The difference between the deserts and the city continues to characterize the Las Vegas real estate market. It’s a marketplace known for abandoned estates, world-class condos, and extravagant living.
That said, it is a fun market to flip houses in, and it’s been told that changes happen as quickly as a game of Texas Hold ’em Poker. However, when it comes to operations, renovating, and flipping houses in Las Vegas real estate market is no different than everywhere else in the world.
If you’re thinking about investing in Las Vegas real estate, house flipping might be your priority. Purchasing residences cheap and then reselling them for a profit might provide a pleasant living environment. There’s a lot more to be said, though. Our article will teach you all you need to know about flipping homes in Las Vegas.
Las Vegas Housing Market: 2022 Forecast
The real estate investment market in Las Vegas is rising. Single-family house sales are growing yearly, and prices are hitting new levels. Inventory decreases month after month, and the need is greater than supply. People continue to migrate to Las Vegas from more costly places, especially Southern California, increasing housing demand. This trend has escalated throughout the pandemic, with house sales in the area hitting their top point in 14 years.
According to statistics, in November, the median sales price of previously owned single-family houses went to $410,000, dropping 4.1% from September and 4.6% from October 2020. Additionally, 79.9% of properties sold in November had been on the marketplace for less than 30 days, opposed to 83.8% in October of last year.
In the Luxury Sector the previous month, 107 homes sold for $1 million or even more, dropping from 119 in September. The Luxury Market’s median sales price increased to $1,425,000 in September, up from $1,275,000. The median sales price increased by $150,000.
What are the real estate market forecasts for Las Vegas in 2022? House prices in Las Vegas increased by roughly 30.4% from 2017 to 2018. Due to a lack of properties and great demand, Las Vegas home values have risen dramatically in the last two years.
If they buy today, short-term real estate investors can make a lot of money. For example, despite the lousy economy, the stock market is on the run, with record prices and soaring sales. Likewise, despite the pandemic’s severe economic effect, housing values reached new highs last year, and this trend is expected to continue in 2022.
How can you know the best neighborhoods to look into when flipping houses in Las Vegas? Mashvisor is here to help you. With Mashvisor’s Real Estate Heatmap tool, neighborhood analysis that can take weeks to complete can now be done in a matter of minutes!
A real estate heatmap uses predictive analytics and properties data to work effortlessly. The real estate heatmap will display how different locations are behaving on average using various colors (green, yellow, and red) in different shades after being activated.
You can use a variety of parameters to narrow down your search, depending on the real estate heatmap tool you’re using. Mashvisor’s Real Estate Heatmap tool enables property investors to conduct a real estate market analysis to identify locations with the best rental income, cash on cash return, and Airbnb occupancy rate.
How to Determine Whether a Las Vegas Property Is a Good Investment
Some homes are easier for flipping than others, as experienced investors know. It’s not always about finding the best deal but rather about obtaining the best return on investment. How can you identify the difference between the two?
Locating a home priced beneath market value is one of the most obvious signs. However, you’re already on your path to recouping your investment when you purchase a property for less than its value. That is particularly true if you can discover a low-cost property in a desirable area.
When flipping houses in Las Vegas, it also helps to search for the most appealing qualities to Las Vegas house buyers. According to one study, storage, outdoor living area, wooden floors, and outside lighting are the most important features for home buyers. Homes with these qualities are one step closer to selling the house for a profit.
In a period of short-term rentals, the size of a house is also a factor to consider. Properties that allow owners to rent out a parent suite or bedrooms for additional income, especially in tourist-heavy places like Las Vegas and Lake Tahoe, can appeal to purchasers. The bigger a house feels, the better chance you will receive a good return on investment.
Before making an offer, think about the property’s present state, the cost of renovations, closing fees, selling costs when you’re prepared to sell, and how the flipped home will compare to other similar properties in the neighborhood.
A beginner house flipper will require expert direction when investing in real estate. Still, even real professionals can benefit from a real estate agent’s assistance, especially when performing a comparative market analysis.
Finding comparable properties and gathering their property information for a comparative market analysis can be time-consuming and stressful. That is particularly true for new investors. So how can you make this process easier? You can do it now with just a few clicks with real estate analysis software—Mashvisor!
When implementing your real estate investment strategy, you can find the most remarkable investment properties for sale in your city or area of preference and receive access to its records using our property search tools. You can then see a list of current sales of similar homes in the region as you begin to analyze the investment property using the real estate property calculator.
