Canadians, Overseas and U.S. Investors Realize this is a Great Time to Invest in Las Vegas!
By Bruce Smith
Canadians, Overseas, and U.S. investors realize this is a great time, if not the best time ever to invest in Las Vegas. Lately, Canadian media has been expounding on the virtues, values and riches to be found in the Las Vegas real estate market. Housing prices are down about 60% in Las Vegas from the peak of 2006 while rents remain marginally steady. Las Vegas is about the most attractive place in the U.S. for an investor. Case Schiller Home Price Indices released information Sept 27th that Las Vegas housing prices are still continuing to bottom out. The decline is marginal and an improvement from where the decline had been. Prices were down 0.2 percent in July from the previous month and prices are now 59.3 percent below the peak in August 2006.
When purchasing an investment property, the market you are in determines the best type of investment for your money. Las Vegas has a nice supply of entry-level homes comprising three bedrooms, two baths and attached two car garages, within the $70,000 to $90,000 price range. These typically rent for $900 to $950 a month. These are the optimal investment properties for your buck. With these investment properties you can pick up built in equity. Your cash flow on these rentals will be in the range of 9 to 12 percent or higher. Many were built at the peak of the market four or five years ago. These homes are newer and energy efficient, often built to the energy star rating standard.
Larger Las Vegas homes above $100,000 are still feeling the pain. These homes are marginally creeping up, as they are the investment properties investors typically buy. Larger homes in the range of $100,000 to $150,000 will more than likely lose another 10 to 15 percent of their value. That loss in value can be attributed to the foreclosure inventory the banks are sitting on that has not been released. In the Las Vegas market if you pay $150,000 for a larger home rather than $70,000 for an entry level home you are not going to get twice the rent. Investors considering investing in a home in Las Vegas really should consider setting his sights on entry-level models for optimum value. Investor flippers purchasing these entry level homes or larger homes at distressed prices need to get in, fix and flip quickly. Investor landlords purchasing these larger more expensive single family homes need to plan on holding for some time because it is going to take longer for these homes to rebound. Investors considering purchasing Las Vegas single-family homes or condos are better off purchasing single family homes. Condo values have been hit harder than single family home values in Las Vegas. The rebound for Condos will be longer than for single family homes. An investor considering investing in a home in Las Vegas should consider setting his sights on entry-level models for optimum value.
The foreclosure crises has flooded the market with reasonably, affordable beautiful homes. Las Vegas home prices are the lowest they have been for 20 years. Many properties sell for less than it cost to build them. Once again it is a tremendous time to buy affordable housing in Las Vegas.
REASONS TO INVESTOR BUY IN LAS VEGAS:
Las Vegas rents are relatively high; purchases provide a good rate of return for investors.
Thousands of workers employed in the tourist and gaming industries need a place to live.
Approximately, half the workforce of Las Vegas rents. A tenant can be evicted in 10 to 180 days; for nonpayment of rent in 30 days or less.
Around 10,000 baby boomers in the U.S. reach 65 year of age each day. Many move to Las Vegas due to dry, sunny days, mild winters and warm weather.
Nevada has no state income tax.
Las Vegas offers a great quality of life with beautiful weather year round and amazing scenery.
***It is important for Canadians and overseas buyers to be fully aware of the tax laws on both sides of the border before purchasing.
***It is important for all investors to seek advice on taxes from a qualified Real Estate accountant or CPA. It is important that all investors seek legal advice from a qualified Real Estate Attorney concerning any Real Estate transaction.
***Values and rate of return are unique to every purchase and should be carefully calculated and considered for each transaction by the investor.
Source: The Windsor Star, Montreal Gazette, Calgary Hearld, Case Schiller