250K Homebuyers Are Underwater
According to News Nation, more than 250k homebuyers are underwater on their mortgage. Shocking right? Imagine that happening after investors trip all over themselves to pay more than market price.
The mortgage data firm Black Knight also found that 1 million others who bought homes in the first nine months of 2022 have “limited equity,” owning less than 10%.
This number of investors who will run into liquidity issues will increase as the economy tanks. It’s only a matter of time before we see short sales hit the market. It will be at least another two years for prices to hit bottom. Don’t worry, we will let you know when it’s time to go hunting for deals.
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
Wrapping up 2022
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.
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.
Dispatching Maintenance 2023
Dispatching fees will go up from $26 to $30 in 2023. Most of our competitors charge about 10% over invoice for dispatching repairs or hide the invoice and never notify their clients they are marking up invoices. We charge a modest $30 to dispatching and this is what it includes:
- Diagnosing the problem with the tenant.
- Dispatching the right vendor for the right job.
- Documenting the problem.
- Getting an estimate.
- Getting an approval (if necessary)
- Confirming the vendor is in progress.
- Getting documentation the job is completed.
- Paying the vendor.
We will not be increasing our property management fees even though the prices of everything else on the planet has gone up.
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.