Buy a Property for $50k - Rent it for $1k per Month?!

'Where in Canada can you buy a $50,000 property and rent it for $1,000 a month?' was the lead-in for an article on the Las Vegas real estate market in the Montreal Gazette this past Friday. The article implied that paying $50k for a property and being able to lease it out at $1k per month was easy in Las Vegas and other distressed US markets.

If so, I would sure like to know where these properties are. I can’t seem to find any listed in our local Las Vegas MLS system. I would be happy to buy at least 10 of them this week myself! Already our phones are ringing off the hook from Canadian buyers who saw the article and don’t believe us when we tell them it was all hype. They think we are “hiding” the listings from them! (I have yet to see a real estate agent that can afford to “hide” listings and stay in business.)

Where does the press come up with these statistics?? They seem to have little or no basis in fact. Another news article posted recently said that the Las Vegas real estate market was going to go down another 10% to 12%. Again, this was reported with no supporting documentation, just a gobbled gook of random statistics that had no bearing on what was reported. But because of articles like these, we have to spend a lot of time re-educating buyers on fact vs. fiction and what is actually possible.

Sure, we absolutely have low cost homes for sale in Vegas. But they are in neighborhoods where the purchase price reflects the potential rental income as well. (And Buyers, please check those Metro crime statistics before making a purchase.) True, many of the Las Vegas short sale properties are listed way below market just to get someone to put in an offer. But the banks always do their own appraisal before approving a short sale, and will usually counter with a price that is within 5% of the actual market value.

That is not to say that you can’t get a terrific return on Las Vegas investment properties. It is absolutely possible to buy a cute newer home for around $100k and get $1k or more per month rental income. This is actually a great time to buy, as the latest statistics are finally showing a small upward trend in Las Vegas sales prices (see Las Vegas real estate weekly trends) and inventory has come down to a five year low. Just between October 1st and November 1st single family home inventory went from 11,500 active listings down to 10,500 active listings. (For homes under $200k we are once again experiencing multiple offer situations because investors and second home buyers from all over the world are trying to take advantage of the low cost to own.)

Not to mention, prices have dropped substantially, 50% to 60%, from just a few years ago. With the strength of the Canadian dollar vs. the US dollar, it makes all the sense in the world for Canadians to finally buy that snowbird property in the States. And the Australian buyers are also taking advantage of the favorable foreign exchange rates to purchase second homes and investment property in Las Vegas.

But someone somewhere has got to finally hold the press accountable for what they print. They aren’t doing anyone any favors by not checking the facts first. The client that buys that $50k property and expects to get $1k per month in rent is going to be sadly disappointed. The client that didn’t buy because he/she read that property prices were going to decline further is going to be really upset when they come back six months later and find that the home he/she wanted is even more expensive.

Las Vegas Real Estate Weekly Market Report - October 31st

October 31, 2011 - Want to know where the Las Vegas Real Estate Market is headed? Here are your weekly market statistics from Prudential Americana Group, REALTORS®.

•Your Market Report for Single Family homes in Las Vegas. Homes in Las Vegas.

• Your Market Report for Condos in Las Vegas. Condos in Las Vegas.

•Your Market Report for Single Family homes in Henderson. Homes in Henderson.

•Your Market Report for Condos in Henderson. Condos in Henderson.

•Your Market Report for Single Family homes in North Las Vegas. Homes in North Las Vegas.

•Your Market Report for Condos in North Las Vegas. Condos in North Las Vegas.

Help for Some Las Vegas Homeowners May Be On the Way!

While exact details have not yet been announced, it seems that help for some Las Vegas homeowners may be on the way as early as November 15th. Homeowners that have a mortgage loan guaranteed by either Freddie Mac or Fannie Mae may be able to refinance soon, even though they are underwater.

The Las Vegas real estate market was one of the hardest hit when the real estate bubble burst. Yet many Las Vegas homeowners have honored their commitment to lenders by not walking away from their homes and keeping their loans current, even though all around them they saw their neighbors bailing out. Some of those homeowners are about to reap the reward for meeting their obligations if the new plan announced by the White House comes through in November.

Homeowners with Las Vegas mortgage loans that were purchased or guaranteed by Fannie Mae or Freddie Mac on or before May 31, 2009 and have a current loan to value (LTV) of over 80% are eligible. The loan MUST be current with no late payments in the last six months and no more than one late in the last 12 months. There will be no ceiling on the loan to value and possibly an appraisal will not even be needed.

The first step is to determine if your home loan qualifies. Go to either: www.fanniemae.com/loanlookup or www.freddiemac.com/corporate to see if your loan is listed by either Fannie Mae or Freddie Mac.

Even a small decrease in the rate should give homeowners a significant monthly payment reduction. A $200k mortgage loan refinanced from 6% to 4.5% would result in almost a $200 monthly saving. And it may be that under the new guidelines the costs to refinance the loan can be rolled into the mortgage amount so that there is no out of pocket expense.

If your loan is listed and you have been current on your mortgage payments, the next step would be to contact a lender that will be participating in the new refinance program. That way as soon as the exact details are released, you will be notified of the terms and rates. We do have a list of lenders that will be participating in the refinance program, so please feel free to contact us at sold@greatlasvegashomes.com  and put “Fannie Mae/Freddie Mac refinance program” in the subject line. We will then forward your contact information on to a participating lender so you can be first in line for the new program.

Then stay tuned for the rest of the details as they are released!