Thinking about investing? Here are the benefits of owning rental property in Vegas

We all, to some extent, recognize the potential financial rewards we could attain from real estate investing. It goes without saying that there are many benefits of investing in real estate that outweigh the costs, and you as a real estate investor could be earning a steady flow of income to secure financial freedom for the long haul.

Whether you want to quit your mundane 9-5 job and become a full time real estate investor and/or save up for your retirement, you are on the right path to fulfill your financial goals sooner than you might think. It takes one rental property to establish your real estate business and get yourself a reliable source of constant rental income.

This year definitely looks promising for investors, and your real estate investments will earn you high returns indeed. The real estate market and the housing conditions are in tip top shape and you can rest assured you will be making money if you invest in the right locations. It is a simple equation: if the economy is growing, the housing market will flourish and there will be an abundance of real estate opportunities to tap into across the country.

Before you set forth with buying your first rental property, make sure you conduct real estate market analysis and consult a real estate professional. If you want to reap financial rewards from investing, you have to make wise and calculated real estate investment decisions in order to grow and diversify your portfolio. Do not depend on luck to win you money in real estate, there is no magic formula, it is all about studying your potential investment before closing any deal. Moreover, if you want to succeed in this industry, you have to know everything about real estate including the benefits you will gain in the short and long term. So, let us get started: here will discuss the major benefits of investing in real estate today.

The Benefits of Real Estate Investing

Steady Income

This is a no brainer! The majority of people invest in real estate for the steady flow of cash they earn in the form of rental income. This passive income is a huge incentive to get you started and buy your first rental property. Depending on the location, you could be earning significant income to cover your expenses and make you extra money on the side. Urban cities or towns with colleges and universities tend to reap higher income because the demand is always high in those areas. If chosen wisely, you can secure a steady flow of income for a long time and even save for retirement. And you do not have to stop at investing in one property at a time; you can pick up the pace and invest in multiple rental properties all at once to increase your positive cash flow and diversify your real estate investment portfolio. You can manage by hiring a professional property management professional if the workload becomes too much. One tip to keep in mind: location, location, location is key to smart real estate investing. Don’t forget to choose a prime location to reap off the benefits of investing in real estate.

Long Term Financial Security

The benefits of investing in real estate provide investors with long term financial security. When you have a steady flow of cash in succession, the rewards of this investment bring on financial rewards for a long time. Owning a rental property can afford investors a sense of security because of the property’s appreciation in value over time. This means that your property’s value is most likely going to increase because land and buildings are appreciating assets. With that said, however, there is no guarantee the value will increase indefinitely. That is why it is always recommended to thoroughly research the location before closing the deal on the house of choice.

Tax Benefits

One of the benefits of investing in real estate is the tax exemptions investors get from owning a rental property. This is a major reason why many choose to invest in real estate. For example, rental income is not subject to self-employment tax. In addition, the government offers tax breaks for property depreciation, insurance, maintenance repairs, travel expenses, legal fees, and property taxes. Real estate investors are also entitled to lower tax rates for their long-term investments. Icing on the cake!

Mortgage Payments Are Covered

The benefits of investing in real estate include your tenants as well. Simply put, the rental income you receive each month is more than enough to cover your expenses, including your mortgage payments. Essentially, your tenant is actually the one paying your mortgage. That is why it is important to keep your tenants happy and avoid or mitigate the negative repercussions of vacancy at all cost.

Real Estate Appreciation

If you already are in real estate investment or are just starting out, you do understand that real estate is not a short-term investment plan. On the contrary, the benefits of investing in real estate include the appreciation of capital assets (aka land) over time. In other words, your property’s value will be worth way more 30 years from now, hence why investors are in it for the long run.

Inflation

One of the benefits of investing in real estate is a hedge against inflation. With high inflation, your rental income and property value increase significantly. Real estate investors welcome inflation with open arms because as the cost of living goes up, so does their cash flow.

You Are Your Own Decision Maker

Forget about your 9-5 boring job, the best part about real estate is becoming your own boss. Just like any other business, you have the complete autonomy and control over your real estate investment strategies as well as your failures and successes. You call the shots on which property to invest in, the tenants who will live under your roof, how much rental income to charge per month, and who will manage and maintain the property as a whole. The benefits of investing in real estate make you your own decision maker.

