Home affordability has surged in recent years, so much so that rents are now beginning to rise (though we should caution, steadily) in Las Vegas.
Southern Las Vegas has experienced the greatest surge in this respect, though the north is not falling too much behind. Statistics show that, in 2011 alone, investors accounted for over one-quarter of property sales nationwide.
This burgeoning statistic can be explained on several fronts – many of which we will assess over the course of this blog. Now, however, we’ll take the time to understand the process of becoming an effective landlord in Las Vegas – beginning with, of course, the nature of the work.
Think of it as a job
Managing property is a part-time job – there’s no two ways about it. In order to extract the maximum possible profit, the property must not only be maintained to the appropriate standard, but also injected with the highest quality tenants. There’s little point becoming a landlord unless the investment is nurtured in the right direction.
Of course, there are alternatives. If you’re not the type of hands-on investor that property demands, you could always turn to property management companies in Las Vegas. For example, real estate firms can offer full-service property management – meaning they deal with everything from maintenance and rent, to tenants and complex legal matters.
Features of the property
It’s not enough to want to property manage, you have to do it property, too.
This means understanding the market and location of the property. Know the average market rate for a property of your type (and try to calculate the capitalization rate, too), and figure out whether that property will accrue an income that meets your needs. There’s little point investing in a property that doesn’t deliver the return you expect.
Second, think about location. Locations with low unemployment will have more consistent renters than locations with high levels of unemployment. Other regions may have a high degree of home ownership, meaning there’s little desire for a booming rental market. These factors can help you choose a location that optimises rental prospects, value, and income.
Don’t only think about price
As with many investments, price shouldn’t be the only factor guiding your purchase.
As we’ve implied from above, a more expensive property – given its location and market potential – has greater income potential than a cheaper property with disappointing location and market expectations. While price must remain a factor in your decision, it should be considered one among many when finalizing a prospective investment.
Also, think about upfront costs. Investment properties are associated with greater down-payments – and these costs must be affordable. In addition, you may need to demonstrate to a bank, for example, that you have the requisite long-term funds to deal with the cost of the mortgage in cases when you’re not extracting a sufficient income.
Becoming a landlord in Las Vegas needn’t be difficult. As with everything in life, all it requires is preparation. Know what the role involves and know the factors that underpin strong income potential. Don’t focus on price, and think about streamlining the management of the property using real estate firms. With this advice, you’re one step closer to becoming a landlord.