[GreatNinja]

Originally Posted by logline

Just a little perspective here. I know that coming up with the cash can be difficult for most, but consider this:

You'll be renting for a year at $1000/mo. Let's assume you like it enough to re-up for a 2nd year (we've been here over 2 years and have no intention of leaving). By the end of that 2nd year, the rent you paid will have covered 25% of the cost of BUYING the condo. The 2BR units are selling for about $100k now... often times less if you can negotiate.

If you can swing it, buying the place and selling it later may be a better option for you. The break-even point is about 8 years... but instead of moving out as a renter with nothing to show for it, you'll own the place outright and be able to rent it out for income or sell it at higher prices 8 years from now.

Just something to think about.

Agree with you 100%. Unfortunately due to a short-sale I'm not quite able to buy a house. Another 6 months I should be good so I will start looking to buy. By then I will either love the place and try to purchase or move somewhere else.

The HOA fees scare me a bit ($350 I think?) and as a renter I don't incurr any of those. Plus maybe thinking of leaving Las Vegas eventually so this is just a short term solution.

Appreciate the advice though and it's something I'll look at in the future.

[ScoopLV]

Originally Posted by GreatNinja

The HOA fees scare me a bit ($350 I think?) and as a renter I don't incurr any of those.

Someone is paying the HOA. That someone is you. You just don't get an itemized list of where your monthly rent goes.

[lvoc]

If we are talking investment there is no way ever that Boca Raton makes a good buy. The rental value is simply destroyed by the HOA fee. You can buy two small condos for $100K get $1200 in income and HOA fees of 250.

There may be a good appreciation play in Boca. It is a nice facility and has been well maintained. Note though that it has the other half of the complex that has never been built. That land is going to get used and it may not be a friendly use. So if the area goes upscale you make out big time...if it goes to the low end you get screwed....life is like that.

[eventusstultorummagister]

$750/mo. not a bad deal...

High Life Living in Las Vegas!! Easy Qualify. (http://lasvegas.craigslist.org/apa/2983260498.html - broken link)

[007 license to sell]

Whenever you have a privately owned property mixed in with rentals those rentals will keep the value down. The hoa's are high in Boca due to when the project was hit with the crash and the developer who owned most of the inventory got behind in paying the hoa on those units, as well as the owners that did purchase their individual units stopped paying as well.

Since the developer has lost the remaining units to another entity and that entity has turned the property into one big rental property the values will stay low and make it difficult to get a loan due to having rentals.

As far a purchasing a condo over a sfh depends on the property, there are condo communities that are already seeing appreciation and or stabilizing. Those aren't the condo communities that have allot of rentals in them.

Keep in mind there were a little over 30,000 highrise condo's build compared to 100's of thousands of homes built which are continuing to be built . The highrise market inventory is low and prices are going up due to the last 4 yrs buyers recognizing the opportunity to own a luxurious property for incredible low prices so those types of properties have pretty much sold out except for the few remaining new condo's still for sale at still great low prices with the exception of CityCenter their condo's are still over priced for the market.

However midrise properties are still being built and for now those types of properties still being built will be all rentals and owners of those properties will either keep them as rentals forever or once the economy turns around could start marketing them as condo conversions.

House's like the highrise condo's there are some communities that are stabilizing for now until the banks start releasing their inventory after they get their paper work in order to prove they own the notes on the properties. The older established neighborhoods values are coming back sooner than the newer communities that were being built from 2005 to 2009.
And the reason for that is because of all the investors that purchased at that time without money down, no proof of income and were flipping them before the ink was dry. and got caught up in the crash and let the bank have the properties back.

We have a different investor now these buyers are cash investors, so the likely hood of another housing bubble may not happen. But what I do see is everyone purchasing rentals and there are allot more of those buyers than primary home owners or vacation home buyers. I see a potential for a rental bubble and that will be the next shoe to fall.

[logline]

Okay, for the first time in a few weeks, there is a new listing for sale at Boca Raton:
2455 W SERENE Ave #716, Las Vegas, NV 89123 | MLS# 1248352

Even though this one is overpriced, I'll be surprised to see this listing as still "active" in 2 weeks. With the speed of these things going so fast, I'll bet $10 this listing will go "pending" before May 20th. Any takers?

[LV2ndHome]

Originally Posted by logline

You'll be renting for a year at $1000/mo. Let's assume you like it enough to re-up for a 2nd year (we've been here over 2 years and have no intention of leaving). By the end of that 2nd year, the rent you paid will have covered 25% of the cost of BUYING the condo. The 2BR units are selling for about $100k now... often times less if you can negotiate.

