patrick.net

tjb says

What does the rental market for a unit like this look like? I have read lots of very negative info about the market in this city - will something this low continue to lose equity?

I would focus on the first part of the question. Look at what similar units rent for - try to pick up on recent trends. How many rental units are empty, etc?

If you determine that renting would give you a good return (big if!) then I wouldn't worry too much about future price changes. There is nor reason for the price to go lower if at the current level they give you a good return as an investor.

Also make sure to look into association fees and the economic status of the association.

Check out 1. vegas unemployment 2. vegas rents 3. home owner association fees.
I've never been to Vegas so I have no idea how good/bad that location is.
As a comparision, if you buy Vanguard High Yield Corporate Bond Fund you will get about 5.5%.
e.g. $50,000 x .055=$2750 per year or so. No fuss but not much dough.

How much is the HOA fees?

Hi - HOA fees are about $150 a month. Looks like the units are renting out for about $750 in the area.

Haven't checked into taxes or insurance yet.

That might be a bit risky? With $150 in HOA, you only get 600 bucks a month. That is assuming it is fully occupied. I suppose you could get a good tenant, but otherwise, after mortgage and taxes, the profit margin will be rather thin?

I moved from SF to LV 16 months ago as I travel a lot and work from home. With the crazy low prices, I have been kicking the tires on buying instead of renting. I live in a very nice complex (Tuscan Villas) on Hacienda at Decatur. My rent for a 1-1 is $650. I can easily buy the same unit for $40,000 in the same complex. This is 700 sq feet with granite and the whole deal.

The monthly math:
$150 in condo fees.
$50 in property taxes. (I think these might be going down).
$100 in monthly interest lost on my $40,000.
$100 in random maintenance.

Even with the $250/month savings, I could not be bothered. As an investor, you will have 1-2 months per year vacancy given the crazy amount of rentals on the market. EVERY unit I looked at when I moved was vacant and many had been on the market for 4-6 months. This is in the $600-$700 range for a very nice one bedroom. If the unit is not very nice, I wouldn't enough think about investing.

e.g. Buy Vanguard High Yield Corporate Bond Fund.
$48,000 x 0.055 (5.5%)=$2640/year or about $220 cash wired every month into your bank account if you want it.
Selling the fund to buy something you need: takes minutes, money sent into your money market fund in a day. That's a "liquid asset".
Condo? Good luck selling it when you need the money fast.
OR:
Buy AAPL and wait 1 year to make 20-30%. $48,000 x .25=$12,000

Or, 50/50 High Yield Fund/Apple stock.

$19,000 1-1 off topaz
http://www.lasvegascondomania.com/info/displayCondo.php?mls=1240561

$22,000 1-1 off LV Blvd South
http://www.lasvegascondomania.com/info/displayCondo.php?mls=1190826

http://www.condo.com/ForSale/United-States/Nevada/Las-Vegas-Condos/Summerlin/Desert-Shores

http://lasvegas.condo.com/ForSale/United-States/Nevada/Las-Vegas-Condos/The-LakesCountry-Club

Rainbow is no longer the dividing line into the good areas. Go West, Young Man. And rent.

Hi,

I found out some more info and wonder if this really changes anything.

The HOA is $228 per month
3BR/2BA
2451 North Rainbow Blvd
Mountain Creek Subdivision
Taxes are about $250
Rents in the area vary from $700 to $800 per month

what do you think?

Taxes are $250 per month? Plus HOA $228? Rent of only $700?
$50,000 out of pocket to produce a couple hundred bucks into your pocket every month?
Send it to Vanguard and High Yield Corporate Bond Fund which will make the SAME money per month (5.5% x $50,000) with no hassle. The interest is wired directly into your checking account.
The only way to make this whole thing really profitable for you is if you 1. inhabit the condo 2. get some hot young roommate with you.
That way you are saving money and getting chicks.
I still recommend the Vanguard approach.
FYI, if you bought some AAPL last week for $50K, you would be up about 4 months rent worth already.

I'm sorry - got the taxes wrong - they are $450 per year, so about $40 per month.

If you want to keep it simple, don't buy anything that is not in Henderson, Summerlin, or Spring Valley. North Las Vegas and East of the Strip can be scary.

My landlord is cash flow positive, so it can be done. I just think you would need to do it for a bunch of units to make it worth your time and energy.

puff2003champ,

Are you familiar with the area I listed? If so, what is your opinion of it?

tjb says

Are you familiar with the area I listed? If so, what is your opinion of it?

I'm sitting in a house just spitting distance from the 2000 block of North Rainbow. The "bad" areas that used to be on the other side of Rancho Drive are now indistinguishable from the "good" areas. I park in the garage when I'm here, the neighborhood is safe enough to live in if you keep your doors locked, and both your big dog & gun locked & loaded. I'm not exaggerating.

Don't even consider buying anything unless it's on the far side of Buffalo - Durango is better. IMHO, of course. I should mention that I drive all around LV several days a week and believe that I'm fairly informed.

Buying on Rainbow & Smoke Ranch is throwing your money out the window. But feel free to drive down the 2000 block of rainbow and toss the money out the window there - I'd be happy to catch it for you.

I can't really comment too much on anything North of 95 as I am too scared to head up there. I live in the Southwest and walk at night to The Orleans without worry. I haven't noticed any kind of gang activity or imminent threads of any kind.

I looked at plenty of condos, but chose this one due to a short drive to the airport, 10 minutes to the strip, and what seemed to be a reasonably safe area. There were plenty of nice ones way West towards the 215, but that is just a pain in the ass.

puf2003champ says

$100 in monthly interest lost on my $40,000.

Excuse me but how are you getting $100 per month from a $40, 000 investment? Thats like 3.5 percent. It cant be in the bank

However rainbow/smoke ranch is close to a trader joes and whole foods. There are not man of these in Vegas, these are the only ones I could find.

KILLERJANE says

However rainbow/smoke ranch is close to a trader joes and whole foods. There are not man of these in Vegas, these are the only ones I could find.

Yea - but not close enough to make it worth buying. Unless they give the condo away and pay you monthly to keep it.

Tjb, Did you buy the condo? I know there has been rising prices lately.