[VR4Jen]

I'm from Los Angeles and have decided to purchase an investment property after being shocked at the price of homes in Vegas. I've called a couple agents and have already been pre-approved, but I'm just trying to get as much insight as possible.

Some of these houses at 50k just seem too good to be true. They are 10x better than what I could buy in my town, and 10x cheaper.

I've looked on Craigslist and they seem to all be renting for 1000-1300, too. I called a property management co. and he said that it takes about 2 months, on average, to rent a house out and smaller homes go for ~1100 while larger homes can get ~1300+.

My biggest concern is that I buy a house, fix it up to rent, and it sits on the market for a year (or even several months) vacant. I have 50k to put down so I could buy one with cash, OR put 25k down on two properties which is what I'm leaning towards.

I feel like I'm missing something here because why haven't all the investors bought them all up already? Should I be warned of anything? What have your experiences been like??

I'm trying to drive out there this weekend to look at places so I need info fast. Thanks in advance for your help!

[007 license to sell]

This is important news regarding homes priced in the $100,000 are dwindling. Both investors and primary home buyers aren't buying as much since good inventory in this price range seems to be going away.
I have personally seen this happening, homes in that price range now seem to be major fixer uppers.

Fewer existing LV homes sell in May, June than in 2009 July 30, 2010 By Buck Wargo Sales of existing homes in Las Vegas ended a two-year run of year-to-year increases in May.

[crazy_bd]

My guess is that with the 50k houses, one or more of the following can happen:

The houses will not actually sell for 50k, but higher.
The houses are old and/or in horrible shape
The houses are in "bad" neighborhoods
The houses are short sales and will take time and effort to close a deal on

I doubt you'd get much interest in renting a 900sq ft home in a shady area for $1100+/month. If it sounds too good to be true...
But I am sure a realtor here can give you better and more accurate answers.

[mjjudd]

Another point to consider... if someone has $800-1500 to pay for rent, why wouldnt they just purchase a house when they can get a mortgage for maybe $400-800 on a 70-160k house. I wouldnt imagine there are too many renters in the $800-1000 range (except for the ones that just walked away from their 2-3k/mo house payment.. and do you really want to rent to them?)

[007 license to sell]

actually there are allot of renters in looking for rentals from $800.00 to $1000.00 a month especally with so many foreclosures those people can't buy homes now. Also keep in mind Vegas is at 14.5% unemployment so who are going to be your renters?

[VR4Jen]

I'm trying to sort out all the good/bad areas... hard to do from way out here. But there are plenty that are newer construction and look decent inside from the pics (I don't mind a cosmetic fixer-upper), are NOT short sales, and seem to be in a "good" neighborhood (meaning surrounded by newer houses)... like these ones

http://www.lasvegashomes.com/Default...r=/1022327.htm

http://www.lasvegashomes.com/Default...r=/1060077.htm

Those houses here in that sort of neighborhood would fetch 800k easy.

Even if I could only get 1k/month from these that would still be a large profit. Am I missing something or is this just a no-brainer??

[MomMom]

Quite honestly OP, but in my opinion why do you even want to consider buying a property in Las Vegas, strictly for renting it out, with our bad economy here? What do you think the quality of renter is going to be paying such low rent for a very small home?

And being you live in Cali, you'd have to hire a Property Management company here in Las Vegas to manage your house.

Really, the legend of the Las Vegas gold mine money making home ownership is over for folks such as you, using a smallish home as a source of rental income.

You'd be better off putting your nickel and dimes into buying a rental property in places that have better and growing economies, such as Texas, Colorado and North Carolina. At least your investment will gain in value, and not go further down like it's doing here in Las Vegas.

Don't say we didn't tell you so

Much good luck to you in whatever you decide to do! Have fun while here!

[WestieJeff]

I don't expect you will find a property for 50k (or even close) that you can rent for $1000-$1300. A friend of mine has a nice property right outside Summerlin, 1700sf built in 2000 that he had to drop the rent to $1200 to get it rented. My guess is that house would sell for at least 125k today, probably more.

