Has Las Vegas Priced Itself Out Of The
Investor Market?
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In 2002, a four bedroom house in Las Vegas could be
found for $150,000 and rented for $1,100 per month. That
was just enough rent to cover the mortgage, property tax
and a month of vacancy each year. In 2005, that same
house would sell for $250,000. From a cashflow
perspective, the rental market has not kept pace with
the home prices. You would still be able to get
$1,100-1,200 per month in rent, but that won't
completely cover the mortgage unless you put down a
large downpayment.
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So, is Vegas still a good
investment market? If you can handle some risk and some
negative cashflow (or bigger downpayments), it still has
promise. Las Vegas is one of those rare metro areas in the
United States where there is a good demand for real estate
and a finite supply. There are currently 1.5 million
residents, and a net increase of 7,500 more each month. Las
Vegas is located in the bullseye of the national sun-belt
migration pattern. Retirees are heading to the sun and the
fun, and enough jobs are in Las Vegas that the working class
finds opportunity in the desert too.
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The beauty of Las Vegas is the land ownership. The city
is surrounded by government land, military bases and
mountains. The government will continue to release land
until approximately 2012, at which point all the land
will be consumed. The result is that Las Vegas real
estate is surging. Big time. In June of 2004 the Bureau
Of Land Management auctioned a 1,900 acre tract of land
for development. The expected sales price was in the
$280 million range; it was bought for $555 million by a
collection of very optimistic home builders. You can bet
that they have a plan to get that money back out in the
form of increasing home prices in the coming years.
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So long as terrorists ignore
sin city and the southwestern migration patterns hold up,
Las Vegas should continue to outpace the national average.
The days of Las Vegas being king of cashflow AND
appreciation may be over, but if you are looking for a pure
appreciation oppurtunity, Las Vegas may be your best play.
Join the Cashflow Property Network to make the most of this
information and other opportunities around the nation!
Courtesy of the Cashflow Property Network
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Vegas Real Estate News Articles
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