10 Reasons We Love Buying Land in Arizona

Arizona contains over 72 million acres of land, much of it encompassing stunning desert and mountain terrain under big open skies that capture the imagination. The state houses 294,207 acres of lakes and 15,154 miles of rivers winding through the rugged natural landscape according to the Arizona State Land Department. With so much natural beauty and outdoor recreation at their fingertips, it’s no wonder that hundreds of thousands call the Grand Canyon State home. In fact, Arizona welcomed nearly 200,000 new residents in 2021 alone as people flock to the state for the friendly lifestyle and business opportunities. For real estate investors and developers, all of that growth drives demand for land across Arizona in cities expanding outward and remote acreages ready for off-grid living.

From the stunning vistas of the Grand Canyon to the saguaro-dotted desert landscapes, Arizona's natural beauty provides a compelling backdrop for land investment. But this sunny Southwestern state has so much more going for it than just good looks. Let's dive into the top 10 reasons savvy investors are snapping up Arizona land parcels while they remain affordable.

Reasons to Buy Land in Arizona

1. Arizona's Economy is Strong and Expanding

Robust job growth and economic expansion make Arizona a very attractive place to buy land right now. Major tech companies like Intel, Honeywell Aerospace, Uber and Amazon have large facilities in Arizona, bringing high-paying skilled jobs in engineering, software development, logistics and more. Small business is also booming here. Arizona has one of the highest rates of entrepreneurship in America, with Phoenix ranking #2 on Forbes' Best Cities for Startups list.

Beyond the tech sector, Arizona has a diverse and thriving economic base. Tourism centered around iconic destinations like the Grand Canyon, Sedona's red rock country and Saguaro National Park remains a huge industry. Healthcare and biosciences are major players, especially in metro Phoenix. Construction and real estate have seen phenomenal growth driven by the state's ascendant population. With low taxes, reasonable regulations and affordable cost of living, Arizona fosters innovation and attracts new residents.

For land investors, Arizona's stellar job growth and economic prospects signal strong demand for commercial and residential developments in the future. Buying land in growth corridors today means huge appreciation as local economies continue expanding.

2. Arizona is a Magnet for Tourism and Retirees

In addition to creating local jobs, the millions of tourists and retirees flocking to Arizona each year make certain areas highly appealing for land investment. According to the Arizona Office of Tourism, a record 45 million people visited the state in 2021. World-famous attractions like the Grand Canyon as well as scenic destinations like Sedona and Bisbee will continue pulling in more tourists every year. Investing in land near these hotspots offers opportunities for building hotels, shops, restaurants, tours and other businesses catering to visitors.

Arizona is also America's #2 most popular retirement relocation destination after Florida due to the warm, dry climate and abundance of recreational amenities. In fact, around 130,000 new retirees settle in Arizona every year. Retiree-centric communities have sprung up across the state, especially in sunny metro Phoenix and around Tucson. Land in these "silver cities" will remain in high demand to support senior housing, healthcare facilities, retail and entertainment for retired snowbirds.

3. Housing Demand Greatly Exceeds Supply

Fueled by surging job growth and inbound migration, Arizona's population grew by over 16% from 2010 to 2020. Housing construction simply hasn't kept pace with demand, leading to extremely tight inventories. There is currently less than a one month supply of homes for sale statewide. Metro Phoenix alone needs over 100,000 additional homes just to satisfy pent-up buyer demand.

With more people moving here seeking affordable housing every year, residential land values can only keep rising. Areas like Buckeye, Goodyear and Maricopa around Phoenix present solid opportunities for developers looking to buy tracts for new neighborhood construction. Tucson, Prescott, Mesa, Gilbert and other high-growth cities also offer chances to profit from the supply/demand imbalance in Arizona housing.

4. Arizona's Climate and Scenery Make Outdoor Recreation a Year-Round Industry

In a state blessed with natural beauty and over 300 sunny days a year, recreational tourism represents a massive economic driver. Iconic public lands like the Grand Canyon, Lake Powell, Saguaro National Park and Petrified Forest National Park see millions of visitors annually. Arizona also boasts popular skiing destinations like Flagstaff and statewide trail systems for hiking, mountain biking, ATV riding and more.

Developing recreational land into campgrounds, ranches, golf courses, hunting reserves or off-roading parks can pay off hugely. Arizonans love escaping to the outdoors year-round while visitors flock to enjoy the state's rugged yet accessible public lands. With demand rising, recreational properties are likely to deliver strong returns on investment.

5. Infrastructure Investments Make Development Feasible

Back in territorial days, remote Arizona was rugged cowboy country. But decades of infrastructure investment have opened the state up for business and residential growth. Interstate highway systems now connect all major cities. Airports like Phoenix Sky Harbor offer direct flights across the country and abroad. Electricity, water, sewer and broadband reach even far-flung communities.

This existing infrastructure framework makes development projects much more viable compared to building from scratch in remote areas. Arizona's highways and utilities can support well-planned expansions for both commercial and residential uses. For land investors, infrastructure means reduced costs and quicker time to profitability.

