A Las Vegas Real Estate Agent Asks, "Is it Time to "Invest" in Las Vegas Real Estate?
A friend of mine is building some new homes in the south part of Las Vegas located close to Las Vegas Blvd. The community has a product similar to a townhome except that the houses are detached. The price per foot is $96 to $104. The actual prices are $130,000 to $158,000. I penciled it out and with 20% down the return on my investment would be 4.7%. And this is if I manage the property myself. A cash purchase would net 6.24%. (These returns do not take into consideration income tax deductions.)
Even though I have been in the Las Vegas real estate biz for years I do not own a rental property. Why? Because it never penciled out to my satisfaction. I want a fair return on my investment. I don't want a break even and I definitely don't want a negative cash flow. Soooo many Las Vegas "investors" (speculators!) obviously did want that. And I admittedly got caught up in the buying frenzy of the boom years and put in a couple offers on some homes only to toss and turn all night trying to justify a big fat negative cash flow in the hopes of equity appreciation. Thank goodness I canceled those deals.
What I want to decide is if it is time to invest in rentals here in the Las Vegas Real Estate market. I am seeing positive cash flows of more than 1 or 2% for the first time since I can remember. But I am also seeing the rents slip over the last few months. And many of the owners of the properties with the slipping rents are very much upside down. Their current home values are half of the original purchase price. Another wave of foreclosures and short sales on the horizon? Looks that way. How many waves are out there and when will it end?
The above observations are based on actual data taken from the Greater Las Vegas Board of Realtors Multiple Listing Service and Clark County Recorder's office.
Also... I highly recommend the above mentioned community. Please call or email me for more info.
Sandy
702.612.8777
SandyMcBride@cox.net
Loving Las Vegas Real Estate or Leaving Las Vegas Real Estate...
OR...IS IT FINALLY TIME TO BUY LAS VEGAS REAL ESTATE?
I have asked myself many times in the past 2 years if it was time to move on. Should I leave the Las Vegas Real Estate market. After all our economy is being reported as one of the worst in the country.
Moving to Las Vegas in 1989 I saw the city was ripe for expansion. And expand it did. Builders from all over the country set up shop. Some were local and many were publicly traded. Model homes were opening everywhere, usually at the end of a dirt road on the edge of the desert. For years the data for the number of new home and resale homes was counted and reported. And year after year the numbers climbed. Life was rosy. Life was good!
The new casinos on Las Vegas Boulevard (the infamous "STRIP"!) rose one after the other like jewels in the sand. Each one more brilliant than the last with their bright lights beckoning. An article which included an image of a photo taken from a satellite in space explained that the sensors of the satellite were reduced to the point where it was determined that Las Vegas was the brightest city in the world. No surprise to me. (See Article and Image)
The Las Vegas economy continued to soar. Jobs grew rapidly. Residential and commercial real estate as well as land values skyrocketed. So what did we do? We went shopping!! WE WERE UNTOUCHABLE!!
WRONG!!! WAY WRONG!! I will spare you the details because most know how the story ends up. BUT... There IS a light at the end of the tunnel and we are beginning to catch a glimmer of it. Data is beginning to show some stabilization in home values. Just when I was thinking of packing my bags and moving on to greener pastures.
The graph below clearly shows that for the last 10 months resale and new home values are stable.
Some would say we are "scraping the bottom". And if there was ever a time to purchase a home in Las Vegas...this is it. Many REALTORS® say resale homes in Las Vegas are so undervalued the builders can't make a profit constructing new homes at today's prices.
This data and more is provided by Dennis Smith Home Builders Research.
The bottom line...For me and for now, Leaving Las Vegas is not an option. Buyers are coming from all over the world to plunk their money down on houses. More than 50% of the home sales are cash. Go figure. There are lots of deals being made and real estate agents are very busy with closings. After all these years this place continues to amaze and entertain me. It is any easy place to live. The climate is great, natural disasters are few and far between and people are generally in good spirits.
I LOVE LAS VEGAS!
SANDY
702.612.8777
SandyMcBride@cox.net
The secret to life? Get happy. How? See the good. This is my approach to real estate sales. Keeping our eye on the prize (THE CLOSING!) smooths out the waters. So let's "go with the flow"!
Many moons ago while serving in the United States Air Force I was having a conversation with a fellow Sergeant about what to do after my enlistment was up in a few short months. He suggested the real estate business since I liked to talk a lot. Actually he said I had a big mouth.
Coincidentally, the base I was stationed at was offering an evening real estate class. The class was boring but it did light the path for me. Later that year I was the proud recipient of a license to sell real estate in Arizona. It was a glorious time. Phoenix was expanding and residential purchase contracts were only one page long. And disclosures? Never heard of them.
Fast forward to present day...Contracts are WAY more than one page and the list of disclosures continues to grow. Thankfully we can all store our paperwork on computers now. It was only 3 or 4 years ago when my clients needed a wheelbarrow to carry copies of their paperwork with them.
All that being said and with 25+ years in the real estate biz I can still say "I LOVE IT!" Really. I do. Well, most of the time. I love the smell of a newly framed house, the excitement of receiving an offer on a listing, the challenge to get an iffy loan approved for a Client, the hugs from the Buyers, the hugs from the Sellers and the thrill of closing the deal. And much more. Putting together real estate deals is a big part of my life and one of my goals is to be one of those grizzled old Realtors that hang out at the local Board of Realtors. My other goal is to be a campground host. Maybe. We'll see.
Most importantly my focus is a satisfied Client. I want them to be happy. I want them to have fun. A tall order in the real estate business but they deserve the best of service and I am confident I can deliver. Of course, times are tough right now and short sales and foreclosures are not anyone's idea of a good time BUT (the following is said with cautious optimism) all of this will eventually go away and a thriving economy will be the order of the day.
Sandy McBride
Broker Salesperson
Realty ONE Group, Inc.
Las Vegas and Henderson, NV
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