There is no doubt that the housing market is a lucrative business for many investors and entrepreneurs. Many recognize the benefits of investing in an income property to reap financial rewards as well as financial security for a long time. If you made up your mind after reading about the benefits of investing in real estate, let’s start to look at a location – Las Vegas, Nevada.

Becoming an investor

Being a real estate investor isn’t always glamorous but it is one of the best ways to build wealth over the long-haul, especially for the entrepreneurial-minded.

Owning rental properties can be a fantastic way to build wealth and leave a legacy for your children. There are several benefits to owning a rental property, we go into detail in the previous section. One of the main attractions is being able to create and provide a source of passive income. For some landlords, pride of ownership may be part of the allure. It can be rewarding to be able to confidently manage and make decisions concerning the property you own. Others may be more interested in the monetary benefits as well as the security of owning rental property.

In 2016, Nevada ranked number 9 for states people are moving to (slipping by one spot from the previous year). Clearly Nevada continues to be an in-demand place to relocate.

Here’s some of the many reasons why!

The Economy

Since 2010 the growth rate in the state has been an average of 2.4 percent which is higher than the national state economic growth rate of 1.7. Industries that suffered during the recession, such as gaming and tourism, have been returning to their pre-recession levels of success. Nevada is also the site of new business ventures, including the Tesla factory near Reno, the Faraday Future electric car plant in North Las Vegas, and the $350 million renovation of downtown Las Vegas promoted by Tony Hsieh of Zappos.com.

No Income Tax and Average Cost of Living

While the cost of living here isn’t the lowest it can be in the U.S., it’s certainly lower than many states. According to the Expatistan Cost of Living Index, the cost of living in the largest city, Las Vegas, Nevada, ranks 28th of out 50 states in the U.S. Even more significant, there is no state income tax in Nevada which is a very attractive financial benefit to living in the state.

Retirement

Nevada is a top location for retirees, no doubt due to the cost of living, pleasant weather and recreational and entertainment opportunities. Cities such as Mesquite are attracting large numbers of retirees. Mesquite was in fact the #1 place to retire on a list created by InsiderMonkey in 2016.

Start Ups and Technology

Because of the lack of state income tax and other business regulations, Nevada has become a targeted location for startups and technological firms. One example is the Downtown Las Vegas project funded by Zappos and others to encourage more businesses, particularly hi-tech firms, and technology professionals to relocate to Las Vegas and Nevada and create a new version of Silicon Valley. Tech.co called Las Vegas one of the top seven cities for startups in its 2015 report and projects like Switch, a major Las Vegas data company, are on track to make Nevada, according to Governor Brian Sandoval, “the most digitally connected state in the United States.”

Entertainment

Anyone who lives in Las Vegas knows, if you’re looking for fun, there is no shortage of options in the state. From gambling to concerts to shows, you can pretty much find it all in Nevada, and that’s not just limited to glitzy high-tourist areas like Las Vegas.

Food

Nevada is a foodie paradise and again, you don’t have to live in restaurant-heavy areas like Las Vegas or Reno to appreciate some delicious cuisine. Nevada’s cultural diversity has led to a variety of ethnic cuisine’s availability around the state. You can find everything from traditional Basque meals to authentic Thai cuisine to good ‘ole cowboy cookouts with BBQ.

Natural spaces

There are so many beautiful outdoor spaces to list that no matter what short list you come up with, someone’s favorite is sure to be left out. Many of these are easily accessed from major cities as well. Some favorites on the southern to central end of the state are the Red Rock Canyon national conservation area, Great Basin National Park, Valley of Fire State Park, Cathedral Gorge, Lake Mead National Recreation Area, the Colorado River, Pahranagat National Wildlife Refuge, and sections of Death Valley National Park.

And in the central and northern areas of Nevada, just a short list of beautiful places includes Lake Tahoe, Black Rock Desert, Pyramid Lake, the Humboldt-Toiyabe National Forest, Cake Lake State Park, Sheldon National Antelope Refuge, Galena Creek Regional Park, and so many more! In addition to all that, Nevada has more natural hot springs throughout the state than any other state in the U.S.

Climate

Nevada is blessed with some wonderful weather. While it’s definitely hot in some parts of the state in the summer, the dry heat and lack of humidity makes the heat generally tolerable.