This is not a good way to analyze/compare. First, you are only stating how many years it will take rent to equal the purchase price of the home. This is meaningless as to which is better. Rent is an expense (P&L item) while the purchase price is asset acquisition (Balance sheet item), so you are comparing apples/oranges.

You have also completely ignored ownership expenses (the owner's P&L items). During the period of occupancy, the renter has no cost except the rent he pays ($1000/month in this case). But for the buyer, in addition to paying the $100k purchase price you stated (which may appreciate or depreciate), the owner has buyer closing costs, interest expense, hoa fees, property taxes, and maintenance costs during this time, plus he incurs seller's closing costs when he wants to exit his investment. These certainly need to be accounted for in any comparison analysis.

Note that as I've posted before, I believe this is a good time to buy, and I am investing in additional properties myself. But this is a speculative investment, and I freely admit I could easily be wrong. My objection to the multiple pro-buy/anti-rent recent posters is when they try to present it as if buying is absolutely better, period. They seem to want to argue that the buyer will certainly always get more in rent than his costs of ownership. And that may be the case today in many instances. But the problem is rents may be lower down the road, and/or expenses may increase. If that happens, the investment may start losing money if held, and is not easy and cheap to exit either. This is exactly what has happened in recent years and also at other times in history. Many bad investments started out as good ones.

Back to Boca in particular, I dug around a bit some time back to gauge my potential interest in investing there. The thing I liked there is that they are concrete interior construction, so noise from neighbors should be much less of a problem than stick built, and I would think much lower risk of fire spreading rapidly.

There were a lot of things I didn't and still don't like as a potential buyer, but that would not bother me if I was considering renting a place there. The biggest thing I don't like is that one company owns roughly half of the units, is keeping them as rentals, and has no immediate plans to sell. If they get into financial trouble, it could put HOA funding at severe risk. Also they can out vote the other owners, so I would be at their sole mercy on many issues, and what's best for them would not always align with what's best for me. In other words, I fear the place could be run more as a dictatorship than a democracy moving forward.

Also I believe that property values will not perform as well moving forward for developments that consist of mostly rental units compared to ones that have more owner-occupants. All indications I've seen are that the percentage of units in Boca that are owner-occupied is very small.

Yet another dislike is that the project was only half completed, and it appears likely the other half will never be completed as originally planned. This means that things like the pool and clubhouse area that were meant to be focal points in the middle of the development are now on an outer perimeter with vacant land beside them. We don't know what will eventually be built to the east and west, and there are manufactured homes already to the south. There is a lot of risk in future market value because of this.

And lastly, a high percentage of the units are very small. The one that eventusstultorummagister linked to is only 586 sqft for example (which is probably one reason they are trying to rent it for $750). I think I recall seeing some 2/2 units there that weren't but around 700-800 sqft. There are some decent sized (~1200 sqft) and larger units, and yes, I realize some people may prefer a smaller unit than I do (less to heat, cool, and clean in addition to a lower purchase price).

[eventusstultorummagister]

Here's some recent price history to consider:

2 Bdrm/2Ba, 784 sq. ft.
Sold: 10/19/07 $394,708
Sold: 02/24/11 $69,900

2 Bdrm/2 Ba, 784 sq. ft.
Sold: 09/27/07 $421,601
Sold: 06/17/11 $75,000

and...

Here's a fully furnished 958 sq.ft. penthouse renting for $1150:

http://lasvegas.craigslist.org/apa/2998652719.html (broken link)

[logline]

LV2NDHOME: I actually agree with you on most of your concerns... but then again, that's why you can pick up one of these luxury units for as low as 17 cents on the dollar. (See post above)

As for the rental units, as recently as the last board meeting 2 weeks ago, there are plans to eventually sell those units when the market turns. I got that from someone who was at the meeting as I couldn't attend personally. The only issue of course is timing. It may take several years, but I'm not going anywhere because even with renters, the complex is still a nice, quiet, safe place to live. The selling of those units will only increase my value in the future. 47% of the units are already owned anyway.

By the way, the position of the pool/clubhouse is no more inconvenient than any other community, even if they never build the other buildings. But yes, you're right that there are never any guarantees what people build on land surrounding you.

[LV2ndHome]

Originally Posted by logline

...but then again, that's why you can pick up one of these luxury units for as low as 17 cents on the dollar.

Yeah, that's exactly what caught my eye at first glance and made me take a closer look at the possibility of buying some units there, and actually it's still kind of on my watch list.