When Is It Time to Stop Renting In Vegas and Buy a Condo?

You’re sick and tired of renting, and you want to settle down and invest. The grass can definitely be greener on the ownership side — but how do you know when it’s the right time to jump the fence?

If you’re prepared for the commitment, condo ownership can be a rewarding investment that pays off down the road. If you’re not ready, you could be swapping one hassle for another.

When you rent, it can seem like you’re throwing your money into a void. You have to deal with landlords and their restrictions, and you’re at the mercy of increases in your rent. On the other hand, when you buy, you don’t necessarily save on your monthly expenses. Any upkeep is yours to deal with and, in the long run, you’re at the mercy of the market.

That said, while buying may look more expensive, chances are most of that money is going to come back to you eventually thanks to appreciation, making it a cheaper option at the end of the day.

When you buy a condo, you reap some of the rewards of renting while avoiding some of the nuisances of traditional home ownership. For one, you won’t be wasting any afternoons (or paying a neighborhood kid) to mow the lawn. Forget maintaining a picture-perfect exterior to impress the neighbors; all you really have to worry about is the interior. And, unlike that apartment you were renting or any house you’ll find, a condo typically comes fully equipped with amenities like a gym and private function space that can save you invaluable time and planning, not to mention the cost of a gym membership.

That said, there are still a few ways to tell when it is time to stop renting in Vegas and buy a condo. We put the question to Las Vegas homeowners, and they had some advice. You may find yourself relating!

As Soon as Possible, if Possible

“Right now. Better yet, yesterday. Better yet, 3 years ago. Even better, 2011. Every day you wait, you throw money down the drain (rent) and the cost to buy goes up... Interest rates are also expected to go up. Rent costs are similarly projected to continue to increase. Every day you delay costs you money. It's simple math when you know the markets well.” - Jonathan T. Gedde

A lot of people would love to buy right away, but there may be some practical barriers. Maybe you don’t have the down payment, or maybe you’re not sure you’ll still be in the same city this time next year.

But, if you do have the money and feel relatively secure in your professional and personal life, home prices are rising in Vegas due to a housing shortage, with no sign of stopping. Cashing in on it at this point of the game could pay off in the long run.

“Now! As a real estate investor, we've seen the appreciation of the homes and condominiums in the Las Vegas valley quickly move upwards… Las Vegas is still an affordable housing market and the housing prices are still well below the peak years of 2007.” - Witan Capital

When You Can Afford It

“You have enough cash for a decent down payment, ideally 20% to avoid unnecessary fees. After the down payment, you’ll have enough cash left over for emergency maintenance should it become necessary.” - Charles Slade

If you think you can afford a condo, it’s time to sit down and do a breakdown of how much it will actually cost you.

While the first thing that comes to mind is the down payment, there are several other associated upfront costs to buying a condo. There are taxes, broker fees, and legal fees to think about. And, as Charles mentioned, you should have enough cash set aside for emergency maintenance.

“Save up for your best down payment, then find your monthly mortgage payment and add in quarterly property tax. Remember to factor in the costs of utilities and decide from there.” - Kathy Jamison

In terms of month to month affordability, you’ll be paying more than just a mortgage. Utilities, taxes, and HOA fees add up. Recommendations of how much of your income should go towards total home ownership costs range from 25% to 33%. Take a close look at what makes sense with your budget.

You’ll also want to make sure you’ll be able to continue affording it. Is your job stable, or are you securely self-employed? If you aren’t, taking on the responsibility of condo ownership could be too much.

“You [should] have a stable source of income. E.g., not only are you employed, but your company is stable and your role in the company is stable.” - Charles Slade

Finally, you’ll want to make sure you don’t have existing debt that will make the load unbearable. If you have a heap of outstanding credit card debt, purchasing a home might be too stressful. On the other hand, if you have low-interest student loan that you’re regularly paying off, you can probably factor that into your ownership equation. It could, however, make it more difficult to qualify for a loan, so make sure you enroll in an income-based repayment plan to prepare for your assessment.

“You [shouldn’t] have other high-interest debt, like typical credit card debt. Low-interest debt, like student loans, is fine. As long as…you can pay your monthly payments.” - Charles Slade

When You’re Ready to Commit

“I advise my clients to buy a home instead of renting if they are going to be living in the city for at least 5 years… If they will be there less than 3 years and do not want to rent the home out after leaving as an investment, then it is advised that they rent a home for themselves.” - Nick Falcone

If you see yourself settling down in Vegas for a few years, buying is probably the smartest option. It allows enough time for the condo to appreciate in value, and for you to get settled in the new space.

Lenders advise against buying a home for anything less than five to seven years because it’s less likely you’ll break even, and you’ll be at the risk of the market.

If You’re Psychologically Ready

“I think it helps, psychologically, if you accept the fact that at some point, there will be a surprise in the first few years after owning the house.” - Charles Slade

At the end of the day, you may be able to financially afford ownership, but if the stress is too much, is it really worth it?

Fortunately, condo ownership offers a “best of both worlds” scenario, and many of the pressures of traditional home ownership can be avoided by taking that route.

As with any purchase, a little preparation can go a long way in smoothing the transition. If you think you can afford a condo and you feel the time is right, it’s worth sitting down with a mortgage specialist to find out more.