Trying to decide what to do with a Vegas Property

13 Replies

I am trying to get some advice on my situation. I have been flirting with the idea of either renting my house out or selling it for the past year. I have been so scared of making the wrong decision that I have done nothing with the property for the last year. I bought the property in Las Vegas in 2009. It was a bank owned property that needed some work. I paid 114k for it and it is worth today around 270k. I also own another property outright and some land. This is my primary residence but I have somewhere else to go.

A. Should I sell the Las Vegas property and use that money for a down payment to buy a multifamily unit?

B. Should I keep the Las Vegas property, rent it out, and take a mortgage on my other property that I own outright and buy a single family home or condo with that money?

you can sell the one you lived in and pay no tax.. as it was owner occ that's appealing. 

other wise its really personal decision and you will get 17 different opinions on what to do on this site that's for sure. :)

ya we sure hate that gambling for appreciation.. but some folks have to live with it.. good job.

First of all, congrats!  Great spot to be in..  Knowing this market like I do, Id say hold on to both for another 6-12 months..  Appears you may be able to squeak another 10-15% or more out of it..  No indication as of yet that anything is changing..  

I study the numbers every day as far as new listings and listings that go under contract and we aren't really gaining any inventory to speak of, and that means prices likely will keep creeping up..  

Multi family have jumped 100% in value in some instances over the past 2 years..  Not sure how much more gas is left in that tank either..  They're mostly in rough areas and in rough shape and have some challenging tenants to deal with, to say the least..  

There's some decent condo communities in middle-upper class areas that you can get in the $130-160 range..  May have some appreciation left in those, but cash flow is horrible across the board in everything except those run down multi's (which aren't as great as they were 2 years ago before prices jumped!)

If you have any specific questions, message me.   Good luck!

-Brandon

My only 2 cents would be when your ready to leave it, sell it. You’ve got lots of currently tax free appreciation. No reason to make it taxable. But if you like it, don’t move just to sell unless you want to hit the Pre - back to school market, but vegas has been so short of inventory for years I’m not sure that matters. but I also don’t think I’d sell it to buy something else unless it was cheaper and you has a use for the cash. 

Just my 2 cents, or less. 

I am in a similar situation in Las Vegas. Bought my primary residence in 2012 for 165k now worth 305k. I have decided to sell my primary residence and invest in the Midwest. It was a difficult decision as my family is emotionally attached to this home but based on the financial gains of investing the tax free appreciation it makes sense for us. 

Which ever choice you make it seems that you are in a good position!

I’m in the same boat. I’m trying to get a HELOC to free up some cash but my primary house In in my LLC. I’m having a hard time with all the local lenders.

You Vegas residents, I just posted about an awesome HELOC opportunity with nevada state bank, lock it in at 3.99% 85% ltv and 10 years. Check my recent post. Not sure why selling is the first option for you Kurt.

Congrats! Can’t say anything else everybody hasn’t already said! I also have a property in Vegas and I’m considering 1031 for it but I was asked a very good question... why sell now? The Raiders haven’t even arrived yet, the Knights were that close to a Stanley Cup and you know they’re gonna bring in a Major League team! Haha! All speculation I know! But consider you got out in front of all of it in 2009, what will it look like in 2019? Or 2029! Good luck with whatever direction you go!

I’m in a similar situation. I’m glad I did not sell last year, as the prices still went up and there is no signs of slowing down. Selling now and then re-investing the profit is a tough decision to make because obviously we are going to end up buying high too. Selling high and finding a good deal is always easier said than done, especially in this market. Multi-level properties have also gone up exponentially. Selling now and waiting for a correction is taking a gamble and I’m sure many will disagree with this route. This decision is not easy so I just renewed my leases, and keep the rents coming until next year. Then I will have the same dilemma again : )

Thank you, everyone, for taking the time to answer my question!!

@Jay Hinrichs This was my initial thought and I talked to my accountant and he said that I could potentially rent it out for a couple of years and still pay no tax. I believe he said I had to live in it 2 of the last 5 years to not pay capital gains. Thank you for your input... 

@Brandon Carriere I understand no one has a crystal ball and maybe my math is wrong but are you telling me that you think my house could be worth 27000 to 40000 more in 6 -12 months? It seems that my area has been having a cooling period. It was steadily going up until April and since then everything around me has been selling for the same price or a little less. So are you telling me that you would not recommend buying anything in Las Vegas right now?

@Oliver Martin Selling now and waiting for the correction is in the back of mind too. History always repeats itself.

Great feedback from everyone! I'm in the same position as well and have to decide by the end year. Good thing is your in the driver seat right now whatever direction you go i'm sure you'll be fine. Good luck!

@Courtney M.

I along with most others believe we'll have more appreciation before the inevitable plateau or correction or possibly recession (less likely it appears)..  Different areas and different price points in the Vegas valley may see different appreciation, so your area may be less, but we're still creeping up in values..  Another 10-15% seems likely at this point..  

Today for example, 210 new listings, 262 went under contract..  Thats 52 less homes available than we had yesterday..  Until there's a significant turn around in those #'s, its going to be more of the same..  

As far as buying goes, it depends on your long term plans..  Thats a tough call..  I don't love the option of buying now, unless its a cheaper condo that you can theoretically break even on as a rental in the future..  Short term, nobody wants to buy at or near the peak getting stuck with a hefty mortgage or having a ton of cash tied up. That may take away from all the profits you've made over the last few years.. But what do you do?  Sell both and take the profit and buy a 2/2 condo with cash and invest the remainder of the money elsewhere that cash flows?  Sell one and keep one? Don't sell anything?  

I'd sit back and wait til closer to years end and see how things unfold over the next 6 months or so..