Likewise depending upon where you live in the state, winters can be quite lovely and have a fantastic array of winter sports options. If snow isn’t your thing, living in the southern area of the state means fairly mild winters with little, if any, snow.

Culture

One thing that’s hard to quantify about the state is the people. We all have different views and cultures, but there’s a definite “Western” state of mind among Nevadans, perhaps informed by our cowboy history which meant relying on ingenuity, independence and perseverance to settle in and grow the state. Nevadans also tend to be extremely proud of their state, whether they were born and bred there or are a transplant.

So, what are the unique advantages of Las Vegas for the investors?

Las Vegas, the fifth city in the list of best places to buy investment property in 2017 from mashvisor.com, is the most affordable one, with some very reasonable median property prices. Although Las Vegas has been recovering well from the real estate crisis a few years ago, properties are still undervalued by as much as 40%. This means that now is the time to buy a rental property here because this trend is not likely to continue for much longer.

High Return

Las Vegas is one of the few major metro areas where you can still get positive cash flows. The reason you can get a high return include:

• Positive Cash Flow – Rents are high enough to cover debt service (mortgage) plus all recurring costs and a good profit.
• Zero State Income Taxes – Nevada has no state income tax.
• Low Property Taxes – There are metro areas in the US with property taxes exceeding 2.5% as opposed to Las Vegas where the average is about 0.86%.
• Low Maintenance Costs – Maintenance costs are also a direct hit on profit. The desert environment in which Las Vegas is located has resulted in properties built with: tile roofs, desert landscaping, stucco siding, metal doors, and window frames and concrete block fences all of which require little or no maintenance.

Low Risk

• Landlord Friendly Laws – Nevada is a business-friendly state. Its pro-business laws apply to rental properties as well. There are no rental control laws in Las Vegas and evictions typically take 30 days or less and usually cost less than $500. In comparison, in California it can take up to one year to evict a knowledgeable tenant. Landlord friendly laws protect your investments.
• Rental Market Stability – The Las Vegas rental market is extremely stable. For example, during the 2008 market crash when real estate property prices in Las Vegas plunged approximately 56% (the worst drop in US history), rental rates did not decrease; your cash flow and return on investment were not impacted.

Probable Appreciation

Long term profitability and appreciation are dependent on population and jobs.

• Sustained Population Growth and No Urban Sprawl – Market demand is what determines the value of an investment property. If the area has a stable or increasing population, demand will remain stable or increase. If people are moving out of an area (either to other cities or due to urban sprawl) property values and rents will fall. Las Vegas’ population is expected to continue growing for the foreseeable future. And, due to the shortage of build-able land in the Las Vegas valley, there is almost no urban sprawl. Below is a diagram showing the Las Vegas metro area which is surrounded by federal land. In fact, only about 11% of the entire state of Nevada is privately owned. Given the population trend and land limitations, property values and rents in Las Vegas are expected to increase over time.
• Job Market Stability – The value of rental properties is no better than the jobs around it. Las Vegas is unique in that it attracts millions of tourists each year. And, as the market changed, Las Vegas has adapted. For example, today Las Vegas hosts millions of Chinese tourists each year. Before the Chinese it was the Japanese. And, in the future it will be another group. Las Vegas has always been excellent at adapting to the changing world.
• Economic numbers for Vegas are improving – Visitation numbers are up and this year’s convention schedule for Las Vegas is projected to be a record year with 70 new conventions added to all of the ones that already come to Vegas every year that contribute over $6 Billion in non-gaming revenue to the economy. Vegas made #10 for cities people are moving to so as long as more people are moving in then moving out, future numbers for what’s purchased today should only improve.

The cost of living, which is lower than in many comparable U.S. cities, has made Las Vegas a highly desirable place to call home.

The Las Vegas Metro area is home to over 2 million residents and is the largest city in the state of Nevada. More than 41 million people visit Las Vegas each year. The famous Las Vegas Strip is not located within the city limits of Las Vegas. The strip is actually under the jurisdiction of Clark County.

Single Family Rental (SFR) properties make up approximately 1/3rd of the single-family homes in the area. Las Vegas also has a healthy amount of resale properties which makes the supply of properties in this market relatively high. More broadly, Las Vegas is a renter’s market with nearly 50% of residents renting homes vs. owning in comparison, nationally, 37% of residents rent homes.