By Kyle Gere, Realtor® | Bronson Real Estate | HomeSmart
The short answer stings a little. If you buy a median-priced Phoenix house today with a normal investor loan and rent it out, the math says you lose more than $1,000 a month.
That's not the end of the story, though. Below I walk through the real numbers line by line, using public data you can check yourself, and then show what has to change for a Phoenix rental to work.
The numbers we're using
Price: Phoenix REALTORS® reported a median single-family sales price of $485,000 in the city of Phoenix for September 2026, down 3.5% from $502,500 a year earlier.
Rate: Freddie Mac's weekly survey put the average 30-year fixed rate at 7.32% as of October 22. That survey covers owner-occupied loans with 20% down. Investor loans usually price higher, so I'm using 8%. Call your lender for your real number.
Rent: HUD's 2027 Fair Market Rent for a three-bedroom in the Phoenix-Mesa-Chandler metro is $2,287 a month. It includes utilities and it's a benchmark, not a promise. For context, Zillow's typical rent across the whole metro, apartments included, was $1,720 in September.
Running the deal
| Line item | Monthly |
|---|---|
| Rent (HUD 3BR benchmark) | $2,287 |
| Property taxes (about 0.65%) | $263 |
| Insurance | $125 |
| Vacancy (5%) | $114 |
| Repairs (8%) | $183 |
| Big-ticket items like the AC and roof (5%) | $114 |
| Property management (8%) | $183 |
| Net operating income | about $1,305 |
| Mortgage (P&I on $363,750 at 8%, 25% down) | $2,669 |
| Monthly cash flow | about -$1,364 |
11:54 AM
Even at the 7.32% average rate, the payment is about $2,499 and you're still at about negative $1,194 a month. Break-even rent would be about $4,131, and that isn't happening for a typical three-bedroom.
Here's the bigger problem. Even if you paid all cash, that income works out to about a 3.2% cap rate. That's lower than the cost of borrowing. In commercial real estate we call this negative leverage: every dollar you borrow at 8% to buy a 3.2% return makes the deal worse.
Why this isn't a "never buy" post
The easy deal, where you buy anything and it cash flows, is gone. But a few things are working in your favor:
Renter demand is strong. Zillow's renter demand index for Phoenix was up 43% year over year in September.
Buyers have leverage again. Pending sales fell 37% in September and supply is up to 3.9 months. Phoenix REALTORS® noted that sellers are offering concessions to buy down rates.
Five ways to make the numbers work
Negotiate hard and use concessions to buy down the rate. In my example, 10% off the price plus a rate near 7% cuts the loss from about $1,364 a month to about $847.
Put more money down. At 50% down, the same house loses about $475 a month. Just remember that cash is now tied up earning a low return.
House hack. Live in part of it and rent out the rest. Owner-occupied loans come with lower rates and smaller down payments.
Add value. Buy the dated house nobody wants, fix it, and push the rent. Equity you create beats equity you hope for.
Look past single family. Small multifamily and small commercial properties are valued on income, so you can underwrite them on real numbers instead of hoping for appreciation.
Run your own numbers before you fall in love
Your price, rate, rent, and expenses will be different from mine. I use DealCheck to analyze rentals, flips, and multifamily deals in a couple of minutes. It shows cash flow, cap rate, and cash-on-cash return, and you can swap in your own assumptions and compare properties side by side.
👉 Try DealCheck and run this deal yourself
Want a second set of eyes on a deal?
If you're looking at a Phoenix rental, small multifamily, or commercial property right now, call or text me at (602) 695-5260. I'll help you check the real numbers before you commit.
Kyle Bronson Gere, Realtor® | Bronson Real Estate | HomeSmart
Disclosure: I may earn a commission if you sign up for a paid DealCheck plan through my link, at no extra cost to you. The figures above are an illustration based on public sources and my own assumptions. They aren't a guarantee of results or financial advice. Verify taxes, insurance, rents, and loan terms for your specific property.
Real estate brokerage services are provided by HomeSmart LLC. This content is for educational purposes only. Equal Housing Opportunity.
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