[Jalhop]

Seems to me it's mainly a rent pricing issue. The OP didn't say the rent is $800 a month, just that $800 was lost. As house prices fall so will rents, because later buyers can make a profit on less rent. Interest on my cash has fallen ~90% in the last 3 years. If I can make so much as $100 a month net on an $80K investment (that I'd live in myself eventually) I'd be okay with that. Heck for the right tenant I'd accept $0. Those would be my instructions to the property manager.

As someone else noted, soon the hedge funds will be buying houses in LV in bulk. That should stabilize house prices and rents somewhat (like it seems to have in Phoenix). But anyone who bought 2+ years ago may need to take a monthly loss to get a decent tenant.

[jim rose]

i have 7 houses rented in l.v...and never a problem renting them...it may take 3 weeks to find the gold standard renter but w/ a fair price i always do and i have them sign a 2 year lease so i dont have to deal with it as often...what ive noticed in the past year and what is totally under reported is that 10k baby boomers are retiring every day..they dont want to go where there parents did ie,phoenix and florida as much..they are coming to vegas at a very high rate..i buy 3 bdrm homes in a safe areas summerlin and the lakes with hoa at aprox 50 a month...this new breed of retired dont seem to want to live in a retirement community these days...i have no empirical evidence to support my anecdotal findings..its just what ive experienced...i never buy 2 story homes (old people dont like them)...i run retire in vegas rental listings on craigs in california and utah

[TheGreatCurve]

Originally Posted by WestieJeff

So let's figure this out, last week the scare was that there won't be any foreclosures because of MERS and the bank paperwork issues. This week there is going to be so many foreclosures turning into rentals that it's going to kill the market.

Investors and hedge funds are there to make a profit, obviously that is much easier when you buy at a discount, but you think they're going to just flood the market with rentals? Even the banks have learned to gradually release their foreclosures to keep market pricing from tanking.

The RE threads are always filled with either total doomsdayers (who I assume mostly don't own property and want to, so they want prices to drop) or total optimists, which probably own property and/or rentals. Rarely is there any balance.

Personally I know many people with rentals. All of them are occupied. Nobody has complained of months long vacancies. I do see that the market could be reaching saturation, but that's just speculation at this point. When my co-worker's rental (in summerlin) goes up for rent, he gets 2-3 calls a day at least. I know because I go to lunch with him and those are the calls he gets at lunch.

I think another reason there are fewer foreclosures hitting the market right now (other than the paperwork issue and the new AB284 law), is that the banks are purposely hanging onto most of the foreclosures for now in anticipation of bundling them and selling them in bulk to the big investors.

The strategy of these investment funds is to buy these foreclosures dirt cheap and then earn money off of the rental income. Obviously, the cheaper they can buy these properties, the higher their ROI. I believe they plan to keep these properties as long-term rentals (just like apartment communities) so they plan to continue earning a return on their capital from the rental income streams rather than counting on any appreciation on the properties themselves. So just like a newly built apartment community will rent out all the units that are vacant, so will these investment funds because the return to their investors is based upon the total monthly rental cash flow. Thus, they would rather rent out 100 houses at $1,000/month and earn $100,000 in positive cash flow per month than hold back and rent out only 50 houses at $1,200/month which will only net them $60,000/month. They are looking to maximize their total return on invested capital as soon as possible so they can show their investors a high rate of return quickly, which will allow them to raise even more money to do the same thing. Vacant houses which lock up their capital and not earning any return is not in their best interest.

[Jalhop]

Originally Posted by TheGreatCurve

Vacant houses which lock up their capital and not earning any return is not in their best interest.

Yep, and vacant houses attract squatters or worse. The hedge funds will be counting on rents stabilizing at a profitable level all things considered. Part of their strategy may be to drive rents down further to encourage more people to walk away from their mortgages in the short term, so they can buy more cheap houses.

[Atlas1337]

Be realistic with your expectations and let the management company pick the rent price. Homes should rent within 1-2 weeks. If they don't, there are plenty of other management companies out there. Don't be afraid of Section 8.

130k seems high for a 3 bed. Go for # of bedrooms. Section 8 pays based on number of bedrooms. Pools are a gamble. They bring in more rent but increase maintenance costs and liability. Personally, I don't touch anything with an elevator or pool.

Enjoy.

[papatoony]

What do you guys think makes the best income investment in LV: Houses or condos? Obviously SFH's cost more upfront, but condos have HOA fees that will slowly bleed you over time. So what are your thoughts? I go back and forth on this.

[von949]

Originally Posted by papatoony

What do you guys think makes the best income investment in LV: Houses or condos? Obviously SFH's cost more upfront, but condos have HOA fees that will slowly bleed you over time. So what are your thoughts? I go back and forth on this.

From what I have seen in the past few years and experience, section 8, SFH, near a convenient bus line is the easiest to rent out and make a profit. Just have to know how to handle the sometimes rowdy tenants.

A 4-plex will do even better.

[eventusstultorummagister]

I’ve followed Las Vegas closely because at these prices, it is hard not to consider purchasing for investment. But the macro trends still don't appear favorable. Obviously you need people with jobs from businesses and commercial property isn’t doing well either. Office property asking rent is down 30% and retail property down a whopping 44%. The truth is rents are FALLING.

With 50-70% of purchases being all cash and most of the properties entering the rental market it was only a matter of time and now with the hedge funds entering the picture with huge portfolios the smaller investor is going to get squeezed hard.

If I had a rental property I would be concerned.

[dynimagelv]

Originally Posted by von949

From what I have seen in the past few years and experience, section 8, SFH, near a convenient bus line is the easiest to rent out and make a profit. Just have to know how to handle the sometimes rowdy tenants.

A 4-plex will do even better.

a friend of mine rented her houses to Sect 8.....as part of the qualifying interview she required the MOST RECENT report card from EACH of the kids.....if their grades sucked they didn't get the house.
She said she had NEVER , 10 years of renting, had a problem.

[von949]

Originally Posted by dynimagelv

a friend of mine rented her houses to Sect 8.....as part of the qualifying interview she required the MOST RECENT report card from EACH of the kids.....if their grades sucked they didn't get the house.
She said she had NEVER , 10 years of renting, had a problem.

I would not mind using this as one of the qualifications but my wife is against it. She claims that its not fair to the parents. Maybe in the near future she will come around.