Las Vegas, Nevada- Population of 2.7 million that increases year after year. Las Vegas is the land notorious for casinos, gambling, nightlife, tourism, and endless entertainment. Investors have shied away from Las Vegas since the incredible real estate bust years ago. However, Las Vegas is making a comeback in real estate investing since the “Great Recession”.
It’s a great time to invest in Las Vegas rental properties. If you pick up a rental property and hold onto it, you can potentially receive a great return on your investment by either renting it long-term or short-term. In some areas, you can rent your property at a daily AirBnB rate to the millions of tourists that visit every year. Las Vegas home values continue to increase each year at a much faster rate than the national average.
With impressive employment growth, population growth, rental yields, and disposable income, Las Vegas is the mecca of entertainment and the city of endless opportunities. Although Las Vegas is famous for its gaming and tourism industry, it’s also gaining popularity in the growing high-tech, industrial and financial sectors.
Las Vegas is not only known to be the biggest tourist destination in the world but it’s also known to be one of the top destinations for business conventions. Even though Las Vegas attracts millions of tourists, it is a place where many residents come to live permanently for the climate, employment opportunities, shopping, and dining experience. There is plenty of entertainment outside of the “Las Vegas Strip” that residents such as families and retirees come to enjoy. Permanent residents feel a sense of community and have endless inexpensive options for activities outside of the tourist district.
Each year, Las Vegas attracts new residents that fuel the real estate market. Here are the 5 sizzlin’ reasons to invest in a hot Las Vegas Market:
1. No Income Tax
Las Vegas does not have personal income tax. This is why many people flock to Las Vegas to start a business or retire. The State of Nevada does have a sales tax and it also collects casino-related fees. However, Las Vegas does not have a corporate tax, franchise tax, or inventory tax, making it even more attractive to invest.
2. Diversified Economy
Las Vegas is best known for its entertainment district and many casinos. You would think that the casinos are the largest employers in Las Vegas, but surprisingly the largest employer in Las Vegas is Nellis Airforce Base. There are thousands of military and civilian employees who work in some capacity at Nellis Airforce Base. Las Vegas Metropolitan Police comes in at second largest in Las Vegas, as well as The Flamingo and MGM Grand.
Tourism, gaming, and the entertainment industries provide thousands of jobs. But there is also a strong health and medicine industry in Las Vegas, offering thousands of positions related to medical and health services. Business (IT) Information Technology ecosystems is another growing industry offering many positions in IT. Many positions including customer service, sales, telemarketing, software developers, laborers, and construction workers are just to name a few of the many opportunities for employment.
3. New Construction
Construction is a significant component of the economy in Las Vegas. The city is constantly growing and new homes, primarily multi-family properties, and new apartment buildings are being built. There are also some large infrastructure projects underway. There’s an impressive surge in demand which will strip the supply, and ultimately result in an escalation of market value that could potentially surpass the national average.
Total construction market volume is expected to increase by 13.6% by the end of 2021, and by 4.9% in 2022.
4. Rental Income
$1,100- $2,300 is the current average rental income for apartment rentals in Las Vegas. Long-term rentals are the key to making a return on your investment, and even though residential short-term rentals are not permitted in some areas such as Clark County and North Las Vegas, Henderson, which is just minutes east of Las Vegas, will allow short-term rentals with restrictions. If you’re thinking of just buying an investment property to rent out short-term, you’ll need to consult with a local realtor about the laws in place that permit or make it more difficult for short-term rental sites like Airbnb.
An exception or allowable situation for short-term rentals is when the property is your primary residence. Traditional rental property investment in Las Vegas is increasing due to the low property taxes and enormous population of renters. If you’re looking at a long-term investment, then long-term rental properties are the way to go. Many people cannot afford to buy a home, leading many to rent instead, thus resulting in the need for rental properties. This is why investing in rental property in Las Vegas is beneficial for real estate investors.
5. Market Value
Las Vegas townhome property value, depending on location, is around $200,000- $250,000. Single Family homes can also range, depending on location, with an average of around $300,000. Las Vegas has a high volume of renters, so buying investment properties at a good price in a good location is an excellent purchase for real estate investors. Las Vegas has many suburbs to buy investment properties. Let’s look at the top neighborhoods to give you an idea of where you can put your money:
- Green Valley, Henderson (Southeast of the Las Vegas Strip)
- Summerlin, Las Vegas (West of the Las Vegas Strip)
- Tule Springs, Las Vegas (Northwest of the Las Vegas Strip)
Of the three areas mentioned above, and just minutes from the Las Vegas Strip, Green Valley is considered one of the best areas to buy rental investment properties. Especially, when considering renting the property to tourists, since Airbnb is legal in Henderson.
Note: When referencing average rental income or property value, please check with your local realtor to get the most up-to-date real estate market value, as these numbers could fluctuate and impact rates and value.
Las Vegas is a sizzlin’ hot real estate market for real estate investors, permanent residents, and tourists looking for short-term or long-term lease options. Las Vegas is one of the most affordable cities in the western United States that still offers affordable properties, and the ability to invest and potentially make money. Las Vegas is always evolving and growing, making it more attractive year over year for more people to seek new job opportunities, and affordable housing. If you’re looking for a great investment, make sure to call a local agent to help you purchase your next property.