'Where in Canada can you buy a $50,000 property and rent it for $1,000 a month?' was the lead-in for an article on the Las Vegas real estate market in the Montreal Gazette this past Friday. The article implied that paying $50k for a property and being able to lease it out at $1k per month was easy in Las Vegas and other distressed US markets.
If so, I would sure like to know where these properties are! I can’t seem to find any listed in our local Las Vegas MLS system. I would be more than happy to buy at least 10 of them this week myself. Already our phones are ringing off the hook from Canadian buyers who saw the article and don’t believe us when we tell them it was all hype. They think we are “hiding” the listings from them! (I have yet to see a real estate agent that can afford to “hide” listings and stay in business.)
Unfortunately, many buyers read these press reports and make poor buying decisions because of them.Where does the press come up with these statistics?? They seem to have little or no basis in fact. (Another recent news article said that the Las Vegas real estate market was going to go down another 10% to 12%. Again, this was reported with no supporting documentation, just a gobbled gook of random statistics that had no bearing on what was reported.) But because of articles like these, we have to spend a lot of time re-educating buyers on fact vs. fiction and what is actually possible.
Sure, we absolutely have low cost homes for sale in Vegas. But they are in neighborhoods where the purchase price reflects the potential rental income as well. (And Buyers, please check those Metro crime statistics before making a purchase.) True, many of the short sale properties are listed way below market just to get someone to put in an offer. But the banks always do their own appraisal before approving a short sale, and will usually counter with a price that is within 5% of the actual market value.
That is not to say that you can’t get a terrific return on Las Vegas investment properties. It is absolutely possible to buy a cute newer home for around $100k and get $1k or more per month rental income. This is actually a great time to buy, as the latest statistics are finally showing a small upward trend in Las Vegas sales prices (see Las Vegas real estate weekly trends) and inventory has come down to a five year low. Just between October 1st and November 1st single family home inventory went from 11,500 active listings down to 10,500 active listings. (For homes under $200k we are once again experiencing multiple offer situations because investors and second home buyers from all over the world are trying to take advantage of the low cost to own.)
Not to mention, prices have dropped substantially, 50% to 60%, from just a few years ago. With the strength of the Canadian dollar vs. the US dollar, it makes all the sense in the world for Canadians to finally buy that snowbird property in the States. And the Australian buyers are also taking advantage of the favorable foreign exchange rates to purchase second homes and investment property in Las Vegas.
But someone somewhere has got to finally hold the press accountable for what they print. They aren’t doing anyone any favors by not checking the facts first. The client that buys that $50k property and expects to get $1k per month in rent is going to be sadly disappointed. The client that didn’t buy because he/she read that property prices were going to decline further is going to be really upset when they come back six months later and find that the home they wanted is even more expensive.
Diann Tonnesen
Prudential Americana Group Realtors
Las Vegas Luxury Real Estate
Las Vegas Luxury Condos
Las Vegas Golf Homes
Henderson Real Estate
Most of the stuff on the internet now is just a mixed up bunch of spun articles that have no basis at all. Just a bunch of words to rank on the search engines for ad money. They say one thing one day and the opposite the next.
What is really sad is that people read this stuff and then make their decisions based on inaccurate information. And buying a home is not like buying a pair of shoes - you can't take it back if it doesn't fit what you need!
Diann, your article really hits the point seldom made that we---Canadians or anyone---need to be looking at the likely FUTURE WHEN WE BUY REAL ESTATE instead of 1. bemoaning the past and 2. living in the state of "what's happening right now." We can do local research, too.
Relying on what the media says is not the answer unless you follow only the very MOST EXPERIENCED local newspaper writers who are known over 20 years or so to scrupulously RESEARCH the facts before they knock out another article at the last minute which is what their rambunctious understudies try to slip through into print. THAT lack of fact finding is what misleads the public and causes some people to make disasterous real estate decisions.
I am sure that your article will help a great many people to think twice and perhaps avoid taking misguided steps.