Seattle, WA · Member since 2010 · 18 posts · 0 votes
I found out that the prices for properties in Las Vegas right now are really low. And I was wondering if people were picking them up. And if not, why are people not buying properties in Las Vegas? Is there anything I should know about Las Vegas?
Like any city, Vegas is not crime free. However, also like any city there are good and bad areas.
There is definitely gang activity in warzone areas. To imply that all of las vegas is gang infested is ludicrous.
If you mean that it doesn't rain every day, there are no tornados, hurricanes, freezing temperatures - yeah the weather is the pits. However, I happen to like 300+ days of sunshine and I'm proud of the fact that I don't own a snow shovel. It gets a bit toasty in July and August. But in 1902 there was a really nifty invention called air conditioning.
That's interesting - I don't gamble and I leave the shopping to my wife. Somehow I have no trouble finding things to do.
I left the northeast in 2003 and there is no way I would remotely consider moving back. Is Vegas perfect? Not by a long shot, but it's better than most places I've seen.
There are many reasons why Vegas may not be the best area to invest in right now. But the listed ones would indicate that you have never ventured beyond the tourist area. That happens to be an area that the majority of locals avoid like the plague.
Are you looking to buy & hold, buy & flip, rehab & flip? It does make a difference. A lot of realtors are complaining about a lack of invetory on the low end at the moment. Normally that would be a signal that prices would be poised to rise. However, if there is a new wave of foreclosures and additional inventory there wouldn't be as much upward pressure on prices.
I picked up a Vegas sfr last october for $42k that I'm currently renting for $750 a month .... same house now sells for $65k+. As Richard mentioned, low-end home inventory levels remain very low creating quite the feeding frenzy for all the cash investors waiting to scoop them up for their great cashflow. Can be a frustrating process to land one as I learned when getting outbid on 10+ other properties before securing one.
The best time to invest in property is that one when prices are lowest and this is the best time to invest in Las Vegas real estate property if one is eager to invest for long term but investing for short period of time would not be a wise decision.
The best time to invest in property is that one when prices are lowest
Ahh, if only it were so simple. In many places prices looked like they were the lowest in 2008 and then lowest again in 2009 and now lowest again in 2010. I have been buying the "lowest" prices in Detroit over and over for a very long time know. (luckily I am a flipper so I also sell at low prices) You only know they are the lowest after the fact...when they are not the lowest anymore. It is called trying to catch a falling knife. It can be very profitable or very dangerous.
BTW, I am not saying LV is the same as Detroit. I read somewhere one-time that the gaming industry is recession-proof.
I would be curious to see what the vacancy rate is for the type of properties that you are looking to buy? What is the supply like at that pricepoint? Are you looking to buy and hold, or fix and flip? Yes, the prices are low, but as Eric said, they were also "low" last year.
I know that those casinos have been having huge problems as they borrowed gobs of money to build these things and cannot refi them now, since they aren't worth the amount borrowed. Not sure what that does to the local rental and low end purchase market, but that is what I would be looking at. If you have a long term horizon and buy right, I imagine you're putting yourself in a pretty good spot (long term).
One reason not to invest in Las Vegas is that it is one of the most volatile and severely hit markets in the country. There is a lot of opportunity in Flroida, Phoenix, Vegas, etc. It is hard to make such a sweeping generalization. but thos emarkets ar eth emost volatile and could stand to drop another 20% in a "double dip".
Volatility = risk
And as it works, generally high risk reaps higher rewards, but you dont want to take unfounded risks. The question then, is how risk averse are you?
One reason not to invest in Las Vegas is that it is one of the most volatile and severely hit markets in the country.
I don't have a huge stomach for risk. But would now be, does the property value correlate with rents and vacancies? The things I would be concerned with after I buy is the rent rate and vacancies increasing.
The best time to invest in property is that one when prices are lowest
Ahh, if only it were so simple. In many places prices looked like they were the lowest in 2008 and then lowest again in 2009 and now lowest again in 2010. I have been buying the "lowest" prices in Detroit over and over for a very long time know. (luckily I am a flipper so I also sell at low prices) You only know they are the lowest after the fact...when they are not the lowest anymore. It is called trying to catch a falling knife. It can be very profitable or very dangerous.
BTW, I am not saying LV is the same as Detroit. I read somewhere one-time that the gaming industry is recession-proof.
I meant the same when prices are at the bottom and when prices start rising slightly then it is the best time to invest and there are several examples that many people got millionaires just due to timely investments.
