Las Vegas buy to let

[stewartk]

Looking to buy apartments in Las Vegas ,deal looks pretty good :from 'Knight Knox International' 1 & 2 bed apartments from £80,000 to £125,000 with all costs and taxes paid and all management,maintenance fees paid for 3 years. Guaranteed rental of 8% for 3 years Looks good, downside after 3 years if there are no rental increases will revert to actual 6% return & of course no guarantee property value will have increased. I know usa property market is in slump but Vegas seems to be riding the storm as it has such a vibrant community and tourist industry, new casinos will create 15.000 new jobs in next 2/3 years who will all need somewhere to live!
Help, anyone out there had experience with this company before I dive in ?

All comments very welcome,

StewartK

[oregon woodsmoke]

First a general comment about Las Vegas. I think it has the potential to be a good place to invest. There was a big price bubble, which has already burst and prices dropped substantially, so that is already over with.

It is a city that has a rapidly growing population, and the growth is going to get even bigger as the baby boomers retire and want to live some place fun.

There is a non-stop tourist industry. There isn't a weekend all year that isn't a tourist weekend. There is no off season.

Now, on your specific deal: I don't know the company, I don't know the deal. so comments are general.

We don't buy individual apartments in the USA. It's the entire building or nothing. So either there is a language difference and you mean condos, or I don't know what it is that you are buying.

There are builders who are offering good incentives right now, so the deal might be legitimate. However, usually when you are getting a 3 year guarantee on income and expenses, that isn't free. The whole cost of that is added onto the purchase price that you have paid, and it is included in your mortgage. Myself, I would prefer to pay the lower price without also paying for the guaranteed income (which is really my money being given back to me).

Some of the companies which offer guaranteed income for 3 years have been known to get all their units sold and then declare bankruptcy and disappear (again, I know nothing about the company you are speaking about. My comment is general).

The prices you are quoting seem a bit high, unless we are looking at luxury units. Remember, the exchage rate is in your favor, and that is a lot of money when you convert it to dollars.

It is safe to buy from American real estate agents. They must be licensed and insured and they must be working under the supervision of a broker, who is also licensed, insured and bonded. There are strict laws to protect buyers. In the western states, all the actual paperwork and transaction is handled by an escrow office, that is also insured and bonded. You never give any of your money to the agent or the seller. Everything goes to the escrow office, and they make sure everything is done right and legally, and the money goes where it is supposed to go. (It is done differntly in the eastern states)

So, I suggest that you Google and find the site Realtor dot com. That is a directory of real estate offices in the USA. You search for the town that you want, and you open the website for each real estate office, and you can see what they have for sale, what the price is, and a picture of what it looks like.

Also search for Craigslist. Find the Craigslist for Las Vegas. Open it and look under real estate for sale. You will see what is for sale, the price, and photos of what it looks like. Craigslist will usually give you a very specific location, too, which makes a lot of difference.

That way you can see what properties should cost. Then you know if the price you are being offered is fair.

[Landwatch.com]

Las Vegas has been attracting a lot of investors. The city has a high resale value on its properties owing to the fact that it is a hot tourist destination. Its many second homes and retirement homes offer best investment opportunities. Besides with the falling dollar, the city is also attracting many foreign investors as well.

[kennyhubbard]

Oregon,

At the risk of hijacking the thread..............

You seem to be clued up on the property market in the USA......where would you say is a good buy-to-let market with good rental returns. I am not overly concerned with capital growth but rather a good solid cashcow that is cashflow positive with minimum downpayment.

Thanks

Kenny

[oregon woodsmoke]

If you don't care about appreciation, the landlords in the middle part of the country are able to find cash flow with low down payments. And by cash flow, I mean a property that pays all of it's expenses: mortgage, vacancies, taxes insurance, repairs, management fees, and scheduled maintenance.

Look at Ohio, Indiana, The Dakotas, and Texas.

You have to shop carefully and not pay asking price.

In Ohio and Indiana, properties are cheap to buy, you can get cash flow, but you aren't going to get any apreciation. I'd suggest that you stay away from bad areas in the big cities; they aren't a good place to invest.

Iron clad rule: never buy anything that has the landlord paying for utilities, unless you have the funds to separate them and make the tenants pay their own.

In Texas, you will pay more for the properties, but have a chance of some appreciation. Multi-family buildings seem to be good investments in Texas. Texas also has landlord tenant laws which are more favorable to the landlord than you will find in most other states.

In Oregon, where I am, if I can buy a property that pays it's own mortgage, I've done well. That isn't anywhere close to cash flowing. So I use very large down payments to reduce my mortgage payment, and that is the way I get properties to pay their own way. However, I get very healthy appreciation. It's a trade off.

It's not that I know so much about real estate markets in areas away from where I live, but I hang out and talk to other landords and hear what they are doing.

[Lmgrei]

Kenny,

I agree with Oregon. If you are looking for cash flow, Ohio ( Dayton, Cincinatti) is good as well as Pittsburgh Pa, and Memphis Tennesee. The rental demands are high and there are very good deals under 40k. I have been actively investing in different cities. I have tried Indiana, but was not happy with the quality of the homes and I felt the rental income was just too low. the other areas have double the rents and the homes are sturdy and of good quality. There is always the bonus of having equity in them for whenever you wish to sell.

[Lysos]

Back to las Vegas - which is what this thread is about - MGM Mirage just fired (sorry, laid off...) 400 middle management staff with immediate effect, to cut costs, and apparently there is less demand everywhere for relief staff.