Las Vegas market?

[guitar187]

“then how is it a bubble??”

Because we do not use a single one bedroom apartment to derive value. And if I give you the answer, you won’t learn anything. This site is definitely a good place to start but you’ll have to do the research yourself 😉

[betting on fall]

Good luck getting a 3% down, 5.5% rate loan TODAY on a property in Vegas, especially if you honestly say that its an investment property.

And even if you find a deal where you aren’t losing money every month, you really need the kicker of price appriciation to make an investment property worthwhile. Without price apprication, putting your money in a CD at 5% sounds like a lot more fun.

[betting on fall]

Good luck getting a 3% down, 5.5% rate loan TODAY on a property in Vegas, especially if you honestly say that its an investment property.

And even if you find a deal where you aren’t losing money every month, you really need the kicker of price appriciation to make an investment property worthwhile. Without price apprication, putting your money in a CD at 5% sounds like a lot more fun.

[betting on fall]

Good luck getting a 3% down, 5.5% rate loan TODAY on a property in Vegas, especially if you honestly say that its an investment property.

And even if you find a deal where you aren’t losing money every month, you really need the kicker of price appriciation to make an investment property worthwhile. Without price apprication, putting your money in a CD at 5% sounds like a lot more fun.

[betting on fall]

Good luck getting a 3% down, 5.5% rate loan TODAY on a property in Vegas, especially if you honestly say that its an investment property.

And even if you find a deal where you aren’t losing money every month, you really need the kicker of price appriciation to make an investment property worthwhile. Without price apprication, putting your money in a CD at 5% sounds like a lot more fun.

[betting on fall]

Good luck getting a 3% down, 5.5% rate loan TODAY on a property in Vegas, especially if you honestly say that its an investment property.

And even if you find a deal where you aren’t losing money every month, you really need the kicker of price appriciation to make an investment property worthwhile. Without price apprication, putting your money in a CD at 5% sounds like a lot more fun.

[barnaby33]

putting your money in a CD at 5% sounds like a lot more fun and a lot safer! Safe is the new fun.

Josh

[barnaby33]

putting your money in a CD at 5% sounds like a lot more fun and a lot safer! Safe is the new fun.

Josh

[barnaby33]

putting your money in a CD at 5% sounds like a lot more fun and a lot safer! Safe is the new fun.

Josh

[barnaby33]

putting your money in a CD at 5% sounds like a lot more fun and a lot safer! Safe is the new fun.

Josh

[barnaby33]

putting your money in a CD at 5% sounds like a lot more fun and a lot safer! Safe is the new fun.

Josh

[Bugs]

The reason it doesn’t sound too bad is because the dollar amounts involved are relatively low.

His mortgage payment is just a touch less than the rents, but he has to collect rents all 12 months of the year for that to break even – the unit can never stand vacant even for a couple weeks. Realistically, a 1bd apartment turns over occupancy more often that a 2bd or 3bd because the 1bd tenants are more more likely to move on a regular basis.

Then there’s the fixed costs of HOA dues, property taxes, and insurance; as well as the variable costs such as occasional maintenance, cleaning, painting and advertising when the unit does turn over, and eventually replacing carpeting and blinds.

If an investor were buying this unit to hold it for 5 years, this is what the cash flow would look like to them, excluding the potential profits/losses from changes in the price.

1,450 – Annual property taxes (conservative estimate)
1,200 – HOA dues (conservative estimate)
400 – Insurance
200 – Administrative expenses (accounting, banking, etc)
200 – Average expense for painting ($600 / 3 yrs)
150 – Average cleaning expense ($450 / 3 yrs)
904 – Average flooring/drapes replacement (226 sqyd x $20; /5)
———
$ 4,504 – Average annual expenses, in 2007 dollars

Soooo,

$10,200 – Maximum rental income, in 2007 dollars
– 306 – Average vacancy and collection losses
——–
$ 9,894 – Average annual effective gross income
– 4,504 – Average annual expenses, in 2007 dollars
——–
$ 5,390 – Net Income, before debt service
– 9,539 – Mtg payment on $140,650; 30yrs @5.5%
——–
($4,149) – Average Net annual loss over a 5 year holding period, assuming the property doesn’t increase/decrease in value during that time period. Just to break even, this condo would have to increase by $20,000 in 2007 dollars over the next 5 years. If we assume a conservative 2.5% average annual inflation rate – which i think is ridiculously low as of right now – then this unit would have to sell at $186,000 in 2013 just to break even.

Again, the monthly loss doesn’t sound so bad because of the dollar amounts involved – it’s equivalent to losing a car payment on a Corolla. But it’s still a sizable loss compared to the rental income itself.

Tax benefits to an income investor won’t be the same as for a buyer for whom this is the primary residence.

Now how good does it look?

[Bugs]

The reason it doesn’t sound too bad is because the dollar amounts involved are relatively low.

His mortgage payment is just a touch less than the rents, but he has to collect rents all 12 months of the year for that to break even – the unit can never stand vacant even for a couple weeks. Realistically, a 1bd apartment turns over occupancy more often that a 2bd or 3bd because the 1bd tenants are more more likely to move on a regular basis.

Then there’s the fixed costs of HOA dues, property taxes, and insurance; as well as the variable costs such as occasional maintenance, cleaning, painting and advertising when the unit does turn over, and eventually replacing carpeting and blinds.

If an investor were buying this unit to hold it for 5 years, this is what the cash flow would look like to them, excluding the potential profits/losses from changes in the price.

