Rental Arbitrage in Phoenix, AZ
Allowed with a city permit. Every short-term rental needs a City of Phoenix permit ($250 for each permit, initial and renewal) and an Arizona TPT license. The city issues or denies a permit within 7 days of receiving all documents. The owner applies, or someone the owner authorizes in writing. An accessory dwelling unit can be a short-term rental only if the owner lives on site. Read the rules and sources.
- Average daily rate
- $242.10
- Occupancy
- 64%
- Annual revenue potential
- $45,600
How Much Rent Can a Unit Here Carry?
- Most rent that breaks even
- $4,137
- Rent that leaves a 20% margin
- $3,085
At the market's average rate and occupancy, a unit books about 19.5 nights and $5,262 a month. The ceiling assumes 3-night stays, an $85 cleaning fee against a $75 clean, a 3% platform fee and $480 a month for bills, insurance, supplies and software. Market averages include every listing size, so a one-bedroom usually earns less. Treat these as upper limits for a lease negotiation, not targets.
Only in limited areas. Renters can only operate in certain zones, or with a special approval. Confirm the exact property qualifies before you sign. See where.
Run the Numbers for Phoenix, AZ
Pre-filled with the market's rate and occupancy, and a rent at the 20% margin ceiling. Replace the rent with the real asking rent of the unit you're considering.
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The Phoenix, AZ Market
The Phoenix/Scottsdale AirDNA market averaged a $242.10 daily rate at 64% occupancy over the last 12 months, about 19.5 booked nights and $5,260 of booking income a month. Higher-priced Scottsdale listings lift that average, so check comparable listings in Phoenix itself.
Phoenix requires a $250 annual permit, an Arizona transaction privilege tax (TPT) license and notice to adjacent neighbors. The permit is applied for by the owner or someone the owner authorizes, so your landlord's written authorization is part of the paperwork.
What a Unit Can Earn
At the market averages, the break-even rent is about $4,140 and a 20% margin needs about $3,090. Phoenix-only comparables will usually support less than the combined market figure.
Startup Costs
At a $3,050 rent, expect roughly $14,500 before the first booking: a one-month deposit, the first month's rent, about $7,500 of furnishing and $900 of setup. Add a cushion of a few months of costs. Work it out properly with the startup cost calculator.
Risks to Weigh
- Figures cover the combined Phoenix/Scottsdale market
- Accessory dwelling units can't be used as short-term rentals
- Penalties for operating without a permit
Frequently Asked Questions
- Can a Tenant Get a Phoenix Short-Term Rental Permit?
- The application is made by the owner or someone the owner authorizes, so you'll need the landlord's written authorization.
- What Rent Can a Phoenix Unit Carry?
- At the combined Phoenix/Scottsdale market averages, the break-even rent is about $4,140 and a 20% margin needs about $3,080. Phoenix-only comparables usually support less.
- How Much Does an Average Phoenix Short-Term Rental Earn?
- AirDNA's Phoenix/Scottsdale market averaged a $242.10 daily rate at 64% occupancy over the last 12 months, with annual revenue of about $45,600. Higher-priced Scottsdale listings lift that average.
- What Does a Phoenix Permit Cost?
- $250 a year for the city permit, plus an Arizona transaction privilege tax (TPT) license and notice to adjacent neighbors by certified mail.
- Can I Rent Out an ADU in Phoenix?
- No. Accessory dwelling units can't be used as short-term rentals.