Vegas Prices Continue to Soar

[Phillip Dwyer]

I just read an article that shows Vegas is poised to meet the previous pricing peak very soon.  Here's the link: GLVAR reports

[Bill B.]

Some day I’m going to make a “copy and paste” why I wish people would stop worrying about the 1% rule that has almost nothing to do with any market where houses cost over $150k. 

1) $300k house that rents for $2900 and costs $2200 in payments with seller will let you have it with $10k down. ‘Sorry can’t buy it, doesn’t meet the 1% rule”

2) $50k house that rents $550 a month and payments are only $500 and you can get in with only $5k down. “Sweet, I’ll take 20 since it meets the 1% rule...”

Go the other way...

3) $5 million dollar house, rents for $50k/month. Payments are $60k/month but you can get in for only $10k down, ON A $5 MILLION DOLLAR HOUSE, SWEET DEAL!  And it meets the 1% rule. 

Ps. Don’t forget, the same people who bring you the 1% rules say you should expect 1/2 the rent to be spent on expenses other than the mortgage payment. So if it doesn’t cash-flow at 1/2 rent after expenses you shouldn’t buy it either.