Some people use what is called the 50% rule also. This is where you take the yearly rent collected and divide it by 50% for all expenses, repairs, and vacancies. Now that prices in Vegas have gone up considerably over the past few years this estimated 50% is less conservative but still a good rule of thumb. I would dig deeper into the fixed expenses once you have an actual subject property.
Right now in Vegas after calculating all of these costs you can typically plan on getting around 4- 5% CAP rate on your money. We work with a lot of investors here in Vegas. If you would like to discuss the market or your investment plan further please feel free to contact me directly. Either way best of luck with your investments!
Licensed Real Estate Broker in NV, MA, & RI
NV Broker/Salesman at The Adams Team at Rothwell Gornt Companies
MA & RI Real Estate Broker at Sankey Real Estate
John A. Brassner, MBA, REALTORÂ®
Residential â–ª Commercial â–ª Business Sales
Prudential Americana Group, REALTORSÂ®
10777 W. Twain Ave #333
Las Vegas, NV 89135
In general, I plug in 4.5% a month for upkeep and repairs. In addition, if the rugs, Air Conditioning, appliances, roof, exterior painting - may need replacing/repairing in the next 10 years, I calculate a cost for those and divide that cost by 120 and that gives me my "known upcoming repairs" monthly allowance to add. This is over and above my 4.5% maintenance figure I already have plugged in.
There are many ways to enhance your profits, and minimize your expenses - John Brassner alluded to one - a home warranty.
The best way to ensure profitability is to buy it right to begin with, and that is getting increasingly more difficult. Good Luck
I used to think that purchaing a new home was the way to go because of the builders warranties, and I still do agree that there are a lot of wonder perks to buying new. But with the way our Las Vegas housing market it right now. So many of the home for sale are the newer homes. Which most of them have been left unattented for months and even years. There are so many things to consider when purchasing a place here in Las Vegas.
Penny O'Brien with Simply Vegas
David Cooper! Las Vegas Bank Owned Foreclosure Investor
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I like to find out who the builder of the home is. The best selling builders seem to make a better product.
The price difference between a 1960's home and a a home less than 6 years old is Not that great in Las Vegas. And logic tells me that 1960's home will not be as appealing to a first time homebuyer when I want to sell.
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