One reason not to invest in Las Vegas is that it is one of the most volatile and severely hit markets in the country.
I don't have a huge stomach for risk. But would now be, does the property value correlate with rents and vacancies? The things I would be concerned with after I buy is the rent rate and vacancies increasing.
Ray, vacanies are highly correlated to the demographics, in particular jobs and population growth, in the area. The housing market is generally a good indiciator of this, so yes it is probably safe to assume that, to an extent, vacanies will be rising in places such as Las Vegas. Also, keep in mind though, if you can get a steal of a deal in Vegas and make good cash flow by renting a bit under market rents then you could succeed in doing so, with minimal vacancies. But, you must consider that if you are relatively risk averse there are plenty of cities/markets out there that are growing/thriving and pose less of a risk to your investment. If you don't have the stomach for risk, then choose a growing market with high employment and find a good deal there.
But once again you have to remember that risk and reward are correlated. Do your due diligence and take a calculated risk your comfortable with - whether in a higher risk/higher reward market or somewhere more safe and steady.
I've read a lot of hype surrounding Vegas and the Phoenix areas. A lot of investors are flocking to these areas and competition is supposedly pretty high for great deals.
Like some have mentioned though, there is a possibility for increasing vacancies. With all the new investors there potentially renting out properties, there's going to be a lot of competition for renters as well. You may end up in a price battle and see your cashflow go out the window. Additionally Vegas is one of the national leaders with regards to unemployment at about 15%. This will drive people out of the area and those who stay are going to want lower rents.
I am also considering these markets as a newbie investor because of the lower cost of entry. However, I'm still thinking about it since I'm also a bit risk adverse not having any experience.
According to this Las Vegas 8/27/10 market report, sales have slowed some but rental market strong for investors...
"As you can see, we don’t even have 2 months inventory of rental homes despite the problems apartment management companies report. Investors wanted!"
That's a better topic for a separate thread, Victor. The short answer is the work is the same as for a larger loan but that the profit is smaller. Lenders and brokers just don't want to do all that work for the small profits from a small loan.
It can often be difficult to get a conventional loan of 50K or less. Jimmy, might be able to answer your question better, I just know that typically banks don't want to do a long term loan in this range. It probably has something to do with the cost of servicing the loan compared to the income made on the loan.
Smaller loans are available though in other markets. Private lenders, signature loan, etc.
Nothing to do unless your hobbies are shopping and gambling.
I wouldn't call 320+ days of sunshine a year horrible weather - yes, the summer heat is 'horrible' but many enjoy golfing in december .... rather than being buried in snow or drenched in rain.
And yes, Vegas is home to world class amenities when it comes to restaurants, entertainment & shopping but many don't realize it offers lots of outdoor activies such as skiing, camping, fishing, hiking & boating ... Mt Charleston, Lake Mead, Red Rock all within 30 min.
A friend of mine inherited a condo in Vegas. Over several months, the lawyer for the estate has not had any luck trying to sell it so far. It's in a 55+ community, which doesn't help, but still.
I would be concerned about a glut of properties for a small pool of renters, if I was in LV.
Like any city, Vegas is not crime free. However, also like any city there are good and bad areas.
There is definitely gang activity in warzone areas. To imply that all of las vegas is gang infested is ludicrous.
If you mean that it doesn't rain every day, there are no tornados, hurricanes, freezing temperatures - yeah the weather is the pits. However, I happen to like 300+ days of sunshine and I'm proud of the fact that I don't own a snow shovel. It gets a bit toasty in July and August. But in 1902 there was a really nifty invention called air conditioning.
That's interesting - I don't gamble and I leave the shopping to my wife. Somehow I have no trouble finding things to do.
I left the northeast in 2003 and there is no way I would remotely consider moving back. Is Vegas perfect? Not by a long shot, but it's better than most places I've seen.
There are many reasons why Vegas may not be the best area to invest in right now. But the listed ones would indicate that you have never ventured beyond the tourist area. That happens to be an area that the majority of locals avoid like the plague.
Never been to Vegas, but I was in Phx for a work project and loved it there, especially the sunsets. Phoenix sunsets are even better Fla sunsets. But I guess the heat & lack of tree canopy is too alien for some people.
I just bought a condo for $11,900. I am renovating it right now and hope to rent it for 650. I also found out that the association fees are 250 a month. But should still have some good cash flow. Are there any other deals out there available now?