How to Generate Cash Flow in Phoenix with Single-Family Homes: A Guide for International Investors
Phoenix, Arizona, has emerged as one of the most attractive markets for single-family rental investments in the U.S. With a growing population, strong job market, and relatively affordable home prices compared to coastal cities, Phoenix offers international investors a prime opportunity to build long-term cash flow. Here’s what you need to know.
Phoenix’s rental market benefits from steady demand due to its status as a major Sun Belt destination. The city’s population growth, driven by domestic migration and a business-friendly environment, supports consistent occupancy rates for single-family rentals. Investors can expect stable returns, particularly in suburbs with good schools and employment hubs.
Key factors make Phoenix ideal for cash flow. First, home prices remain lower than in many competitive U.S. markets, allowing for favorable entry points. Second, Arizona’s landlord-friendly laws provide investors with strong protections, including relatively quick eviction processes and minimal rent control restrictions. Third, property taxes are reasonable, enhancing net returns.
Location selection is critical. Areas like Gilbert, Chandler, and Scottsdale offer strong rental demand from families, while emerging neighborhoods in the West Valley may provide higher appreciation potential. Proximity to major employers, such as Intel, TSMC, and healthcare systems, ensures tenant demand. Investors should prioritize properties near good schools, as these attract long-term tenants.
Financing options for foreign buyers vary. Cash purchases are simplest, but some U.S. banks offer mortgages to international investors with significant down payments (typically 30-40%). Portfolio lenders and private financing may also be options, though rates are higher. A strong U.S. credit history helps but isn’t always required.
Tax considerations are important for non-resident owners. Rental income is subject to U.S. taxation, and FIRPTA (Foreign Investment in Real Property Tax Act) applies upon sale. However, tax treaties between the U.S. and many countries may reduce withholding rates. Consulting a cross-border tax specialist is essential to optimize returns.
Property management is key for remote investors. Reputable local management companies handle tenant screening, rent collection, and maintenance, typically charging 8-10% of monthly rent. Self-managing from abroad is impractical due to time zones and legal complexities.
Exit strategies should be planned upfront. Phoenix’s market has shown steady appreciation, but holding for at least 5-7 years is advisable to ride out cycles. A 1031 exchange can defer capital gains taxes when reinvesting in another U.S. property.
Disclosures and Disclaimers
This article is for informational purposes only and does not constitute financial, legal, or tax advice. Real estate investments carry risks, and market conditions may change.
The author is a licensed real estate agent in Arizona. International investors should consult local legal and tax professionals in their home country and the U.S. before making investment decisions.
Past performance does not guarantee future results. Rental income and property values are not guaranteed. Financing terms are subject to lender approval and market conditions.
For personalized assistance with Phoenix real estate investments, consult a licensed professional familiar with international transactions.
Orlando Castillo, MyHomeGroup
Arizona Licensed Realtor
August/ 2025