This is slightly higher than the median household income for the state of Arizona as a whole, which was $62,055 in the same year.
Climate
Tempe is located in the Sonoran Desert, which means that it has a hot, arid climate. Summers are very hot, with temperatures often exceeding 100 degrees Fahrenheit, while winters are mild and sunny. The city receives very little rainfall throughout the year, making it a popular destination for outdoor activities like hiking, biking, and golfing.
Population Size
According to the United States Census Bureau, the population of Tempe, AZ, was 195,805 as of 2020.
Sports Teams
Tempe is home to Arizona State University, which has a strong athletic program. The university’s sports teams are known as the Sun Devils and compete in various sports, including football, basketball, baseball, and more.
Guests
The majority of the guests come from inside of Arizona. 4.28% of all guests are from Phoenix followed by Los Angeles with 2.53%.
Colleges
In addition to Arizona State University, Tempe is also home to several other colleges and universities, including Rio Salado College, Southwest College of Naturopathic Medicine & Health Sciences, and Bryan University.
Crime Rate
According to the Tempe Police Department, the overall crime rate in Tempe decreased by 4.4% in 2020 compared to the previous year. The department has implemented several programs and initiatives aimed at reducing crime and improving community safety.
Visitors
According to the Tempe Tourism Office, most visitors to Tempe come from other parts of Arizona, as well as from California, Texas, and other neighboring states.
According to the Tempe Tourism Office, Tempe welcomed more than 2.6 million visitors in 2019. The city is a popular destination for leisure travelers, business travelers, and conference attendees.
Tourist Attractions
Tempe is home to a wide variety of attractions that draw visitors from all over the world. Some of the most popular include:
- Arizona State University: This large, public research university is known for its outstanding academics, world-class sports programs, and vibrant campus life.
- Tempe Town Lake: This man-made lake is a popular spot for boating, fishing, and other water-based activities. It is also surrounded by parks and trails that offer great views of the surrounding desert landscape.
- Mill Avenue: This bustling street in downtown Tempe is lined with shops, restaurants, and entertainment venues. It is a popular spot for nightlife and cultural events.
- Papago Park: This large, urban park is located just outside of Tempe and features hiking trails, picnic areas, and unique rock formations that are popular with photographers.
Peak Season
The peak season in Tempe is generally from January through April when the weather is mild and comfortable. This time of year is particularly popular with snowbirds, who come to escape the cold winters in other parts of the country. The city also sees a significant increase in visitors during the holiday season in November and December.
Conclusion
In conclusion, the short-term rental market in Tempe, AZ, is thriving, with high demand, steady income streams, and attractive investment opportunities.
With a growing supply of short-term rentals and a healthy real estate market, there has never been a better time to invest in the industry. As long as investors do their due diligence and carefully research the local market, there is no reason why they can’t succeed in the lucrative and exciting world of short-term rentals in Tempe.
