Home Buying in Las Vegas>Question Details

Jim,  in California

Are condos good investment property?

Asked by Jim, California Mon Jan 19, 2009

Someone told me that it is possible to purchase a 2/2, 900-1000 sf condo in overall good condition and in a safe neighbourhood in Vegas for as little $50K and the condo can fetch ~$800/month in rental income. Can people on this board confirm if this is true? What are the cost I should be aware for buying a condo as an investment property? Thank you.

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Anyone looking to regain the appreciation they lost on their homes during the correction over the last 18 months is going to have to wait awhile, according to Scott Dugan, one of the leading appraisers in Las Vegas. Dugan says the local housing market is about to be hit by another wave of foreclosures — possibly three to four thousand — that could send prices spiraling down even further. Fannie Mae and Freddie Mac have had a moratorium on foreclosures that lifts at the end of January, he says.”

“‘We are going to get hit with another wave of listings that may, in turn, drive down the market further than where it is today,’ Dugan says.”

“One market that investors are no longer pursuing is condominiums, especially the condo-hotel market, Dugan says. ‘That market is gone,’ he says. ‘It used to be a nice market, but not anymore. Financing has dried up.’”

“Units at the MGM Signature, for example, have fallen 60 percent to 70 percent in value for anyone who purchased them in 2006 and 2007, he says. Residential condominiums have fallen 40 percent to 50 percent in value in the last two years and that market is still falling with no end in sight, he adds.”
0 votes Thank Flag Link Sat Feb 7, 2009
Hi Jim -
The condos in my neighborhood are pretty close to what you describe. Go to realtor.com and search the 89142 zip code - then take a look at the units on Juniper Hills Blvd. I've lived here for 5 years now and I consider it as safe as anyplace else in Vegas, with average, working class residents made up of both owners and renters. Most of my neighbors have been here as long as my wife & I have. I believe some of the units in this zip code rent for around $750-$850. The HOA fee here is $166/mo. There are currently 18 units for sale in this HOA ranging in price from $39K (!) to $110K ... a pretty wide range for condos that are all in the same complex! Mine's in great shape, but I can't afford to sell for anywhere near what some of the bank-owned's are priced at. Chances are, the price reflects the condition - but I keep hearing about these incredible deals that are all over Vegas right now. Sellers are, as Gene stated below, becoming more desperate by the day. Why, they're even willing to promote neighboring foreclosures just to get them off the market! :) Good Luck!
0 votes Thank Flag Link Fri Feb 6, 2009
Good morning Jim,
In my experince yes condos are a good investment many folks are downsizing and looking to rent condos in areas close to the strip.
Las Vegas is a wonderful place to live and work. There are many Communities that fit your investment needs. I work with many clients that work at the Venetian Hotel and other Hotels around Town some clients look to rent some wish to own property.
I have a condo that I will be listing in the spring with great renters in place.
In fact yesterday the owner and I met with the renters to let them know that the condo will be up for sale in the spring. They showed a desire to stay.
Perfect investor situation with good renters in place that pay on time and take care of the condo.
I would like the opportunity to send you information on investment properties around town along with community information.
Best of Luck to you
Helene M Moore email: helenem@windermere.com
Web site: http://www.MooreVegasHouses.com
0 votes Thank Flag Link Wed Feb 4, 2009
Let's look at simply your question regarding sq. ft. and price and the overall good condition. I would have to say using that criteria I haven't seen condos that rent for 800/month. So then let's throw in the criteria you mentioned of a safe neighborhood. This is something that an agent cannot legally steer you toward. I have found that even if I was allowed to do this, each client has a different perception of what safe is relative to where they are presently living. You will be able to determine after looking at different areas, where you feel safe. Then remember as an investor if your goal is to find something that pencils out, others for financial reasons may have to live in areas that you wouldn't live. This helps you understand why safe is a subjective critiera. There are many other questions to look at before you purchase an investment. Hopefully, you have a good agent who will take the time to sit down with you and listen to what you are trying to accomplish with an investment. Another cost thats need to be considered are association dues and what they cover. One thing for sure, we are presently in a market that you can cover a great deal of your expenses in the rent. One transition that has taken place is condos are being purchased by savy investors, so some areas you see multiple sales that are cash sales. This has resulted in an increase in rentals on the market, which then results in a decrease in rental prices. Still it is a great time to purchase. You might even decide that you could purchase a single family residence with desert landscaping in your price range. You can check out my website below and look at about the area. There are several good links under that category to give you information. Give me a call, I'll be happy to help. Marilyn (702) 348-7146.
0 votes Thank Flag Link Mon Jan 19, 2009
First, condominiums are shared ownership. Because you are in "partners" with others, and, as to new properties usually the developer, this can be either a good thing or a bad thing. A distressed condominium association is generally not a good thing, in my opinion. You will not have the ability or access to the funds to change the nature of the overall property. Be that said, a going strong condominium may be an excellent investment. Some of the most expensive valuable and prized real estate in the US are shared cooperatives in Manhattan.

Second, the rental market is sophisticated because it is occupied by multifamily companies managing massive apartments. They offer move in specials and all sorts of tricks that really dont fit the individual owner landlord. They also have experience in everything from evictions, tentant evaluations, deaths on the proeprty, fair housing, maintenance and all the other many issues a landlord faces.

My suggestion is find a property in one of the best neighborhoods to take advantage of this downturn. You can rent homes as well as condos.
Web Reference: http://www.reserrealty.com
0 votes Thank Flag Link Mon Jan 19, 2009
It really depends on wheather your tenant is paying the complete mortgage fo you. I would rush into a property with negative cash flow position. All the facts should be readily available thru a local broker.
Web Reference: http://www.RemoRealty.com
0 votes Thank Flag Link Mon Jan 19, 2009

With the rental market being flooded the problem may be finding a renter willing to pay the $800 monhly fee. Our advice is to get the facts you require from the people working directly within that portion of the industry.

Get in touch with several Rental Management Companies for their feedback on rentability in he Las Vegas area.

Good luck
0 votes Thank Flag Link Mon Jan 19, 2009
Hi Jim, it is possible. What eats into the cashflow, however, are the condo association dues (HOA dues). Nonetheless, some condos could be very good investments. If you would like me to work the numbers with you, give me a call or email.


John A. Brassner, REALTOR, MBA
Windermere Summerlin
0 votes Thank Flag Link Mon Jan 19, 2009
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