When people think of Las Vegas, they think of the Strip, high-rise casinos, and flashing lights. Not many think about all of the opportunities for residential real estate, but the reality is that Vegas is one of the healthiest and most promising real estate markets in the nation.
Why Vegas Is the Answer
The first thing to consider when deciding where to invest in real estate is the state of the market, and Vegas’ market couldn’t be healthier.
Though the national housing market bubble burst a few years ago, some investors are still leery. However, the growth in Vegas isn’t a fluke. The expansion you see today continues to climb at a normal, steady pace, which is great news for first-time homeowners, experienced movers, and investors.
Las Vegas isn’t just for families and tourists. According to the Tax Foundation, Nevada is the third-friendliest state for business taxes in the nation, and it has held that position since 2012; it’s no anomaly. Zappos.com CEO Tony Hsieh is investing in downtown Las Vegas, attempting to emulate other booming startup-friendly communities around the country. He also plans to bring in new talent from all types of industries and create a thriving shopping, arts, and entertainment playground the likes of which Vegas has never seen.
Some people still operate under the misconception that Las Vegas only caters to the nightlife niche, but that couldn’t be further from the truth. Family-friendly outdoor activities are a huge draw for Vegas tourists; Red Rock Canyon alone brings in more than a million visitors every year.
Because Las Vegas isn’t prone to natural disasters and doesn’t endure long, cold winters, businesses and homebuyers have the chance to move to a thriving, healthy city without fear of a market collapse or unexpected setbacks.
How to Get Started in Las Vegas
Potential investors should follow these tips when considering a purchase in Vegas:
1. Look at the Big (and Small) Picture
Look at the environment before you narrow down a location. Is this area of Las Vegas part of Hsieh’s startup-friendly initiative, or is it geared more toward a traditional family environment? Can you rent your target home for the price you want? Does the area’s homeowners association place restrictions on rentals? What does this neighborhood’s market look like compared to others surrounding it?
Consider the rents and appreciation rates of different neighborhoods, and always remember to learn the vacancy rate of an area before planning to rent out a property.
2. Narrow Down Your Goal
What do you want and expect from this property? An investor looking to maximize profit needs to understand what type of property to purchase, where that property should be, and how long an investment should be held. Consider single-family units as well as multi-unit buildings, like apartment complexes and duplexes; both have perks and drawbacks.
One popular strategy is to purchase a home near the Las Vegas Strip and rent the property as a vacation home. It appears investors who go this route fare quite well, and so do their returns on investment.
3. Hire a Property Manager
New investors often downplay the responsibilities of property upkeep when renting. That said, a good property management company can save you from the unneeded stress, agitation, and costs associated with lack of experience in a new market.
Investors need to look at both the future and present: the expected increased value of the property for later sale and the immediate rental income. Setting up your business plan and legal entities in the beginning helps maximize both monthly and long-term profits — and insulates you from the daily challenges of renting.
4. Have an Exit Strategy
While this sounds like a worst-case scenario plan, it’s actually the best way for investors to maximize profits. Always ensure everything is in order to sell the property if needed. If your neighborhood experiences high appreciation in a short amount of time, and you find a house in a different neighborhood for a good price, you may want to capitalize on the new property seamlessly to maximize profits and defer taxes on realized gains.
5. Find a Good Consultant
Your most valuable resource when buying a new investment home is your consultant. Not only can your consultant help you identify easy-to-miss opportunities in the market, but he or she can also refer you to other professionals to help you start with the best foundation possible.
Look at multiple sources, talk to lots of potential consultants, and read reviews before deciding to work with one over another. Referrals help as well. Never underestimate the value of having an experienced, dependable partner by your side when investing in a new area.
Las Vegas is more than what you see in films; don’t let common misconceptions prevent you from making the smart decision. Speak with a professional today and check out the market for yourself. You might be surprised by what you find.