All Forum Posts by: Account Closed

@Gordon Hee the luxury rental market is active in Vegas and underserved. I like guard gated Red Rock Country Club (RRCC) in Summerlin 89135 for higher end rentals. Here are some examples inside RRCC for real world reference (pics on Zillow): 3332 Saddle Soap currently rented for $3,500 but given current market conditions it could fetch $4,000/mo. For larger two stories w/ a pool the rent rates are $5,500 - $7,500+ (1990 Country Cove @ $5,500+ and 2645 Grassy Springs @ $7,500). Another good neighborhood for luxury rentals is gated Canyon Terrace zip code 89144 ($5k/mo: 9501 Canyon Mesa). Owner purchased for 1 mil last year put prices have increased the past 12 months. For Henderson higher-end rentals you could look at homes in Grand Legacy or The Masters but rent rates are lower than RRCC. Here are the professions for the people I have living in some of my  higher-end rentals: pediatric dentist, retire who moved from CA and doesn't want to purchase yet, PR Agency Owner, Raiders coach, IT Executive. (For privacy reasons the rental address of the Raiders coach is not listed in this post).

@Bob Weber when searching online or driving around town make sure to consider these zip codes for single family rentals: 89012, 89044, 89074, 89052, 89123, 89135, 89138, 89141 & 89144. In our market your wife is spot on. 

@Theresa Minifield I do also believe the pandemic and supply/demand have had a great impact on prices and rent rates but in the next 3-5 years we will all hear more talk about how iBuyers and institutional investors have propped up real estate values to unrealistic and unsustainable levels. It started yesterday with headline news of Zillow selling thousands of homes across the USA for more than they paid. I've been noticing this trend in Vegas the past two months and can confirm the analysts are correct. You can look in any market and typically on the first page of Zillow you will see homes that state "Zillow Owned". Then you can look at their asking price vs. their purchase price in the facts. Zillow's behavior is reckless. 

The pandemic alone didn't create this current residential real estate market boom. I believe it's the perfect storm of the pandemic, iBuyers and institutional investors. Never before have iBuyers and institutional investors focused so heavily on residential real estate. 

@Keith Sheridan. It's so far from daily life for Vegas standards. Limits renter pool imo.

@Aren Kern I asked that same question to a general real estate BP group a few months ago and no one replied. I think the 1% rule is a fun stat to follow but there just doesn't seem to be any major markets across the US that offer it anymore. Back in 2011 and 2012 I know Vegas and the suburbs of Dallas were part of the 1% rule. For example, I purchased 53 Desert Rain Henderson 89074 back in 2012 for around $150k and it rented for $1,495. It's now worth $400k+ and renting for $2000-$2,200. I wish I could get $4k/mo! Same with Little Elm, TX...purchased a single story SFR for $150k and rented for $1,500. I eventually sold my Texas places as I got so tired of all the roof damage from hail and the high property taxes.

I agree with @Bill B. to start on the smaller scale. A 1,500 sq.ft. house will cost you much less in turnover costs than a 3,000 sq.ft. home. More expensive rental homes in Vegas can attract a high rent rate but also a more transient renter (stay for a 12-18 months or less) who can afford to eventually buy their own home. The sweet spot in Vegas has historically been the $1,500 - $2,000 rental. With rent rates increasing the new sweet spot is $1700 - $2200. Once you get above $2,200 - $2,500 the interest wains from locals.

I've been noticing Zillow rent zestimates are starting to get skewed by furnished and short-term rentals comps.

Fun fact...if you google the word askew your screen with tilt. Have a great Sunday. :)

@Aren Kern your targeted rent rate seems high. Recently rents have been averaging 1/2% of the purchase price. For example, in Vegas a home worth $800k should rent for $4k. With that being said rents continue to rise. Last month I purchased 2508 Ashley Rose Terrace in Henderson for $525k and tested a $2,995 rent rate and secured a quality tenant at this higher rent rate. Previous rent comps were closer to $2,500 (supply/demand still askew in our market). 

There have been recent legislative changes that have impacted property management in Nevada. AB308 Impacts “increase of rent” notices: for a periodic tenancy of 1 month or more, 60 days in advance of the first rental payment to be increased (up from 45). AB141: seals eviction records for evictions for nonpayment of rent during the COVID-19 emergency, not the sealing of all evictions during the emergency. AB486 (set to expire June 5th, 2023!) states that for all evictions, except “nuisance” evictions, the tenant can claim as a defense that they have applied for rental assistance. The court must stay the eviction proceeding until CHAPS rules on the application. Finally, a new Clark County ordinance was passed prohibiting property owners and managers from discriminating against prospective tenants based on the source of their income or an eviction related to a loss of income experienced because of the pandemic (section 8 included in the source of income discrimination).