Originally Posted by VR4Jen

I'm from Los Angeles and have decided to purchase an investment property after being shocked at the price of homes in Vegas. I've called a couple agents and have already been pre-approved, but I'm just trying to get as much insight as possible.

Some of these houses at 50k just seem too good to be true. They are 10x better than what I could buy in my town, and 10x cheaper.

I've looked on Craigslist and they seem to all be renting for 1000-1300, too. I called a property management co. and he said that it takes about 2 months, on average, to rent a house out and smaller homes go for ~1100 while larger homes can get ~1300+.

My biggest concern is that I buy a house, fix it up to rent, and it sits on the market for a year (or even several months) vacant. I have 50k to put down so I could buy one with cash, OR put 25k down on two properties which is what I'm leaning towards.

I feel like I'm missing something here because why haven't all the investors bought them all up already? Should I be warned of anything? What have your experiences been like??

I'm trying to drive out there this weekend to look at places so I need info fast. Thanks in advance for your help!

[WestieJeff]

I pulled up the Clancy property. It's not clear since the MLS listing says it is both a Short Sale and and Foreclosure. According to the assessors site, it's not bank owned, so I'm thinking that is a short sale. I wasn't able to pull up the 2nd property.

As you probably already know, the short sale listing price doesn't necessary equate into any type of sales price. It will sell at comps.

That part of town isn't the worst, but definitely not somewhere people desire to live in Las Vegas. You'd probably end up renting to someone who works at the base and I personally don't think you'd get $1000 a month. Maybe more like $800 would be my guess.

Originally Posted by VR4Jen

I'm trying to sort out all the good/bad areas... hard to do from way out here. But there are plenty that are newer construction and look decent inside from the pics (I don't mind a cosmetic fixer-upper), are NOT short sales, and seem to be in a "good" neighborhood (meaning surrounded by newer houses)... like these ones

2167 CLANCY ST, Las Vegas, NV 89156 - Las Vegas Real Estate

2718 ADVANCEMENT AV, Las Vegas, NV 89031 - Las Vegas Real Estate

Those houses here in that sort of neighborhood would fetch 800k easy.

Even if I could only get 1k/month from these that would still be a large profit. Am I missing something or is this just a no-brainer??

[VR4Jen]

Originally Posted by MomMom

Quite honestly OP, but in my opinion why do you even want to consider buying a property in Las Vegas, strictly for renting it out, with our bad economy here? What do you think the quality of renter is going to be paying such low rent for a very small home?

And being you live in Cali, you'd have to hire a Property Management company here in Las Vegas to manage your house.

Really, the legend of the Las Vegas gold mine money making home ownership is over for folks such as you, using a smallish home as a source of rental income.

You'd be better off putting your nickel and dimes into buying a rental property in places that have better and growing economies, such as Texas, Colorado and North Carolina. At least your investment will gain in value, and not go further down like it's doing here in Las Vegas.

Don't say we didn't tell you so

Much good luck to you in whatever you decide to do! Have fun while here!

Thank you for your advice, it's much appreciated.

I was considering buying a condo locally (there's a few for 100-150k here) but they generate about the same $ of rent for a house in Vegas.... so the numbers say it makes a lot more sense to pay only 50k, and have no HOA fees.

Assuming it is rented out, it would be a very good investment. I wouldn't plan on selling it anytime soon (maybe in 30 years when I retire?) so I'm not too concerned with the immediate values.

I would of course be paying a property management co $100 or so per month, and have a 12 month lease. But even on the months where it sits vacant, I would only be paying a small mortgage (if any at all), maybe $100 in taxes and $100 for management. One month of rent could recoup the costs of it sitting vacant for at least 4 or 5 months.

It seems to me like the ONLY way this could fail is if it never, ever gets rented... which doesn't seem likely. I would just drop the price until it became a good deal for someone... and still make a profit.