Need input on Las Vegas possibility

jonnyju29 · Nov 4, 2009

Hi all,
I`m looking to buy a foreclosure property (fully detached house) in las vegas and have it rented. One in particular I`m looking at is in the pioneer park area or zip code 89128. I`m having trouble finding any recent (since 08) and reliable rental vacancy rates for the area. I`ve found sites that claim that the zip code apparently has a vacancy rate around %9 but that`s a large area (40,000 ppl), and I`ve also seen another apparent vacancy rate for the area as high as %23!
It`s not difficult to make a foreclosure property cash flow but I`d like to be assured that I can get it tenanted. Does anyone have any input on vegas, vacancy rates, etc.?
Thanks,
Jonny
clark county vacancy rates by zip code

Thomas Beyer · Nov 6, 2009

Talk to a local property manager .. or better: 3

LV is a big city .. and as such you will always have people looking to rent. here today ... gone tomorrow though .. expect huge fluctuation. An average rate means NOTHING. Your house is either 100% full .. or 100% vacant.

Have you considered supply/demand, new construction, in-migration, exit options, tax implications and ability to get financing ?

Are you Canadian ?

Apparently the US has 20,000,000 vacant homes .. scary stuff .. that will take a while to get that absorbed ..

Nir · Nov 7, 2009

Great comments Thomas! The tempting thing abouth the states though is: what`s 15% vacancy rate when CAP = 15%.

Thomas Beyer · Nov 8, 2009

QUOTE (investmart @ Nov 8 2009, 12:21 AM) Great comments Thomas! The tempting thing abouth the states though is: what`s 15% vacancy rate when CAP = 15%.
it is tempting .. until one factors in the likely US $ depreciation, the weak mortgage market (i.e. lots of cash down !!) and the taxes payable in the US .. so is a Can $ invested today yielding a nice Can$ return in the future ?

Possibly .. but not necessarily !

A US investment makes sense only right now IF:
a) it is for personal use (because you like NV or FL or AZ or HI to vacation in / live part-time), or

b) if little cash is invested, i.e. a decent mortgage can be assumed or be had .. AND
c) if property management is hassle-free, i.e. can be managed from afar with competent local people AND
d) the local market has a chance to recover and is not swamped with huge foreclosures and bankrupt condo boards that may render your investment worthless while you hold .. i.e. it is hard to rent to someone else in a semi-built out community with dirt roads or a 75% vacant condo building with the pool not working, the grass brown and the hedges untrimmed !!

Recently a friend of mine visited a Palm Springs golf course community .. what used to be a nice golf course community is now a bankrupt golf course, with weeds what used to be fountains and fairways, with what used to be multi-million $ homes vandalized .. so if you can pick one up for $400,000 cash .. wait for 2-3 years .. then maybe it is worth $1M again .. maybe ..

Also: look back not just 2-3 years but 8-10 years .. so is that house that was $800,000 2 years ago and now can be had for $400,000 really a good deal . or just "market" .. as it was probably $200,000 7-8 years ago .. so $400,000 is normal and $800,000 was abnormal and may not return for a decade or more !!!

But: if you have cash to buy and hold, do not need a renter for 3 years .. then some deals can be had .. but now the question is: is that $250,000 invested perhaps better deployed elsewhere with a similar return with less risk ?

brentdavies · Nov 11, 2009

Just back from a few days in vegas. Lost my shirt and got a cold. Wish I could have left it in VEGAS!

3 bedroom,2 bathroom, 2 car garage for $125K to $140K. 3 years ago, 300K plus.

Rents for $700-850. (one cabby was just buying her first house, $918 all in per month, PIT, paid $132K)

Layoffs are still going on in vegas, so finding a equity building tenant may be difficult.

Read South of 49 by Phillip Mckernan if you really don`t want to throw your money away.

Thomas Beyer · Nov 11, 2009

QUOTE (brentdavies @ Nov 11 2009, 10:59 AM) ..
3 bedroom,2 bathroom, 2 car garage for $125K to $140K. 3 years ago, 300K plus. Rents for $700-850. ..

..
and probably 120K 5 years ago .. back to normal ..

for these prices might as well buy in BC or SK or AB .. smaller houses in smaller communities with similar prices + rents ..

jonnyju29 · Nov 12, 2009

QUOTE (ThomasBeyer @ Nov 11 2009, 12:57 PM) and probably 120K 5 years ago .. back to normal ..

for these prices might as well buy in BC or SK or AB .. smaller houses in smaller communities with similar prices + rents ..

Thanks for all of the info guys. I`m still looking at US cities as the place to but a first property as for under $100k you can get an income producing property and if you put %100 down, or close to it, you can cash flow very easily. I`m looking for a 3-5 year term. I did buy and am currently reading south of 49, thanks for that tip.

Since I am Canadian and in BC, California is close enough that I can drive down on a weekend or four to personally visit properties, although I do not plan to personally manage it.

I`m currently looking at long beach California as it has the deep water port for long term economic stability, better diversity in terms of industry, borders LA, and has a lower unemployment rate than vegas.

Any thoughts on California???

Thomas Beyer · Nov 12, 2009

QUOTE (jonnyju29 @ Nov 12 2009, 08:44 PM) Any thoughts on California???
beautiful place .. up to 1km off the coast .. then a desert .. left leaning government, rent control, highest taxes in NA .. huge debt, bankrupt state basically, high unemployment .. but: last stop for "Go West, Young Man" .. plus Pacific Ocean Beaches + Silicon Valley + Hollywood will always make it attractive !

CA is such a huge place .. I love the SF Bay Area and worked there for many years flying in from Calgary very frequently .. many investment opportunities in many places for the right price ..

So, your idea behind NewPort Beach seems to make a lot of sense but I do not know enough about it ..