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What rental yields and holding costs should I expect for an investment property in Phoenix?

Short answer

Gross rental yields on Phoenix-area houses are in the mid single digits in most years, before costs. Budget for property tax at the rental class rate, landlord insurance, HOA dues, management of roughly eight to ten percent of rent plus leasing fees, maintenance with an air-conditioning reserve, and vacancy. Long-term residential rent is no longer subject to city sales tax; short-term rentals are taxed and must be registered.

Work the numbers from local data rather than national averages: the regional MLS publishes monthly statistics on sale prices and rents, and the Census gives median rents by city, which together show the ratio of annual rent to price for the areas you are considering [1] [2]. Yields are higher in the West Valley and outer suburbs and lower in Scottsdale and central Phoenix, where appreciation rather than cash flow has been the story.

Holding costs start with property tax: a rental is assessed as class four, which does not receive the owner-occupier credit, so expect it to be somewhat higher than the same home owner-occupied; the assessor’s parcel search shows the current bill [3]. Arizona requires residential rentals to be registered with the county assessor. Since 2025 cities may no longer levy transaction privilege tax on long-term residential rent, but short-term rentals remain taxable and must be licensed and registered with the city, where rules have tightened [4] [5].

Then insurance (a landlord policy, not a homeowner policy), HOA dues where applicable, management if you are abroad, repairs and the reserve for the air-conditioning that will eventually need replacing, and vacancy between tenants. Rental income is taxable in the US for residents and non-residents alike; non-resident owners either face withholding on gross rent or elect to be taxed on net income by filing a return [6].

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Sources

Official and institutional sources this answer is based on. The numbers in the text point here.

    1.
    • Officialarmls.com
      ARMLS — Arizona Regional Multiple Listing Service ↗

      The MLS used by Phoenix-area brokers: monthly market statistics (median price, inventory, days on market) and how listing data flows to public sites. Access to listings requires a licensed member.

      checked Sep 12, 2026

    2.
    • Officialcensus.gov
      U.S. Census Bureau — QuickFacts: Arizona ↗

      Official population, housing, income, education and business statistics for Arizona (and, via the same tool, for counties and cities), including median household income and median home value.

      checked Sep 12, 2026 · verify manually

    3.
    • Officialmcassessor.maricopa.gov
      Maricopa County Assessor ↗

      Parcel search with assessed values, property class and ownership history for any address in the county; the valuation side of the property-tax bill, plus rental-property registration.

      checked Sep 12, 2026

    4.
    • Officialazdor.gov
      Arizona Department of Revenue ↗

      State tax authority. Individual income tax, transaction privilege tax (Arizona's sales tax, "TPT"), property tax overview, forms, e-filing (AZTaxes) and residency rules for people who move into the state part-way through the year.

      checked Sep 12, 2026 · verify manually

    5.
    6.
    • Officialirs.gov
      Internal Revenue Service (IRS) ↗

      Federal taxes: individual and business filing, the substantial presence test and residency status for tax purposes, treaties, deadlines, payments and the international taxpayers section.

      checked Sep 12, 2026

Reviewed: October 7, 2026. General information with sources, not legal, tax or financial advice. Rules and fees change: check the linked sources and talk to a licensed professional about your own case.

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