Unlocking Wealth: Your Ultimate 2024 Guide to Investing in Las Vegas Real Estate

Is Las Vegas Real Estate a Good Investment in 2024?

2024 market metrics point to the fact that Las Vegas could indeed be considered a worthwhile place to invest, despite currently being in the midst of a seller’s market. The following article outlines why this is a good time to invest, and important factors to consider before embarking on a Las Vegas home or condo purchase.

Factors to Consider Before Making a Las Vegas Real Estate Investment

It’s always a good idea to do your due diligence before expanding into a new real estate market. With that in mind, here’s a look at a few factors to consider before moving forward in Las Vegas. Be sure to weigh these considerations as you make your decision on how to build out your portfolio.

Las Vegas Growing Population

According to data from LVR (Las Vegas Realtors®), an estimated 8.2 new residents move to the Las Vegas metro area every hour of the day. They based that statistic on the fact that the city’s population has been growing steadily over the last few years. Clark County, the county where Las Vegas is located, had a population of 2,320,551 in 2021 which grew to 2,338,127 in 2022.

Demographics research by the Nevada Department of Taxation estimates that the number has risen to 2,361,258 in 2023 and 2,396,887 in 2024, a 1.5% increase year-over-year. What’s more, according to projections from the Department of Taxation for the next five years, the county should expect a similar increase each year. By the year 2028, the population in Clark County is expected to grow to a staggering 2,536,534!

Real Estate Diversification

While not all of those projected to move to Las Vegas will be renters, this pool represents a sizable market from which investors will likely be able to benefit. Las Vegas is unquestionably a growing city in need of single-family homes, apartments, and office spaces, which is why investing in the city is likely to keep being a smart place to invest.

Inventory Levels

The Las Vegas Realtors®’ May 2024 Monthly Housing Market Update also shows us that inventory levels - or the number of homes being actively listed and marketed for sale - are mixed. Single-family home inventory is on the rise while levels are decreasing among condos and townhomes.

According to the report, there is 1.6 months' worth of single-family homes available in the Las Vegas metro area. This number represents a 8.4% increase from the previous month and a 2.4% increase over the last year.

Meanwhile, where condos and townhomes are concerned, it’s a different story. As of May’s Report, there are 1.9 months’ worth of inventory in this housing segment. This number shows a modest 1.5% decrease month-over-month, but a staggering an 41.9% increase since the same time last year.

However, in either case, these numbers lag behind the national average. According to the National Association of Realtor’s (NAR) most recent Existing Home Sales Snapshot there is an average of 3.7 month’s worth of inventory nationwide, which means investors should be prepared for fierce competition. There may be more buyers competing for the same, few available properties.

Las Vega Home Prices are on the Rise

A main factor investors should consider is Las Vegas home prices. As of May 2024, the median closing price among single-family homes was $473,000, representing a 0.9% increase over the previous month and a 7.0% increase year-over-year.

For condos and townhomes, the numbers were similar. While the median closing price was $295,000, that number shows a 1.7% increase month-over-month and a 7.3% increase on an annual basis.

It’s also worth noting that the median sale price in Las Vegas is somewhat higher than the national median. According to the Existing Home Sales Snapshot, the median sale price nationwide is just $419,000 for a single-family home. These numbers indicate that investors may need to be prepared to pay more upfront, but can likely anticipate appreciation.

Las Vegas Has a Low Tax Burden

To start, the state of Nevada has a much lower tax burden than many of the other states in the union because it doesn’t charge individual or corporate income taxes.

According to the Clark County Office of Economic Development, Nevada also has the fourth-lowest property taxes in the nation. The Tax Foundatiion found that the state has an effective 0.44% property tax rate.

In addition, Clark County also has a tax cap that applies to resident’s property tax bills. The cap is 3% on primary residences or certain investment properties that meet prescribed low-income rent limits. For all other investment and commercial properties, the cap is set at 8%.

Meanwhile, as far as state and local sales tax is concerned, the state of Nevada has a 6.85% sales tax rate, leading to an average combined sales tax rate of 8.24%, per the Tax Foundation.

These tax benefits are a bonus not only for investors themselves, but also another reason why the cit’s population is likely to continue to grow. View the latest Summary of Clark County, Nevada District Tax Rates - 2023-2024.

