Las Vegas Question

[Daniel Mills]

Hi guys,

This is not directly related to investment, but it is about real estate. My mom is currently living in Las Vegas, Nevada (Summerlin). She purchased a single family home there about 4 years ago for $150,000. It seems that similar homes are selling for around $200,000 now. The issue is that she is planning to move to Japan to be close to my wife and I in two years, and we are wondering whether it is better to cash out now and maybe buy a home we could turn into a rental later (she can't rent the house house owns now because of HOA rules) or stay put. I know the market can't be predicted exactly, but does anyone have a suggestion about how they would go about making this decision? Thanks.

[Non Phan]

I'd argue that paying in full with cash is not a smart investor's way of thinking, she'd be putting too much of her own money at risk for no reason rather than having it be tied up to one property. The main reason why one can get so much farther with real estate is from the leverage one gets from being able to borrow and use other people's money to purchase and invest.