Many of the potential clients that contact me are looking to take advantage of the “below replacement cost” real estate in Las Vegas. Rather than get a less than 2% return on their money in the bank, investors are looking for something safe but with a potentially higher rate of return. The current cost of building is somewhere between $80 and $100 per square foot. Many homes are listed in the Valley for under $70 per square with a full handful under $60 per square. From my point of view this is like buying gold for under $1,200 an ounce! But….you have to be careful and make good choices. The investment is a looser if it sits vacant!
I spoke with our property manager at Better Homes and Gardens (BHG) this week along with a couple of independent managers about the current rental market and investment opportunities in Las Vegas and Henderson. BHG has a strong demand for rentals. I believe this is based on two important assets. First, BHG is part of the Cendant companies which gives it great access to relocation referrals. Many companies including the US government use Cendant to refer relocations. Second, the property manager, MaryAnn Griffin, is tough and aggressive! All three managers that I spoke with had basically the same investment tips for a successful investment in today’s market:
1) Pick the right area. No matter how great the price if the area is not desirable no one will want to rent! If you are looking to rent to families you should educate yourself on the schools in the Valley. Click HERE for access to Clark County School District Accountability Report for 2010/2011. Pick a home in areas you would want to send your kids to school.
2) Bigger is better! Rooms that is. The more rooms in the home, the faster it rents. Renters like 4 and 5 bedroom homes. Very few potential tenants are looking for two or one bedroom properties. Therefore there is a glut of 1 and 2 bed homes and a demand for 4 and 5 bedrooms.
3) Rental rate. Try not to be a pig. It is easy for a Realtor to tell you the range of rents in any given area. Price your home where you get a good return but are not the most expensive rental in the area. Instead of reaching for a 15% return try closer to 8% to 10%. Remember you also have the appreciation up side when the market turns. Keep in mind your return should be net so include any taxes, utilities, HOA, and property management fees in your calculations.
With good research and a good Realtor, like me, you can maximize your investment while you wait for future appreciation on value. What a great combination for a winning investment! Call me and put me to work for you today!Tweet