Best Areas to Buy a Rental Property in Northern Arizona

Northern Arizona is a prime location for real estate investors looking to generate rental income. With its mix of tourism-driven short-term rentals and high demand for long-term housing, this region offers excellent opportunities for both types of investors. Here are some of the best areas to buy a rental property in Northern Arizona.

1. Flagstaff – High Demand for Long-Term and Short-Term Rentals

As a college town with Northern Arizona University (NAU) and a top outdoor recreation destination, Flagstaff consistently sees strong demand for rentals. Short-term rentals thrive due to tourists visiting for hiking, skiing at Arizona Snowbowl, and Grand Canyon access. Meanwhile, long-term rentals remain in demand for students, faculty, and professionals. With home values steadily appreciating, Flagstaff is a solid investment.

Investment Highlights:

High occupancy rates for both short- and long-term rentals
Year-round tourism and university-driven rental demand
Premium rental rates due to limited housing supply

2. Sedona – A Short-Term Rental Goldmine

Sedona is one of Arizona’s most sought-after destinations, attracting millions of visitors annually. Investors in Sedona benefit from high nightly rental rates on Airbnb and VRBO, especially for homes with stunning red rock views. However, zoning restrictions require careful planning before purchasing a property for short-term use.

Investment Highlights:

Strong short-term rental income potential
Luxury and unique properties command premium rates
Tourism-driven demand keeps occupancy rates high

3. Williams – Affordable Entry Point with Growth Potential

Williams, known as the Gateway to the Grand Canyon, is a fantastic choice for investors looking for affordable rental properties. Short-term rental demand is driven by tourists stopping on Route 66 and visiting the Grand Canyon Railway. The town’s small size keeps housing prices lower than Flagstaff or Sedona, making it an attractive investment with room for appreciation.

Investment Highlights:

Lower home prices with strong appreciation potential
High tourism traffic for short-term rentals
Less competition compared to Sedona and Flagstaff

4. Prescott – A Growing Market for Long-Term Rentals

Prescott attracts retirees, remote workers, and families looking for a quieter lifestyle. Its steady population growth and strong demand for rentals make it a great choice for investors focused on long-term leases. The city also has some short-term rental demand, though less than Sedona or Flagstaff.

Investment Highlights:

Increasing demand for long-term rentals due to population growth
Attractive to retirees and professionals
Moderate short-term rental opportunities

Final Thoughts: Where Should You Invest?

The best area for a rental property in Northern Arizona depends on your investment goals. If you’re looking for high short-term rental income, Sedona or Williams might be your best bet. If you prefer steady long-term rental demand, Flagstaff or Prescott offer strong opportunities. No matter your strategy, Northern Arizona remains a great region for real estate investment.

Thinking about buying a rental property? Let’s connect and explore your options!