Las Vegas Rental Decision

[Glen Sonnenberg]

All,

My wife and I have a rental property in NW Las Vegas which I have been renting to my sister and her family. We purchased the house (4br/2.5ba) in 2010 as a short-sale for $142k (25% down on a 15-year fixed at 4%). We did the 15-year mortgage to pay it off quicker rather than cash-flow. Anyway, after renting it for 3+ years, they are now considering leaving the area. Because it was my sister, our expenses have been reduced in terms of property management and other costs. If they move I'm sure these costs will go up as we live in California. We current have the rent at $1250 a month. It's possible that could go up a bit but I'm not sure. I got a recent estimate of its value at just under $200k.

So, given the above, we're trying to decide if we should simply continue renting the property out or perhaps sell it and invest the profits in another area. Anyone have any thoughts on the current and future prospects for rental properties in Las Vegas? We probably don't have to make a decision until this Summer but I'd appreciate hearing opinions.

Glen

[Gerald Harris]

I was born and raised in Pomona, CA. We would go to Vegas quite a bit. When I was an real estate agent in California the 1 thing I saw was a great opportunity in purchasing real estate in the Las Vegas Market.

When Considering renting you should

- Contact a several local management companies and real estate agents in the area to see what rents are going for out there

- Also consider the expenses associated with the property (cost of upkeep)

- also, are you going to manage it or will you hire a management company? They typically run 7% to 10% of the gross rents.

- After your monthly expenses and your mortgage payment see what you can cash flow every month. If it's a nice amount you feel comfortable with then rent it. if not, then consider selling

When selling your should:

- Contact a local real estate agent in the area. Preferrably the "super star". Someone who is strong and can get the deal done

- Interview them. Remember, they work for you, you don't work for them.

- Have them pull comparable sales in the area within the last 60 to 90 days to get an estimate of value.

- If this number looks attractive after your closing costs and agent fees, then sell it. Sellers have a lot of tools now a days with the influx of the internet.

Good Luck on your decision!