1,450 – Annual property taxes (conservative estimate)
1,200 – HOA dues (conservative estimate)
400 – Insurance
200 – Administrative expenses (accounting, banking, etc)
200 – Average expense for painting ($600 / 3 yrs)
150 – Average cleaning expense ($450 / 3 yrs)
904 – Average flooring/drapes replacement (226 sqyd x $20; /5)
———
$ 4,504 – Average annual expenses, in 2007 dollars

Soooo,

$10,200 – Maximum rental income, in 2007 dollars
– 306 – Average vacancy and collection losses
——–
$ 9,894 – Average annual effective gross income
– 4,504 – Average annual expenses, in 2007 dollars
——–
$ 5,390 – Net Income, before debt service
– 9,539 – Mtg payment on $140,650; 30yrs @5.5%
——–
($4,149) – Average Net annual loss over a 5 year holding period, assuming the property doesn’t increase/decrease in value during that time period. Just to break even, this condo would have to increase by $20,000 in 2007 dollars over the next 5 years. If we assume a conservative 2.5% average annual inflation rate – which i think is ridiculously low as of right now – then this unit would have to sell at $186,000 in 2013 just to break even.

Again, the monthly loss doesn’t sound so bad because of the dollar amounts involved – it’s equivalent to losing a car payment on a Corolla. But it’s still a sizable loss compared to the rental income itself.

Tax benefits to an income investor won’t be the same as for a buyer for whom this is the primary residence.

Now how good does it look?

[Bugs]

The reason it doesn’t sound too bad is because the dollar amounts involved are relatively low.

His mortgage payment is just a touch less than the rents, but he has to collect rents all 12 months of the year for that to break even – the unit can never stand vacant even for a couple weeks. Realistically, a 1bd apartment turns over occupancy more often that a 2bd or 3bd because the 1bd tenants are more more likely to move on a regular basis.

Then there’s the fixed costs of HOA dues, property taxes, and insurance; as well as the variable costs such as occasional maintenance, cleaning, painting and advertising when the unit does turn over, and eventually replacing carpeting and blinds.

If an investor were buying this unit to hold it for 5 years, this is what the cash flow would look like to them, excluding the potential profits/losses from changes in the price.

1,450 – Annual property taxes (conservative estimate)
1,200 – HOA dues (conservative estimate)
400 – Insurance
200 – Administrative expenses (accounting, banking, etc)
200 – Average expense for painting ($600 / 3 yrs)
150 – Average cleaning expense ($450 / 3 yrs)
904 – Average flooring/drapes replacement (226 sqyd x $20; /5)
———
$ 4,504 – Average annual expenses, in 2007 dollars

Soooo,

$10,200 – Maximum rental income, in 2007 dollars
– 306 – Average vacancy and collection losses
——–
$ 9,894 – Average annual effective gross income
– 4,504 – Average annual expenses, in 2007 dollars
——–
$ 5,390 – Net Income, before debt service
– 9,539 – Mtg payment on $140,650; 30yrs @5.5%
——–
($4,149) – Average Net annual loss over a 5 year holding period, assuming the property doesn’t increase/decrease in value during that time period. Just to break even, this condo would have to increase by $20,000 in 2007 dollars over the next 5 years. If we assume a conservative 2.5% average annual inflation rate – which i think is ridiculously low as of right now – then this unit would have to sell at $186,000 in 2013 just to break even.

Again, the monthly loss doesn’t sound so bad because of the dollar amounts involved – it’s equivalent to losing a car payment on a Corolla. But it’s still a sizable loss compared to the rental income itself.

Tax benefits to an income investor won’t be the same as for a buyer for whom this is the primary residence.

Now how good does it look?

[Bugs]

The reason it doesn’t sound too bad is because the dollar amounts involved are relatively low.

His mortgage payment is just a touch less than the rents, but he has to collect rents all 12 months of the year for that to break even – the unit can never stand vacant even for a couple weeks. Realistically, a 1bd apartment turns over occupancy more often that a 2bd or 3bd because the 1bd tenants are more more likely to move on a regular basis.

Then there’s the fixed costs of HOA dues, property taxes, and insurance; as well as the variable costs such as occasional maintenance, cleaning, painting and advertising when the unit does turn over, and eventually replacing carpeting and blinds.

If an investor were buying this unit to hold it for 5 years, this is what the cash flow would look like to them, excluding the potential profits/losses from changes in the price.

1,450 – Annual property taxes (conservative estimate)
1,200 – HOA dues (conservative estimate)
400 – Insurance
200 – Administrative expenses (accounting, banking, etc)
200 – Average expense for painting ($600 / 3 yrs)
150 – Average cleaning expense ($450 / 3 yrs)
904 – Average flooring/drapes replacement (226 sqyd x $20; /5)
———
$ 4,504 – Average annual expenses, in 2007 dollars

Soooo,

$10,200 – Maximum rental income, in 2007 dollars
– 306 – Average vacancy and collection losses
——–
$ 9,894 – Average annual effective gross income
– 4,504 – Average annual expenses, in 2007 dollars
——–
$ 5,390 – Net Income, before debt service
– 9,539 – Mtg payment on $140,650; 30yrs @5.5%
——–
($4,149) – Average Net annual loss over a 5 year holding period, assuming the property doesn’t increase/decrease in value during that time period. Just to break even, this condo would have to increase by $20,000 in 2007 dollars over the next 5 years. If we assume a conservative 2.5% average annual inflation rate – which i think is ridiculously low as of right now – then this unit would have to sell at $186,000 in 2013 just to break even.

Again, the monthly loss doesn’t sound so bad because of the dollar amounts involved – it’s equivalent to losing a car payment on a Corolla. But it’s still a sizable loss compared to the rental income itself.

Tax benefits to an income investor won’t be the same as for a buyer for whom this is the primary residence.

Now how good does it look?

[Author]

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