Las Vegas and surrounding areas

[Ryan Beesley]

Hi everyone,

My name is Ryan and I am new (1 month) to Bigger Pockets. I would first like to thank everyone for this amazing website and all the information that has been gathered. A true community of likeminded people with a similar goal under the umbrella of RE.

As mentioned I am new to bigger pockets and real estate in general. At least from the perspective of viewing it as a long term investment. My wife and I have owned before, sold, and made a little money in the Southern Oregon market, so we have been in the market before but our knowledge is still very limited. Enter Bigger Pockets!!. Since joining BP we have read so many success stories from people that we can relate closely to and been inspired to really take control of our short and long term future and begin to get out of the rat race. To us, RE makes perfect sense. We have since moved to the Las Vegas area (via Oregon and originally from New Zealand) for work and are looking to start our journey and purchase our first income rental property. 

In the short time we have been in the area (3 months) we have done our due diligence looking at difference areas, properties and talking with some agents. However, I would like to get the opinions of members for the BP community on the Vegas market? My eyes tell me there is a lot of construction, a lot of commercial, residential and apartments/condos being built at a fast rate. Vacancies seem to be low (good thing for rentals?), the Raiders moving to town and the effect that might have? (as silly as that might be), the price of housing is quite high? (after talking with locals and their perspective over the last few years). With this being said we are excited to begin the journey in acquiring our first rental. 

As mentioned we are very new to this space and are open to any and all ideas. With such a world of knowledge throughout this website and podcasts there is no excuses! Thank you for listening to my rant and my apologies if the topic on Vegas has been bought up before.

Cheers everyone!

Ryan

[Stephan Kraus]

Hey Ryan, welcome to BP and hello from a fellow Sin City Resident! I own two SFR in Vegas that cashflow nicely, however those were both BRRRR properties - with the exception that i have not cash-out refi'd on the equity yet - We picked them up below market and fixed them up with s small contractor team. We also own our personal residence, that i eventually plan on renting out too. All properties were bought in the last 3 years, and we've been watching the market development closely ever since.

Most properties do not make sense as rentals anymore in my personal opinion, due to the low possible cap rates. Unless you find something significantly below market price and do a rehab - which becomes harder and harder too, as even most distressed properties are listed for what they would be worth in good condition. 

That beeing said, i personally believe that the growth that Vegas has experienced in the last few years is slowing down pretty quick, and will likely stagnate if not decline in some areas in 2019. Inventory doubled since Q3 2018, and even though thats still only a two month supply and therefore considered a sellers market, i see the houses that are listed for top dollar sit on the market longer and longer again, or dont sell at all. Also, net mortgage rates are climbing slowly but steady, but the income doesn’t grow at the same rate entry level home prices have been climbing, and therefore disqualify a lot of potential buyers, which again wil reduce demand.

Yes there are factors that justify the growth spurt to continue, and i personally hope they do, but i think those factors will not affect the overall local market in a significant way. 

Find and Analyze as many potential deals to get a clear image for yourself, the AirBnB tip is dangerous, as that should never be your first strategy, especially in a market like vegas, where STR is heavily regulated and lobbied against by the hotel industry. Licenses are hard to get, and if you, do fees and extra taxes as well as turnover costs are going to be factored in too. If you cant make a deal work for regular rental, pass on it :)