Las Vegas one of best places to buy a home to rent out
3 April 2013
As if the investors swarming Las Vegas didn’t know, the valley is one of the top places in the country to buy and then rent out a house, a new report says.
Las Vegas is the fifth-best market for buying single-family rentals, according to a new report from RealtyTrac. The median sales price of a three-bedroom home in Las Vegas is $115,000, but the average monthly rent is $1,575.
This produces a monthly cash flow — rental income minus the mortgage payment, property taxes, repairs and other costs — of $506.
Overall, Las Vegas has an average “cap rate” of 9.86 percent, fifth-highest in the country. That rate is a property’s annual profit divided by the purchase price.
The higher the rate, the better. Memphis, Tenn., was ranked the best place to buy a rental (10.38 percent cap rate); Saginaw, Mich., was second (10.32 percent); Toledo, Ohio, was third (10.26 percent); and Ocala, Fla., was fourth (10.23 percent).
Las Vegas Valley home buyers and brokers say there is fierce competition for all homes, distressed or otherwise. That’s because of the limited inventory and the strong appetite of cash investors, who flooded Las Vegas after the housing bust to buy cheap homes in bulk to use as rentals.
Courtesy of: http://www.vegasinc.com/news/2013/apr/03/las-vegas-one-best-places-buy-home-rent-out/