Nevada previously was a very landlord friendly state. This is slowing changing. My best guess is that rent control will be coming in the next 2-3 years.

Many Buyers in Vegas & Henderson believe tile roofs have a lifespan of 50 years. While this is partially true because the tiles themselves have a lifespan of 50+ years the paper underlayment that provides the waterproofing does not. The typical life span of the underlayment is 20 to 30ish years if you're lucky. Many of the houses across town are in need of "new" roofs. 

Here's what a reroof looks like when you have a tile roof:

• 1) Remove existing tiles and stack
  2) Remove existing battens and haul away
  3) Strip existing felt down to plywood sheathing and remove from site (some roofers only partially remove the original layer)
  4) Replace any degraded plywood
  5) Install two layers of 30lb felt over existing felt to completion
  6) Install new drip edge and new bird stop around perimeter of roof
  7) Re-install existing tiles over new battens and new underlayment to completion
  8) Replace any broken tiles with new tiles 
  9) Re-flash all vents and pipes where applicable
  10) Supply and install new hip and ridge enclosure

*Builders back in the day only installed 1 underlayment layer. A reroof consists of 2 underlayment layers of 30lb felt over the plywood.

Depending on the sq.ft. of your roof a reroof can be anywhere from $7k to $25k+ so something you'll want to factor in to your ROI numbers depending on when your investment house was built. During a Buyer's market you could come to a Seller during due diligence and ask for a credit or repair. But during a hot Seller's market the seller is most likely going to tell you to go fly a kite as they would just put the house back on the market and have another Buyer in a few days.

Real world example: 1) single story house built in 1990 that is 1,378 sq ft a reroof is $7,500k. Zip code 89128.

*note: there are some houses in 89014 that have unusually small tiles that are not manufactured anymore. In cases like this you have to get lucky and hope a local roofer has them in their yard for a repair. The existing tile on these houses (built around 1992) measure 10 inches wide by 15 inches in length and today’s tile is 12 inches wide by 17 inches in height. The 2 tiles cannot be tied together without it being noticeable since the bird stop along the roof’s eave will be different, the size of the tile will be different and the color will also be different so. 

@Phillip Dwyer thanks for bantering with me on this topic. I'm fascinated by the overall real estate market disruption from the pandemic (influx of people/govt manipulation with eviction moratoriums, etc.) and now the further disruption in our local market from hedge funds swarming the entry level SFR market.

Most of my Owners were at close to or at market rent prior to the 30-40% spike in rents over the last 12 months. We’re hitting the 1 year mark of the start of higher rents so I’m having daily conversations with Owners educating them about the rapid changes in our market. Lease renewals are super relevant at this point because rents have spiked significantly in such a short period of time. To your point long-term investors are hundreds of dollars under market in just one year as most tenants are on 1 year leases.

And to answer your question, yes- I’m buying an investment house in 89052 now and will list it at or above market rent due to supply/demand. I'm not against making money and free open markets. I'm just not increasing lease renewals more than 10% a year. I'll slowly increase it over the next 3-5 years to catch-up. I'm a long-term hold investor and do my best to keep long-term tenants.

I too am curious to see how this all plays out in 5-10 years. There is a chance we come out of this OK as we are still a relatively young city and the residential sector is well funded with cash at all levels. The turning point will be when/if the institutional investors decide to liquidate en masse due to low returns or from future government polices trying to regulate their investment.

I found out yesterday we do have some BFR platforms popping up across Las Vegas (Centennial, Silverado Ranch and some others). This one was just announced..."The Calida Group has drawn up plans for two projects totaling around 450 rental homes in Henderson’s Cadence community." Isn't that where the PEPCON explosion occurred in 1988? "The flames, which grew out of control, soon engulfed PEPCON’s massive stock of oxidizer, creating the largest domestic, non-nuclear explosion in recorded history." Sounds like a great place to build. LOL.

Apartment living is one thing but entire neighborhoods of houses filled with renters? No thank you. 

Have a great one!

@Phillip Dwyer I do personally own properties across Vegas/Henderson and no I'm not raising current tenant's rent rates 40% in 1 year. Most of my tenants have lived in the home for 5+ years. Rent comps have skyrocketed in the last 12 months and most significantly in the last 60-90 days. The max I'm raising rent on a current tenant is 10% and that is even a sticker shock to a majority of the local population.