Flipping Houses In Las Vegas: How to Turn a Profit
Flipping a home for profit can be a tricky business, especially when market conditions might change, causing you to lose money. However, when investing in Las Vegas real estate, there are a few factors to consider to reduce the risk of losing money.
Most leading real estate investors advise buying a home for 70% to 80% of its After Repair Value (how much it will be worth after you fix and flip it) without the cost of repairs. To make sure you receive your investment back, you’ll need a clear sense of how much the renovations will cost before making the offer.
Many investors follow the “$20 per square foot” rule. That indicates that a complete aesthetic “repair on the property will cost around $20 per square foot. New floors, new painting, kitchen and bathroom cabinetry and worktops, baseboards, wiring and plumbing equipment, window treatments, and doors are all common fixes included in this price.
A 1,500 square-foot property can cost you almost $30,000 in renovations alone if you use this strategy. To calculate the entire cost of your flipping houses in Las Vegas, add this to the costs of selling your house (MLS listings, real estate fees, prospective settlement costs, real estate transfer tax, and so on).
Now let’s perform some calculations to see how it works.
Let’s say that Las Vegas has a median home value of $275,000. Because the median price per square foot is $168, we may estimate that the median home has 1,637 square feet. You could make an offer of $159,760 ($275,000 – $82,500 below market value – $32,740 in renovations) if you followed the 70% and $20 per square foot rules.
You’ll have to spend $192,500 in cash for the purchase cost plus repairs. In addition, real estate commission charges (typically 6% of the home’s ultimate selling price), real estate transfer fees ($1.95 per $500 in most areas), and prospective closing charges must all be considered.
Your real estate agent charges would be $16,500, and your transaction tax would be $1,072.50 if you were to resell the house for $275,000. The buyer typically pays closing fees to about 3% of the home’s sale value. On the other hand, many purchasers may require that the seller cover some or all of the closing fees to seal the transaction. In the worst-case situation, closing fees will be around $8,250. According to that, your profit would be $56,677.50.
Keep in mind that this sum does not include the time required to sell your home. In a desirable area, you might have no trouble selling it as soon as it’s up for viewing. In cooler markets, it may take a bit longer to sell.
Flipping Houses In Las Vegas: Cash vs Loan
One of the most common mistakes made by beginner house flippers is not having sufficient cash on hand to complete the project correctly. Some investors would cut corners or choose the cheapest materials to avoid acquiring a loan, but this isn’t always the wisest option.
House flipping is costly, and how can you invest in real estate if you don’t have cash? To make the fix and flip effective, you may need to take out a loan in some situations.
On the other hand, getting a loan can be just as dangerous as flipping itself. You’re risking your potential to profit when you include a lender, and profits are never certain when flipping houses. That indicates that you must find a way to repay your loan even if you lose cash. When you pay with money, you’re the only one who is getting affected.
You don’t have to rely solely on standard bank financing if you’re flipping houses in Las Vegas. HELOCs and HELs and hard money loans and loans from relatives can be utilized to fund flips. However, you may be able to rely only on cash deals and avoid lenders if you start earning money from your flips.
The best move you can do is to look into all of your options. Make sure you understand the entire cost of your financing so you don’t wind up with a negative ROI or a loan burden you can’t afford to pay.
How to Find Homes to Flip
Getting a real estate agent might help you expedite your hunt for a house to flip. An agent will be familiar with the best areas for flipping houses, allowing them to swiftly filter possibilities that are relevant to you and offer further real estate investment advice for your property buy and flip.
However, you don’t have to hire a real estate agent if you’re interested in flipping houses in Las Vegas, as you can use software like Mashvisor to find the best real estate investment.
Mashvisor provides you with all of the tools you need to perform a complete real estate investment analysis, from searching for an investment property to analyzing properties and neighborhoods to comparing vast numbers of properties to discover the right ones for investing. This enables you to make effective real estate investments to help you achieve business goals.
Due to its importance in Nevada tourism, properties in Las Vegas will always be needed, especially for investors looking for short-term rentals. House prices have grown 10.9% in the last year, with another 6.2% projected this year. There is less rivalry for investors looking for their next chance now that demand has calmed slightly.
For years, house flipping has been a famous real estate investment concept that has thrived even in seller’s marketplaces. The idea is simple: buy a house, fix it up, and then resell it for a profit. Many investors make their income purely by flipping houses, but it’s a bit more complex than you assume.
So when flipping houses in Las Vegas, be sure to follow our guide, do your research, implement the right tools, talk with professionals, and after you’ve done every step correctly, you can relax and watch how your profit is rising!