The Job Market is Growing, But Unemployment Remains High

The last factor to consider is the job market. According to an April press release by the Navada Department of Employment Training and Rehibilitation (DETR), the job market in Las Vegas has expanded by 3.0% since March 2023. A total of 33,200 jobs were added since that time last year.

Recent data from the Las Vegas Global Economic Alliance shows that the three largest sectors for job growth are unsurprisingly leisure and hospitality, professional and business services, and education and health services. Since Las Vegas is the center of Nevada’s tourism industry, these strong numbers should convey positive signs to real estate investors. Job growth is typically a signifier of economic resilience and demand for new development.

Still, there’s also the unemployment-rate to think about. The DETR data says that, across the state, Nevada has a 5.1% unemployment rate, which is higher than the national rate of 4.0%, according to the Bureau of Labor Statistics.

There are many theories behind the state’s higher-than-average rate, but one theory seems to be that it’s due to a slower post-Covid recovery in the hospitality industry. In this case, the city’s reliance on the tourism industry may feel like something of a double-edged sword for cautious investors.

Why Buy a Rental Property in Las Vegas?

At the end of the day, there is no iron-clad guarantee that every rental property will be a good investment. However, you can do your best to ensure a good ROI by doing your reasearch into the area where you intend to buy. When doing so, you may want to familiarize yourself with the Regulations for Short Term Rentals in Las Vegas.

For its part, Las Vegas’s metrics, such as its growing population and strong employment numbers, point to the likelihood that more and more people will continue to need to find housing in the area in the future. In addition, its rising home prices suggest that investors are likely to make a return, especially if they know how to find a deal on the buying side.

Beginning Your Investment Journey

Purchasing an investment property in Las Vegas can be a lucrative endeavor if done correctly. Here are the steps you should take before buying:

Get Trusted Advice: That said, if you’re new to the Las Vegas market or are just getting started with real estate investing, you’re going to want to talk to a trusted advisor who can guide you through the process. Contact Las Vegas Realtor, Leslie Hoke today and she can help you get started, call: (702) 321-1763

Set Your Goals: Are you looking for a Las Vegas property that will gradually appreciate over the long term, or perhaps rental income, or both? Do you want a new build, existing home, or a fixer upper? Having a clear idea of these objectives will greatly narrow down your real estate search.

How Much Property Can You Afford?: Don't be one of those buyers who finds their perfect property then realizes they can't get the necessary funding. The more prepared you are when it's time to place an offer, the better your chances are of getting a favorable result, especially if there is a bidding war. Before looking at the first home or condo make sure all these factors are in place:

• A favorable credit score, if you'll be requiring a loan
• Research mortgage options and get pre-approval for a loan
• Prepare for a down payment, which may be 20-25% for investment properties

Start Shopping!: You'll save yourself hours time and frustration by working with an expert realtor, such as Leslie Hoke who has experience with investment properties. She'll help you narrow down your search and find out what's available in your price range and overall investment goal.

Once you've created a short list, then start touring the listings to see them first hand. Evaluate each property based on condition, location, potential for rental income and future appreciation, and whether it meets your original objectives.

Start Your Search Now

You can start by searching all properties for sale in Las Vegas Valley, or narrow down your search using these popular choices:

• Las Vegas Condos
• Las Vegas Homes
• Las Vegas Highrises
• Homes w/ Casita (guest suite)
• Summerlin Homes
• Summerlin Condos
• Las Vegas 55+ Communities

Management Plan

By now you've secured your financing, anticipated the closing costs and done your final walkthrough. Now you need to put a management plan in place. Here are three important considerations:

Property Management: Will you be managing the day-to-day operations of your property or will you be hiring an external property managment company? Leslie can help you with recommendations.

Maintenance Plan: You'll need to set up a schedule for various repairs and weekly maintenance (i.e. lawn care, gardening, etc.)

Short-Term Rental License: If you know your property qualified for short-term rentals, you'll need to apply for:

• A Conditional Use Verification (CUV) Permit including inspection
• A business license
• View complete set of short-term rental instructions as provided by the City of Las Vegas, Department of Community Development Short-Term Rental Handout.

Final Steps - Enjoy your new Las Vegas investment and reap the rewards!