It’s A Terrible Time to Buy Real Estate In Las Vegas
It’s a terrible to time to purchase property in Las Vegas for these 2 reasons:
- Everything Is Overpriced – Everytime we put one of our investors property on the market, some crazy person from California who is desperate or in a 1031 exchange pays WAY over value. There is so little inventory, dogs are fighting over scraps.
- Returns Are Terrible – Even if you get lucky to outbid all the insane people, you won’t make any money. Single family homes in a “C” neighborhood return about 4% while houses in “A” neighborhoods produce negative cash flow. The best thing you could possibly gamble on is commercial retail mom & pop strip malls that start at $2M.
If you are new to us and want to learn more, visit our investor start page.
Interest Rates Increasing
Everyone saw this coming and it was just a matter of time before the Fed decided to dampen inflation. According to Kiplinger, interest rates will slowly rise and most articles I have read suggest the Fed will probably get more aggressive as the year progresses. In the meantime, the mortgage industry is slowly increasing the number of adjustable mortgages. If there was ever a sign of a repeat of the last mortgage meltdown, this is one of them. At Limestone Investments, we are witnessing numerous investors who are taking cash out of their property to buy shiny things that don’t make them money. We don’t look forward to having conversations with these people when their property is upside down and they are strapped for cash.
Interest rates are on the rise, but they’re still historically cheap. That’s partially because of the federal funds rate — a key borrowing benchmark set by the Federal Reserve. As experts in the finance industry, we created a resource for individuals on the federal funds rate’s journey from 1981 through present time.
Here is the link to our guide:
Insurance – 1st Floor Condo Policy Change
In the last year we have had 3 major leaks from naughty tenants above our units. These have ranged from $3k to $40k in damages and two of them are still not resolved. If you are an owner of a condo on the first floor, you will be required to show proof your insurance company will cover these events. Limestone Investments will also be required to be additionally insured. If you own a condo on the 1st floor, contact your agent and ask these two questions:
- Is your condo covered if someone rains on you.
- Will you be compensated for loss of rent.
If they answer yes, get it in writing or circle the part in the policy that addresses those issues and send it to us.
If they answer no, you will need to find another carrier, another property management company or let us put it on the market. We are done playing with these.
TIP: You may want to chat with your carrier about adding burglary or vandalism to your policy. This extra rider is often less than $40 a year and could have saved some of our owners thousands of dollars.