r2i forum

Hi all

I always get great responses when I post in this forum. We have a little bit of money and want to buy an investment property. Looking at Las Vegas since the prices seem low. The range of investment is from $50K to $100K. There are mixed reviews about vegas on the internet. what do you think? If you think it is good, can you also point me to location. some said north of 215. thanks much

vegas is one of the hard hit places in US during the real estate Down turn and i think it has a long way from recovery and growth.
but said that think about the following
1. How much down payment / Loans ?
2. Will the rent be sufficient to pay your loan, taxes , insurance etc ? If the property is not rented out will you be able continue to pay the mortgage(assuming you get a mortgage)
3. what if the prices don't go up for another 3-5 years..
4. can you get better returns by putting the money in mutual funds or stocks.

subhi_sumi;393338We have a little bit of money and want to buy an investment property. Looking at Las Vegas since the prices seem low. The range of investment is from $50K to $100K. There are mixed reviews about vegas on the internet. what do you think? If you think it is good, can you also point me to location. some said north of 215. thanks much

Looks like you are one of the folks who did not get burnt in this financial crisis. Reminds me of those people in Mumbai who were running towards the bullets fired by terrorists, to see what all the excitement was about. Just buy REITs if you want to invest in real estate, and save yourselves some trouble.

You can get very cheap property in Vegas at the moment. If you rent it out, you might probably even make some money after all the expenses.

However, IMHO, properties in Vegas will always remain cheap (absent any new bubble) and rents are unlikely to go up significantly. So you need to ask yourself this question - Are you prepared to sink 100K in an illiquid investment to make 5%-15% per year after a lot of headache for 10 years, and then get 110K back? If yes, then go ahead.

For me, there are better ways to make 5-15% than what I said above. Personally I would buy a residential investment property only if I conclude that there is significant chance of appreciation.

With so much supply, one can forget making any money out of appreciation for a long time. That said, If you like vacationing in Vegas, one always has the option of treating it as a vacation home and listing it out on VRBO.com and such when not in use. The prices are extremely attractive, and there are many close to the strip. If one has a good networth, having a vacation home as 10% to 20% of the portfolio does not seem like a bad idea to me. After all Vegas is a top vacation destination in the US.

subhi_sumi;393338Buying a property in Las vegas - is it safe?

As safe as the roll of the dice.

samv;393372For me, there are better ways to make 5-15%

Like what?

layman;394223Like what?

Any blue chip stock (e.g. WMT, JNJ, KO, XOM, PEP, PG ...) yields 2-4% current dividends. Dividends rise every year. Will appreaciate 2-7% pa over time. If you are patient, buy when they are low (like right now) and not sell at panic, you are likely to make 5-15% pa with much less risk and headache than a house in Vegas.

samv;394226Any blue chip stock (e.g. WMT, JNJ, KO, XOM, PEP, PG ...) yields 2-4% current dividends. Dividends rise every year. Will appreaciate 2-7% pa over time. If you are patient, buy when they are low (like right now) and not sell at panic, you are likely to make 5-15% pa with much less risk and headache than a house in Vegas.

I agree with you on this. Buy and Hold is the best strategy. I am a big supporter of that myself.

There is a big caveat however... It is easier said than done.. Take Citigroup (C) as an example. How big of a heart do you have to be able to buy it at $50 and hold it even when it falls to a couple of dollars.

Yes, it paid handsome dividend. As in case of most blue-chips, dividends were paid every single quarter and were raised on an annual basis.. until they were discontinued completely. I mean 0% yield.

So, from $50 to $3 and a yield of 0%...

I mean, its the best strategy. But not every easy to implement.. Especially not easy for a person who wants to make quick money by flipping houses...

2 cents..

I agee with both of you. But, buying rental house for long time is not bad either. You buy a house putting 20% down. If the rent pays the loan+expenses. in another 20 or 30 yrs you own the property (I mean debt free) while your tenant paid for it. The appreciation is an added plus.

I know an Indian origin retiree who lives off his rental house that he bought when he worked.