Rental Market Situation

Most of the investors I work with are buying single family homes priced under $250,000 in the best areas of Las Vegas and renting them with an eye towards appreciation over the next 3 to 5 years. Even a year ago, such properties did not exist. Thanks to the over supply and the sub-prime debacle, there are great deals to be had if you know where and what to look for. I have the experience, software and processes to consistently locate such deals and bring them online. See My Process for specifics.

There is a shortage of rental properties and, with the number of jobs that are going to come online on the next few years, the shortage is going to get worse. Already, this shortage has driven up the price of rental properties. Below is a comparison of residential rental rates for 2006 vs. 2007.¹

Average Monthly Rent Rates 2006 vs. 2007

Median Monthly Rental Rates 2006 Vs. 2007

I expect this trend to continue into the future due to the number of large casinos opening in Las Vegas. In the next two years, approximately 25,000 more hotel rooms will be added to Las Vegas.² This will require thousands of additional employees and they need to live somewhere.

Another factor that will drive up rental prices is the limited amount of buildable land in Las Vegas. According to USA TODAY³, Las Vegas is running out of fee simple land, and all available acreage may be gone in less than a decade at the current pace. Las Vegas is projected to add more than 1 million residents in the next 10 years and hit 3 million by 2020. Today there is only about 35,000 acres in all of metro Las Vegas available for building and that is being consumed at a rate of 6,000 to 7,000 acres a year. The rest of the land surrounding Las Vegas is either federal or state owned land. In fact, only about 11% of Nevada is available for private ownership. So, with the end of raw land nearing, the price for land continues to increase even in today's market making most of it too expensive for most buyers. This land shortage will also put pressure on the rental market.

If you are considering investing in Las Vegas real estate, call me. I will save you money, time and risk.

Sources:

1. Greater Las Vegas Association of Realtors (GLVAR)
2. Convention and Visitors Authority
3. Appraisers of Las Vegas
4. Understanding The Eviction Process
5. Nevada Title

Eric Fernwood
702-358-8884
Eric@ISellLVHomes.com