I have been working with a few investors looking to purchase investment properties in the last couple of years. Some of my clients have bought 1 income property, and others have bought 4-5 properties. CNN Money earlier this year claimed Las Vegas and the best city to buy an investment property/rental property for those looking to put their money into something a little more stable than the stock market. “Overall, the highest ratings are in markets where home prices have fallen substantially,” said Ingo Winzer, founder of Local Market Monitor. “Home prices in these markets are also below average, so empty homes are easily turned into competitive rental properties.”
The cities were ranked by estimated future returns compared with the projected national average return. According to Local Market Monitor’s data, for example, investors in Las Vegas who rent out the properties they buy now will have a 4.7% higher return than the 5.3% national average.”
Some neighborhoods in Las Vegas have seen a drop in home prices from the peak of the market as much as 65%. Many of the available homes for sale here in the valley are priced so low per square foot that the replacement cost to rebuild is higher than the purchase cost. When prices are cheaper to purchase than to rebuild, investors start to flock towards the market. Consistently over the last year, 48-54% of our transactions were purchased with CASH. That is a massive amount of money flowing into our city. Always follow the cash.
For those out of town investors looking to capitalize on our prices and great cash flow, the biggest question I get is where they should purchase. I almost always answer their question with a question to get a better sense of what your goals are. Are you going for appreciation? Are you going for cash flow? Are you holding long term? Are you trying to flip properties? Do you have a time frame? Are you a foreign national? Most of the investors I’m speaking to say they want appreciation AND cash flow.
The most rent-able investment properties with some of the best cash flow have these attributes:
- 1400+ sq ft
- 3 bedrooms
- 2 bath
- 2 car garage
- small yard
- Rents for $900-$1200
- Taxes will range from $1500-$2000 a year
- Home Owner’s Association fee vary depending on Neighborhood
These types of homes can be purchased for $90k-$140k depending on the area and upgrades. This falls in line with our median home price in Las Vegas which is $130,000. If you’d like to get a better quality home above the median price, I would recommend looking at property in the $190k-$225k price range. In this price range I would try to get a home with these attributes:
- 2500 sq ft
- 4 bedrooms
- 2-3 baths
- 2-3 car garage
- bigger lot size
- Rents for $1800-$2300
- Taxes will be $1800-$2600 a year
- Association fees will vary depending on the community.
I work with a property manager to whom I refer all of my investors. She can help rent out your property, collect rents, screen applicants, and help with repairs. I definitely recommend using a property management company when purchase out of state as it’ll help reduce the stress and headaches.
Some popular neighborhood that I’ve helped investors purchase rental income properties:
These are just a few of the most popular areas in the Las Vegas valley. There are plenty of great communities that would be perfect for a rental home.
Please feel free to contact me directly, at 1-866-589-1646 for more information regarding your real estate investments. Feel free to start your own search of the MLS below. This system is updated hourly and is more current than Realtor.com. You can save your favorites, get notified of new properties, and track prices. I have the ability to send you properties with very specific search terms, so if you need a specific type of property please call me.
Realty ONE Group
8395 Sunset Road, Ste 190
Las Vegas, NV 89113