6. Arizona Offers a Business-Friendly Environment

In addition to infrastructure, Arizona's pro-business tax policies and minimal red tape incentivize company growth and real estate development. Commercial property taxes are reasonable compared to other states. Arizona also has low corporate income taxes, no inventory taxes, and Right-to-Work employment laws. Streamlined regulatory processes help businesses get up and running smoothly.

This business-friendly climate has helped attract big employers like Intel and Amazon. Small businesses and entrepreneurs also thrive here. For companies priced out of California, Arizona offers lower costs and fewer hassles. As more firms move operations to the state, demand rises for new offices, warehouses and manufacturing plants. Commercial land values will follow suit.

7. Water Resources Support Sustainable Growth

A common concern for desert states is water scarcity. But prudent management allows Arizona to support population growth without severe supply constraints. The Colorado River provides a substantial portion through allotments like the Central Arizona Project. Other important sources include in-state rivers, underground aquifers and conserved water supplies. Like any Southwest state, Arizona must plan carefully to balance residential demand with agriculture and business needs. But the state's diverse water portfolio can sustain development in growth areas when managed appropriately.

For land buyers, ample water resources provide confidence that future property uses won't be curtailed. While any parcel may require securing water rights, Arizona's supply framework doesn't pose major limits on development potential for most regions.

8. Arizona's Innovative Tech Sector Keeps Expanding

Silicon Desert no more, Phoenix has emerged as a major tech hub. Homegrown success stories like web hosting giant GoDaddy and software firm Infusionsoft paved the way. Today, Phoenix boasts over 180,000 high-paying tech jobs at companies like Uber, Google, Intel, General Motors and many more. The metro is now second only to Silicon Valley for tech talent concentration.

Technology industries are growing across Arizona, including biosciences in Tucson and Flagstaff. As innovation companies large and small flock here for the educated workforce, lower costs and sunny lifestyle perks, demand for office space and housing will continue rising. Savvy investors should look to buy land in established and emerging tech hotspots like metro Phoenix.

9. Current Land Values Remain Reasonable for Fast-Growing Areas

Considering Arizona's tremendous growth prospects, land prices remain relatively affordable compared to other Western states like California and Colorado. Strong market fundamentals clearly indicate land values will continue rising over the long term. Purchasing property in high-potential areas today provides an opportunity to secure a foothold before prices escalate further.

While some regions have already seen substantial valuation increases, about 90% of Arizona's total land area remains undeveloped. With intelligent selection, investors can still find well-located parcels at reasonable cost basis compared to future value. Acting sooner than later is key to maximizing returns on Arizona land deals.

10. Arizona Will Keep Attracting People and Business

What really makes Arizona a smart choice for land investors? People and jobs. The state's sunny climate, natural wonders and recreational opportunities make it immensely attractive for new residents and retirees. Low taxes and regulations coupled with affordable cost of living will keep enticing companies. A great recipe for long-term growth and prosperity.

As Arizona's population expands over the coming decades, demand can only rise for housing, offices, retail and infrastructure to support the influx. Buying strategically located land today allows developers and investors to profit immensely from this powerful demographic and economic growth trajectory. For both beautiful scenery and financial returns, Arizona is hard to beat.

Final Thoughts

In summary, tremendous upside remains for opportunistic land buyers in Arizona. The state provides the right ingredients for continued prosperity: a stunning natural landscape, sunny weather, low costs for business and families, a talent pipeline via quality universities, and a welcoming business climate. As the Grand Canyon State keeps attracting new residents and companies, savvy investors should move now to purchase promising parcels and hold for long-term equity gains.

Frequently Asked Questions (FAQs)

What types of land are the best investments in Arizona?

For long-term appreciation potential, residential land in high-growth areas around cities like Phoenix and Tucson is a great bet. As more people move to Arizona, demand for housing will continue rising. Commercial land along highways or in business parks can also pay off as companies expand in the state. If looking for cash flow quickly, recreational land near tourist spots like Sedona or the Grand Canyon allows building amenities like campgrounds, hotels and restaurants.

Does Arizona have enough water resources to support development?

Yes, Arizona has diverse water sources including the Colorado River, groundwater, conserved supplies and in-state rivers. The state must continue long-term planning to balance residential, agricultural and commercial needs. But with prudent management, water availability doesn't have to slow development, especially in urban growth corridors. Land buyers should still research water rights for any parcel.

How expensive is land in Arizona currently?

Land prices vary greatly depending on location and amenities. In metro Phoenix, an acre of vacant residential land can cost $10,000 to over $1 million. In smaller towns and rural areas, prices drop below $5,000 per acre. Recreational land usually falls somewhere in between. Overall Arizona land remains affordable compared to other Western states, but prices in high-demand areas are rising quickly.

Does Arizona tax land or property?

Arizona does have property taxes levied by each county. Rates range from 0.67% to just over 2% of assessed value. Commercial property and vacant land have lower property tax rates compared to residential. Arizona also has no personal property tax on things like aircraft, inventory, and most equipment. Overall the tax burden is low compared to many other states.

Is financing available for buying land in Arizona?

Yes, traditional mortgages and land loans are available with about 20% down at competitive rates. Financing can run 15-30 years for land mortgages. Government-backed land loans offer low down payments for starting a farm or ranch. Hard money loans are an option for quick financing if you have collateral. And some sellers may owner-finance land purchases if they get a favorable fixed return through the deal.

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