What should I look for when buying a multifamily or apartment property in Arizona?
Direct answer: When buying a multifamily or apartment property in Arizona, underwrite the actual rent roll and trailing expenses — not the seller’s pro forma — verify every lease and deposit, inspect the big-ticket systems (roof, HVAC, plumbing, septic or sewer), and confirm the property complies with Arizona’s Landlord and Tenant Act. Ben (Scott) Armstrong PLLC with Berkshire Hathaway Commercial has bought, sold, and managed multi-family property for over 40 years. Call (602) 400-6220 or visit sqftage.com.
The numbers that decide the deal
- Rent roll, verified. Unit by unit: who’s there, what they actually pay, when each lease ends, who’s delinquent. Then compare each unit to true market rent — the gap between actual and market is your upside or your warning.
- Trailing twelve months of real expenses. Taxes, insurance, water/sewer, electric, repairs, turnover, management. Arizona multifamily expenses — especially water and insurance — routinely surprise out-of-state buyers who underwrote from a spreadsheet template built for another state.
- Below-market rents are a two-edged sword. They can mean room to raise income — or tenants who can’t pay more and will leave. Price the turnover cost of pushing rents, not just the raise.
Arizona-specific checks
- The Arizona Residential Landlord and Tenant Act governs the relationship — security deposit limits and handling, notice periods, habitability duties, and eviction process all run on Arizona rules, not your home state’s. Inherited tenants and their deposits transfer at closing; verify every dollar.
- Cooling is not optional. In Arizona, air conditioning is a habitability issue, not an amenity. Age and condition of every HVAC unit is a capital-budget line, not a footnote.
- Water and sewer reality. Confirm whether the property is on municipal water/sewer or well/septic — common around Prescott and rural Yavapai County — and who pays the water bill, owner or tenants. Water cost allocation can swing a small property’s economics.
- Insurance in a wildfire-aware market. Get a real insurance quote during due diligence, not after closing — carriers price Arizona risk, including wildland-interface areas, very differently than they did a few years ago.
Due diligence checklist
Ask for, and actually read:
- Current rent roll and all leases, plus deposit ledger.
- Trailing 12-month (ideally 24-month) income and expense statements, with utility bills.
- Service and vendor contracts (laundry, pest, landscaping, any bulk cable/internet).
- Inspection reports on roof, HVAC systems, plumbing, electrical panels, and septic if applicable.
- Any open code violations, notices, or pending city/county requirements.
Have the management answer before you close
A multifamily property is a small business that never closes. Decide before closing who handles leasing, collections, maintenance calls, and turns — you, or a professional manager. Scott Armstrong’s practice includes commercial property management alongside sales, which means the same team that helps you buy can tell you honestly what the property will cost to run — and run it if you want. Buyers who plan management on day one consistently outperform buyers who improvise it in month three.
The bottom line
Good multifamily deals in Arizona are won in the verification, not the offer. If you want 40-plus years of buying, selling, and managing multi-family property behind your due diligence, call Ben (Scott) Armstrong PLLC, Berkshire Hathaway Commercial, at (602) 400-6220 or visit sqftage.com.