Reports & 1099s Coming at You End January
We will be generating reports for all our customers at the end of January. These reports are built so all you have to do is hand the report to your CPA. These reports will include your income for the year and expenses broken down by category. Your 1099 will also be issued by the end of January.
IMPORTANT: Your 1099 may not match your profit loss statement!!
Why? The reason is because income and expense can occur at the end of the year. For example, if your tenant paid rent on 12/29/22, the income on your 1099 will show up in 2022 while the income on your P&L will show up on 2023. This difference carries forward every year so it rarely matches.
Our recommendation is to hand the 1099 to your CPA and treat that income as gospel. The expenses on your P&L can be used for your 2022 accounting.
Declining Prices In Las Vegas
There is no disputing house prices have started declining. The next question is, how long and for how much?
Redfin is talking about a 31% year over year in the first quarter, followed by smaller annual declines in the second and third quarters. By the fourth quarter, existing home sales will be flat from the year before. We will start recovering as rates fall from their peak, but they’ll still post year-over-year declines most of the year. I don’t think they are far off.
Rising interest rates are the key factor in pushing down prices but what people are not talking about is the insane purchases iBuyers and wanna be investors who ran the market up 2021 and 2022. This is a really good video showing you what to expect for the next few years. Don’t let the low inventory fool you. We are headed for at least a 20% correction and I predict it will last at least 3 years.
I currently have stressed out investors who are struggling. For once, I predict rental prices to drop. I have been telling investors for the last year rent prices will remain the same but now I’m reconsidering my predictions based on what I’m seeing locally.
Unlike the previous market correction, rents will start to decrease. In the fourth quarter of 2022, Vegas rent decreased 1%, bringing the average price to $1,420 per month. According to a report from the Nevada State Apartment Association (NVSAA), the price is down from $1,451 in the third quarter and below the national average of $1,620.
According to Michael Petrivelli, director of market analytics with the CoStar group, which compiled the data for NVSAA, the forecast shows rent is likely to continue decreasing another 1% to 1 1/2% through the next six months until summertime.
Most of our investors have not caught up with the latest increases because we didn’t want good tenants to flee. Leases that expire this year will only get modest increases if at all.
Construction in the area is building about 9,300 local apartment units, which will expand existing inventory by 5.2% once they’re complete. With evictions still playing out in court, apartment availability could increase further. More here…
Unlicensed Short Term Rentals In Las Vegas
It is no longer practical to purchase a property in the Las Vegas Metro area to be used as a short term rental. The cities of North Las Vegas, Henderson and the township of Las Vegas are saturated with licenses. The chances of finding a “hole” in those cities with an over priced property for sale is astronomically remote.
The remaining area is the “ocean” of Clark County. Unfortunately, Clark County came out with ridiculous rules last July and rumor has it that less than 300 operators have applied. Out of the approximate 12,0000 pirates we predict that less than 2000 will able to get a license. There will be about 10,000 pirates running loose in 20023 and Clark County will be hunting them down with a vengeance. This video covers the 4 basic options you have if you are a pirate. None of them are pretty:
- Convert to a long term rental.
- Convert to a mid term rental.
- Experiment with “Room Share.”
- Go under the radar with other platforms.
Since Limestone Investments will not be managing any pirate ships in 2023, any pirates will be on their own.
Jim’s New Assistant
Vennetta Douglas is a licensed real estate agent who has years of transaction experience. She is assisting Jim with leases, insurance docs, inspections and walkthroughs.
- Vennetta Douglas
- (702) 553-9210
Looking for a quick getaway in Las Vegas?
We manage a dozen short term rentals. Our customers get discounts for staying with us and we would love for you to visit!! Click here to see what we have available.
Get two nights free! When you book any of our exciting stays in January through March 2023! Send barb an email (firstname.lastname@example.org) to get your two additional nights. You can transfer this special to friends or family.
About The Author
Jim Eagan is the Broker at Limestone Investments (license 1000724) and has been managing investment properties for over 30 years. He has written two books on the subject of property management has taught hundreds of other property managers the art of managing property.