Investing in Las Vegas Condos
Investing in Las Vegas Condos and High Rises could prove to be a very profitable venture. Real estate investments, although risky, are not nearly as risky as investments in the stock market. Small Las Vegas High Rise Condos were selling for upwards of $700,000+ back in 2006 and 2007. These same condominium units can be purchased TODAY for around $150,000 and the market is bound to recover. If you look at the sales history for Condominium units at Sky Las Vegas or Trump Towers Las Vegas, you’ll learn that BOTH buildings sold out of inventory WELL BEFORE construction even finished. People frantically bought up luxurious high-rise condos in Las Vegas for $700,000 to $15,000,000. Today you can purchase a top notch 3,500+ SQ Ft penthouse in Sky Las Vegas for around $1,500,000. A smaller 1,000 SQ FT unit costs around $225,000. These $220,000 units were selling for over $700,000 back in 2007. Construction costs on high rises in Las Vegas are right around $360-$450 a sq ft, so most high rises can be bought BELOW replacement cost, which make units in Sky Las Vegas incredibly investments. Rental returns on these aren’t that great with HOA fees as high as they are, but appreciation will more than make up for it.
The Las Vegas Real Estate crash burned a lot of investors who bought back in 2007 during the “boom” but now that the market has crashed, it has created a once in a lifetime buying opportunity. I’m not here to sell you anything, as I’m not a real-estate agent. I’m a regular guy who moved to Las Vegas back in late 2010 in order to buy some property at these rock bottom prices. I currently live in a 985 SQ FT luxury condominium in Sky Las Vegas – which is located on the Strip next to Circus-Cirus and Fontainebleau. I looked into the sales history for the unit I bought, and my unit sold for over $700,000 back in 2007. The reason condominium units are so cheap today are because everyone who paid $700,000+ for their units are now owe more money on their mortgage than their condo is worth, so they let their banks re-possess their condos, and the banks quickly list the condo for sale in order to recoup their investment. As more and more banks do this, Condominium prices get pushed further and further down. Things are starting to improve though, but not nearly as quickly as the rate of improvement in single family homes. Since the crash of 2009, Single Family homes have doubled in value from the 2010 bottom to 2015 today. High Rise Condos on the other hand have only marginally increased in value. I bought my own unit for ~$170,000 in Sky Las Vegas in 2010 and it’s worth about $235,000 today. Not a huge move, but with the Sahara relaunched as SLS and the Rock n Rio concert venue opening in 2015, I expect prices to increase quite a bit. Resort World is also opening on the North End of the strip, so things will definitely move up from here.
I remember when I was shopping for a Condo to purchase, I made FIVE offers on FIVE separate properties in Panorama Towers – another luxury high-rise in Las Vegas. Out of the Five offers I made (all of which were VERY CLOSE to the list price, one was actually AT the list price), guess how many got back to me with answers. Only one. That’s right. Only ONE person even BOTHERED to reply back to my “all cash” offers and his counter-offer was 20% higher than his own list price. I learned that the other four properties, which never replied back to my offer, were all sold at OVER list price with multiple bidders on each property. The fact is, Las Vegas High Rise Condos are moving. They are being actively bought and sold, which is great for the market. It means there are buyers out there. I ended up purchasing my own unit in Sky Las Vegas at a great price, and I’m prepared to sit on it until my investment begins to pay dividends. The thing about investing in Las Vegas Condos is that high-rise condos can have monthly HOA fees of around $500 – $1,000 a month plus property taxes. As an investor, you can easily offset these fees and make a monthly profit by renting out your properties, if you don’t intend to live in them yourself. While the overall rental yields / cashflows aren’t great, but investors can still expect 3%-4% rental yields after HOAs/taxes.
One reason that Las Vegas Condos will appreciate is that they were heavily over-sold after the real-estate crash. Condos today be purchased for a FRACTION of their sales price back in 2007. In fact, Condos today can be purchased for a FRACTION of their construction costs. Constructing luxury condos, isn’t exactly cheap. Another reason Las Vegas High Rise Condos will appreciate in value is because income tax in Nevada is 0%. Nevada is one of the only states in the U.S. Without a state income tax or any business profit tax. This applies to individuals as well as corporations.
Current market conditions in Las Vegas are very depressed and cannot remain this low for long. The Las Vegas housing and real-estate market was one of the hardest hit in the United States, and what that means is that there’s opportunity here. $6,000,000 Luxury Penthouses are going for $1,500,000. Many properties are receiving multiple bids. I don’t recommend you go out and buy a condo without any of your own research. I urge investors to go out there and do their own due-diligence before making any investments. Those looking to invest in super-luxurious condominiums can look into units at the Mandarin Oriental, Vdara or Veer Towers. Those looking for hotel condos should look into Signature MGM Grand, Palms Place or Trump Towers. For a full list of high-rise condos in Las Vegas, simply browse the right hand side of this website.