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Arizona’s rental market is heating up in 2025, and savvy landlords are asking: Which cities offer the best rental investments? At Rosenbaum Realty Group, we’ve crunched the numbers and tapped our local expertise to compare three standout contenders—Phoenix, Tucson, and Gilbert. Whether you’re chasing high rental yields, steady property appreciation, or low vacancy rates, this guide breaks down the pros, cons, and future growth potential of each city. Let’s find the perfect spot for your next Arizona rental property investment.
Phoenix: The Urban Powerhouse
Phoenix, Arizona’s bustling capital, remains a top pick for rental investments in 2025. With over 5 million residents in its metro area and a population growth of 49,240 between 2022 and 2023, demand for rentals is strong.
Rental Yield: Phoenix boasts a solid 4.58% median rental yield, with one-bedroom rents averaging $1,371 monthly. While new apartment supply (7,000+ units by late 2024) has softened yields slightly, well-located properties still cash flow nicely.
Property Appreciation: Home values dipped slightly in 2024 but are rebounding, with a projected 2.3% rise in 2025. Zillow’s January 2025 data shows a median home price of $450,000—affordable compared to coastal hubs.
Vacancy Rates: At 7.5%, vacancies are higher than the national 5.8%, thanks to new construction. However, units with amenities like in-unit laundry or proximity to job centers lease fast.
Pros: Diverse economy (tech, healthcare, manufacturing), landlord-friendly laws, and a growing tenant pool. Cons: Rising competition and moderate appreciation temper blockbuster gains.
Future Growth: With 60,833 new units slated by 2028, Phoenix’s rental market will stay competitive—but its job growth keeps it a safe bet for long-term cash flow.
Phoenix is ideal for landlords seeking steady income in a vibrant urban market. Check your Owner’s Portal for Phoenix-specific stats on your properties!
Tucson: The Affordable Gem
Tucson, Arizona’s second-largest city, offers a compelling mix of affordability and rental demand, driven by the University of Arizona and a thriving tourism scene.
Rental Yield: At $1,600 average rent in January 2025 (Zillow), Tucson’s rental market delivers strong cash flows. Its 4.8% cap rate for short-term rentals outshines many peers, making it a dual-threat for long- and short-term strategies.
Property Appreciation: Median home prices hit $311,868 in 2022 and are climbing 24% annually. At roughly $350,000 now, Tucson remains an accessible entry point with solid upside.
Vacancy Rates: Tighter than Phoenix at around 6%, thanks to steady demand from students (64,000 at UA) and retirees. Short-term rentals near Saguaro National Park also keep occupancy high.
Pros: Lower buy-in costs, diverse tenant base (students, tourists, seniors), and a growing arts scene.
Cons: Slower job growth and less urban buzz than Phoenix limit explosive appreciation.
Future Growth: Population and job gains signal steady expansion, with tourism fueling short-term rental potential.
Tucson shines for budget-conscious investors eyeing high yields and long-term appreciation. It’s a sleeper hit in Arizona’s rental investment landscape.
Gilbert: The Suburban Star
Gilbert, a fast-growing East Valley suburb, is Arizona’s top city to watch in 2025, per RentCafe’s report, thanks to its family-friendly vibe and tight rental market.
Rental Yield: With two-bedroom rents around $1,800-$2,000, Gilbert’s yields hover near 4.5%. Listings dropped 41% last year—the second-highest nationwide—driving premium rents.
Property Appreciation: Home values soared 74.51% over five years in nearby Tolleson (a comparable market), and Gilbert’s median price of $545,000 reflects strong demand. Expect 4-5% annual growth in 2025.
Vacancy Rates: Among the state’s lowest at 5-6%, fueled by top schools and a population boom. Gilbert ranked 3rd nationally for rental tightness in 2025.
Pros: Low vacancies, high-quality tenants, and proximity to Phoenix’s job hubs.
Cons: Higher entry costs ($500,000+) and limited short-term rental appeal.
Future Growth: Population growth and planned developments signal big potential, though supply constraints may push prices higher.
Gilbert is perfect for landlords targeting long-term tenants willing to pay for suburban perks. It’s a premium play with staying power.
Which City Wins for Your Rental Investment?
Best for Cash Flow: Tucson’s lower home prices and high rental yields make it a cash-flow king, especially for student housing or vacation rentals.
Best for Appreciation: Gilbert’s rapid growth and tight market promise strong equity gains—ideal if you’re in for the long haul.
Best All-Rounder: Phoenix balances yield, appreciation, and scale, suiting investors who want flexibility and stability.
Why Trust Rosenbaum Realty Group?
At Rosenbaum Realty Group, we’re not just crunching numbers—we’re on the ground, managing properties across Phoenix, Tucson, and Gilbert. Our team tracks vacancy rates, optimizes rents, and fills units fast with pre-qualified tenants. In 2024, our clients saw an 82% lease renewal rate, saving thousands on turnover costs. Ready to invest?
Invest Smart in Arizona’s Rental Boom
Arizona rental investments in 2025 hinge on location—and Phoenix, Tucson, and Gilbert each bring something unique to the table. Whether you prioritize cash flow, appreciation, or low vacancies, there’s a city for you. Don’t guess—partner with Rosenbaum Realty Group to turn data into dollars. Let’s find your next profitable property today!
