Thank you for your newsletter/site.
You wrote below that the average rents were up $309 over a year ago and expect them to rise dramatically. Can you explain the reasons both for past gains and predicted one? I'll bet your other readers would like more
information on this. Also, I notice that median rents are about $300 lower than average rents. I assume that that is because there are a few units with very high rents skewing the average?
You are correct that luxury product is pushing up the average while the median remains low because there is much condo product (ie condo conversions purchased from investors) on the rental market also. They are undercutting apartment rents by sometimes 30%.
I am advising investors to stay away from NLV because rents are low and stagnant and vacancies are higher. The highest rents and lowest vacancies are located on the southern 215 corridor (Henderson stretched up to the Durango Curve) where you have better proximity to Las Vegas area amenities (S Strip)/jobs, airport, etc. With the 95 (NW of 15) opening up more lanes now the 95 corridor (15 north to Summerlin) will be attractive to renters for it's downtown proximity. NLV is attractive because of it's low prices but once people realize the commute (and unless they are from places w/ long commute or work in NLV area) they don't find it attractive anymore.
Is there still a problem with huge numbers of houses sitting empty begging for renters?
The absorption rate for rentals listed in the MLS is very low and hovers only around 3 months and LV remains a landlord's market, just pulled stats yesterday or day before. There are areas with extremely high vacancies such as the high rise market with about 9 months of inventory and then there are areas with extremely low vacancies such as Rhodes Ranch area with about 2.3 months of inventory. People with credit challenges or problems with employment/rental history are being denied or are being asked for an extra month or two of security deposit. We are seeing rental inventory rise slightly as sellers have no choice but become landlords by default. Buyers have been locked out of product because of mortgage meltdown plus we have many foreclosures and people still moving into the valley so there is a sudden surge for rental demand. The best way to maximize your rental profits is to consider: pets (no breeds that are being disallowed by insurance cos tho), section 8, short term leases (1 month up), etc. When you add so many choices, there is very little inventory with those types of rentals and they can command a higher rent.
Renee, you are so willing to share information with all of us and I say, "Thanks!"
It let's us see the market conditions in your area. You're always so helpful!
Renee,
A major problem we have is the over abundance of property for sale along with high levels of empty rentals. The problem is do they wait for the rents to rise or do they take a hit just to keep carrying the property by taking the market. The problem is in my area that the rental market is better but the carrying costs are higher than what the landlords can command.I did two rentals recently and they are both still losing money but they need to keep the property so they have no choice.
Kris: Thank you!
Linda: Thanks!
Neal: There are many homes that the owners are experiencing negative cash flow. Luckily prices have been driven down that the investors are here and snatching up! Are you seeing that type of activity yet?
Gary: Yes they can and we must be very careful with them.
Rey: LOL! Funny how this stuff transpires sometimes.
Renee,
This is must read for landlords in Las Vegas. Opening the all-new 95 from downtown to Rainbow curve will make a big difference for the market overall in Summerlin and Northwest as commute times are shortened. Didn't know that NLV rental market was soft like that.
Maggie: Thanks!! Hope all is well with you!
Esko: NLV is definitely soft like that because of the commute. Prices definitely reflect. I am pretty excited about the 95 and homeowners/landlords should be too!!