Thinking about investing in Las Vegas real estate? Over the last decade, rental property investment has become an increasingly popular way to build wealth. As a result, many people have decided to buy investment property in Las Vegas. If you’re one of these people, read on to learn more about buying rental property in Las Vegas.
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While we cannot give you financial or investment advice, nor can we guarantee results, the data suggests that many who purchased rental properties in Las Vegas in recent years have done well. The Las Vegas area has seen tremendous growth over the last decade. The real estate market has appreciated significantly from its lows during the Great Recession and has broken price records during 2020/2021.
Who doesn’t like the idea of someone else paying down your mortgage while you sit and wait for the property to appreciate? Even though Las Vegas was hit hard after the 2008 Housing Crisis, it has since bounced back and evolved into one of the best real estate markets in the United States. As such, purchasing a rental property in Las Vegas can be smart financially because it offers the ability to have someone pay down your debt while your asset appreciates over time.
Nevada is just one of seven states throughout the country that have no personal income tax. Additionally, the state does not impose any corporate tax, franchise tax, or inventory tax, and overall, it has one of the lowest property tax rates in the country. Moreover, homeowners are protected from large property tax increases due to the state’s law which caps increases by 3% annually.
In addition to the state-specific tax benefits, owning investment property anywhere throughout the country comes with several tax benefits. Specifically, investors can deduct mortgage insurance, taxes, and property insurance. Additionally, investors may deduct any expenses for maintaining their rental property as well as depreciation, which is a fantastic tax-saving tool.
Being that Las Vegas is one of the most popular cities in the country to own rental properties, there are many desirable neighborhoods to choose from. While all areas have their own pros and cons – and we cannot guarantee or promise that they offer a better investment opportunity – below are 5 of the best places to consider purchasing a rental property in the Las Vegas area.
Northwest Las Vegas has grown significantly in recent years, in part thanks to affordable real estate and its location near Summerlin. People of all ages are moving to the Northwest area, which potentially makes it a good market for buying investment property in Las Vegas.
Pioneer Park is considered to be one of the most livable neighborhoods in Las Vegas. Compared with the rest of the city, this area has an affordable housing market and a plethora of nearby amenities. Its accessibility to major highways makes it a neighborhood that people are sometimes willing to pay a premium for.
Summerlin is an affluent master-planned community in Las Vegas. Summerlin has its own downtown area, featuring shopping, dining, entertainment, office space and recreation. The public school system in Summerlin is above average making it an attractive location for families with children. Homes here tend to be more expensive but may offer higher upside rents.
Henderson is considered one of the best places to live in the state of Nevada. It is a suburban area and is home to a lot of young professionals, families and retirees. Henderson has excellent infrastructure, a thriving economy, and many recreational activities, restaurants, and family-friendly attractions.
North Las Vegas is a fairly large city in the Las Vegas area. In fact, it’s the fourth-largest community in Nevada. Over the years North Las Vegas has seen its fair share of ups and downs; however, in recent years there has been a comeback and revitalization of many neighborhoods. There are also new homes and communities being built in North Las Vegas.
As explained below, there are several reasons why investors should consider investing in Las Vegas real estate.
The Las Vegas market has been thriving for some time now, and there are no indications that it will slow down anytime soon. This is still true even amid the COVID-19 health crisis. Overall, property values are appreciating making Las Vegas an attractive real estate market for long-term investing.
The population of Las Vegas has exploded in the last two decades! Las Vegas used to have a population well below 1 million. Now, there are nearly 2.5 million people in the Las Vegas Valley, and with people flooding in from California and other high-cost, high-tax states, it appears the population will continue to rise.
Once upon a time, the people of Las Vegas relied almost exclusively on the casino and hospitality industries for jobs. Over the years, the area has transformed itself and worked hard to attract new employers. Las Vegas has now attracted major companies such as Amazon and Google to the local area. Additionally, major employers besides the hospitality giants include Zappos, Allegiant and Remini Street.
If you’re a resident of Nevada, you pay no state income tax. This can add up to a huge savings over time! This benefit has attracted many companies and people from high-tax states like California, which boosts the local economy and can benefit your real estate investment in Las Vegas. Additionally, Nevada has a property tax abatement law that limits annual increases in your property tax bills to a maximum of 3%.
Las Vegas is one of the most popular vacation destinations both domestically and internationally. The famous Las Vegas strip attracts many visitors in addition to its world-class entertainment, fancy hotels, casinos, and a host of other attractions. Las Vegas is also popular for couples looking to elope. As such, the area sees consistent traffic year-round. Additionally, spearheaded by companies such as Airbnb, since 2008, short-term rentals have likewise become increasingly popular in tourist hot spots like Las Vegas.
Many visitors flock to the Las Vegas area due to its annual business conventions and trade shows held year-round. These visitors need places to stay, sometimes for weeks at a time. As such, if you have an investment property in Las Vegas, one option is to offer short-term rentals and make this your business model. However, keep in mind that there are several rules and regulations governing short-term rentals in Las Vegas, so you will have to do your research to ensure that you are following the law.
Do you want to buy a home for retirement and rent it out until you’re ready to move there full-time? Are you looking to assemble a cash-flow portfolio that provides steady income during retirement? Regardless if you’re a first-time investor or someone with a large real estate portfolio, it’s always smart to have a plan and a clear understanding of your goals, objectives and how much risk you’re willing to take.
When purchasing a Las Vegas investment property, you should consider things like property management costs and what will have to be done to maintain the property. While some investors seek fixer-upper, diamonds in the rough, others want turnkey investment properties that require little maintenance. Also, remember to factor in costs like HOA fees and utilities when determining your rent.
Real estate agents have different areas of knowledge and expertise. Therefore, if you’re looking to buy investment rental property in Las Vegas, it’s a good idea to work with a real estate agent with experience helping investors buy rental properties.
While purchasing rental properties isn’t for everyone, if you’re someone looking to buy a real estate investment in Las Vegas, we can help. Fill out the form below to speak with a real estate agent who can help you buy a rental property in Las Vegas.
Disclaimer: All investments, including real estate, are speculative in nature and involves substantial risk of loss. We are not giving you investment advice and encourage you to invest carefully. Please get personal advice from your professional investment advisor and make independent investigations before acting on information that we publish. We cannot assure you that the information presented here is accurate or complete. We do not in any way warrant or guarantee the success of any action you take in reliance on our statements or recommendations. Invest at your own risk.
Blog: Las Vegas Market Report