The Las Vegas Real Estate Investing Blunder
In 2005, real estate investors nationwide purchased investment properties in Las Vegas. Investors came from Texas, California, Florida, Oklahoma, Louisiana, and other places. Many of these investors made millions because of the appreciation in such a hot market.
On the other hand, in 2005, many beginning investors lost their hard-earned investment capital or hardly made a profit because they failed to do their research on Las Vegas real estate market and trends.
If you're and out of state investor thinking about buying investment properties in Las Vegas, beware of the following:
"These costs are normal in Nevada!" You may encounter higher closing costs such as expensive surveys on commercial properties and vacant land. Other costs include transfer fees, taxes and insurance.
"You can't lease this property out!" It is becoming more and more popular for new home builders and various Homeowners' Associations (HOA)s to forbid property owners from leasing their investment properties. Often these restrictions get passed without the investor even being notified. Make sure you read the fine print to see if any clauses do not allow rental homes. To keep the value of the neighborhood up, home builders added restrictions requiring the buyer to live in the house as a primary or secondary residence.
"This house will only rent for $750 per month, not $1200!" In 2005 large out of state investment groups inflated the lease income by selling their Las Vegas properties to local investors. Because so many homes were purchased in a limited area by investors, a rental excess lowered the expected income. This created hardships for investors who suddenly had to pay out hundreds of dollars a month instead of making a handsome profit every month.
"You can't sell this home, now!" The investors that couldn't lease their investment properties decided to sell. In alot of cases it was because the property appreciated greatly while it was being built.However, many investors were very suprised when they were told they couldn't sell the property within the first year after buying. Alot of developers are making restrictions prohibiting real estate investors from making a quick-turn in their investments. This is a fad that is becoming increasingly popular.
"Houses don't appreciate 30% per year!" Perhaps you've attended or been invited to a high-power real estate investment seminar that promotes out-of-state real estate investing. Several of these investor clubs really are promoters who receive kick-backs in real estate commissions, property management fees, mortgage loan fees, and even fire insurance premiums. They tell myths of large appreciation gains, which are likely true. Nevertheless, not all areas see significant appreciation year after year.
Don't make the costly mistake of not totally researching the complete market customs and restrictions in the Las Vegas area. If you can't afford to go check out the area in person, point out another area that you can visit.
The author, Roy White, and his wife, Shirley White, have been selling real estate in the Las Vegas area for over 28 years. They are also investors. Any questions or comments, please email them at century21white@aol .com or call toll free (866) 374-3444 .
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The Roy and Shirley White Team
CENTURY 21 Aadvantage Gold
5041 N Rainbow Blvd
Las Vegas, NV 89130
Direct Line 702-610-4270
Toll Free 1-866-374-3444
Fax Line 702-309-4483
Each office is independently owned and operated
