Las Vegas Renters?

Question

How's the renting situation in Vegas? Is it really hard finding people ot rent out your condo or house in Vegas?

Anyone have any insights to this?

Bernadette C. · Answer

Hi Rehab,

Thanks for your prompt reply. Thanks so much for the infomation. If it's not to much trouble I would love to have a name of an attorney. If you have a management company that you could reccommend that would be awsome to. Would love to just sell and cash out on the properties so we can reinvest and take advantage of the deals, but in the mean time the L/O is worth trying.

Greatful for the infomation,

Bernie

Account Closed · Answer

You will need to run the numbers. A broad brush statement is you will not find positive cash flow without a great deal of cash tied up (equity). Too many people wanting to live there as owner occupants.

There choices.

1. Put a lot of cash into a deal that you expect to hold as a rental. Maybe cash you earned doing short term deals so profits that are being reinvested.

2. Focus on multi-family property that has little to no value other than the cash flow. 5 unit or larger multi-family commercial property.

3. Invest out of your area (away from the coasts). Maybe close but in an area that has a higher crime rate. Or further away in an area that has seen some problems in terms of employment. House prices are the lowest and rents are the highest when many people do not want to live there. Some of the best cities for rental income in the US are communities where the population peaked 20 or more years ago. Buffalo NY, Dayton OH and other places from the Canadian boarder down to Mexico. Just look for cities that have had flat or falling populations. Sometimes called the rust belt or other terms that imply the economy boom times are a distant memory.

Note that many of the communities that have shrinking populations still have some great neighborhoods. They just have a few too many homes compared to the number of people wanting to live there.

John Corey

Richard Warren · Answer

On the coast and in major metro areas it’s very difficult.  I have a number of rentals in rural Nevada and I have excellent cash flow there.

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N/A N/A · Answer

Are there any locations in the west coast that gives you positive cash flow in renting? Sometimes I just feel like it's not even at all possible. =\

Richard Warren · Answer

It’s best if the funds are held in a separate account for the sake of simplicity but I’m not sure if it’s required, I use a property manager and they handle that stuff..  It is my understanding that the tenant is NOT entitled to the interest.

Be careful with the L/O agreement, you want to make sure that you understand everything that is in it.  My suggestion would be to have an attorney review any document that you use.  Does the agent have any suggestions about the agreement itself?  It should be fairly easy to get one but I’ve never done a L/O.

I can provide a referral to an attorney if you need one.

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Bernadette C. · Answer

Hi, Rehab,
Wondering if you have infomation on Landlord laws.
We just fired our Management company in Vegas and have taken over managing ourselves. The Tenant has sent us the rental deposits, do we have to put it in a trust account and if there is interest accumalated does is it sent to the tenant when the lease is up? Also we are charging 850.00 for rent and they want to stay for another 2 years, their lease is up in Dec. Great tenants and don't want to lose them. We could probally get 950 for rent . We wanted to take advantage with the equity we have built up and eventually sell. Any suggestions on how I can renew the contract for rent.

Also our other property has been up on the market and the agent has suggested a L/O. Any suggestions on who can draw up a contract?

We bought theae properties in 98.

Bernie[/code]

Richard Warren · Answer

Las Vegas rents are rising but there are a lot of vacant houses.  There are a huge number of vacant REO properties as well as vacant SFH for sale.  At last report 40% of houses for sale are vacant.  The realtors and lenders that I network with are all struggling to get by and many are leaving the business.  A recent law went into effect on Oct1st that essentially put an end to stated income loans in Nevada. Politicians felt they had to step in so that it would look like they were doing something about the mortgage crisis.  Other states have tried this only to repeal the law when they found that it did more harm than good.  The Nevada legislature only meets every other year, which means that the law will be on the books for at least two years before it could be repealed.  Many major lenders will not do business in the state until the full ramifications of the loan are understood.  This is already hurting a market that was slumping badly.

On the rental front things are more promising.  There is a severe shortage of apartments because so many were converted to condos during the housing boom.  We still have in excess of 5,000 people a month moving here and they have to live somewhere. We have several major hotel projects underway that will add 40,000 hotel rooms by 2009.  That will result in 250,000 jobs and 500,000 new residents who will primarily be renters.  Rental prices have increased by about 20% in the last two years.  On the down side if you buy a house for the purpose of renting it you will still have a negative cash flow as the rent to price ratio is still only about 0.6%, this means that a $250,000 house will rent for about $1500.

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