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I love watching the news and following recent media reports regarding the Las Vegas property management industry. This particular news article is telling everybody what we have been feeling for nearly a year now. The large institutional investors have essentially pulled out of the Las Vegas real estate market. This large group of investors has skewed the market, but we are finally returning to a traditional marketplace.
So what does that do for you? Whether a typical real estate investor or simply a first time homebuyer looking to buy into the Las Vegas real estate market. For investors, the old adage location, location, location was the key to a good purchase. While this is true in numerous ways, being advised by a typical real estate agent that does not have extensive Las Vegas property management knowledge, is worse than not buying in the right location. One of the major items to look at when buying an investment property is the true acquisition cost. Too many first-time investors don't truly analyze the total purchase price of a home. Since buying a distressed home has many unknowns, a good Real estate agent with extensive property management knowledge, and is currently working with or in a property management brokerage, can help evaluate your acquisition. Some points to consider, which could be separate blogs each and of their own, this is designed to help assist with both future acquisitions, and current Las Vegas rental properties.
Upgrading or installing better flooring! This is one major item that will continue to cost you money over the life of your investment. By installing carpet, especially low-end carpet, an investor will continue to replace this item every few years. My personal suggestion, coming from managing over 4000 homes in the last 10 years, is install nice larger porcelain tile throughout the home, except the bedrooms. Plus, make sure you pick a darker grout color, and seal it.
Install hard surface countertops. The cost of granite has dropped significantly, but more important is understanding that Granite is priced based on its color complexity. Many times with basic granite, like the samples you see outside of Home Depot, can be installed for just a few thousand dollars.
Switch out your landscaping too low maintenance and turf if applicable. Not only will you have ongoing battles with your homeowner association regarding Dead patches of grass or overgrown areas, the cost of maintaining the yards can eat up roughly 5 to 8% of your annual returns. The marketplace has changed, residents don't own lawnmowers, and marketing your property with "landscaping included" really gets the consumers attention.
While these three items may seem costly, typically they can all be done for roughly $9 to $12,000 combined on a typical Las Vegas rental home. If you analyze a $12,000 investment over 20 years, you're only spending $50 a month, or $600 annually. This amount is equivalent to replacing your carpet every five years, which is typical in the rental property market.
These are simply a few minor points to consider, and can also be done during acquisition time. Too many times a real estate agent will tell you a home is $5000 cheaper, but if the home does it have these upgrades, you lose in the long run. Stay tune for additional points of consideration for your future Las Vegas rental home purchases.
http://www.reviewjournal.com/
