When anyone thinks about Las Vegas, it’s easy to immediately think about fortunes won and lost in the blink of an eye. You might think about casinos, mob history, showgirls, and high-end shopping and dining. An idea of excess is easily conjured when one is discussing Las Vegas.
That was perhaps all that Las Vegas was about once upon a time.
Things have changed, though, and so has this city.
Beyond the famous Las Vegas Strip lies a real estate market that’s as dynamic as it is diverse, presenting savvy investors with an array of opportunities. While the Strip itself holds plenty of potential for investors, the true treasure trove of long-term profitability lies in the city’s burgeoning neighborhoods that land outside of the casino-lined streets along the Strip.
Today, we want to take some time to explore how real estate investors can set their sights on profitable rental homes in Las Vegas, away from the flashing lights, late night hours, and constant activity.
Las Vegas: The Geography
Las Vegas is located in a broad desert valley. The city is found in the extreme southern part of Nevada, about four-and-a-half hours from Phoenix and maybe the same distance from Los Angeles. Mountains surrounding the valley where Las Vegas is located are known to extend 2,000 to 10,000 feet above the valley floor.
The Las Vegas Valley covers about 600 square miles and runs from northwest to southeast. The valley is bounded on the north by the Sheep Range, while Boulder City and the Lake Mead National Recreation Area are generally considered its southern border. To the west are the Spring Mountains, which include Mt. Charleston, the region’s highest peak at 11,918 feet.
You’ll notice several smaller ranges that line the eastern rim of the valley, including the McCullough Range, the Muddy Mountains, the Black Mountains, and the Eldorado Range.
In the middle of all of that desert valley and mountainous range is the city of Las Vegas. There are also a number of suburban neighborhoods that have grown around the Strip and the “downtown” section of Las Vegas. This growth was inspired by the demand for housing in the market, and the need to live in communities that are less congested than where all the action tends to be.
Understanding the Las Vegas Real Estate Market
Las Vegas is often thought about as a tourist destination. This is understandable. More than 30 million people visit Vegas every year. The economy counts on this; the average expenditure per visitor is around $1,100.
But, Las Vegas is more than just a tourist destination; it’s a city with a resilient housing market that has successfully bounced back from the 2008 housing crisis. If you remember 2008, Las Vegas suffered more than many other markets. Housing values dropped dramatically, foreclosures were at a national high, and there was a real feeling of desperation among real estate investors and homeowners.
Things have changed. And, while several “experts” might have been concerned about a new real estate bubble or crash after the recent wins the market has experienced, no such thing took place. Las Vegas is in a strong position, especially when we’re talking about its real estate market.
Today, it’s one of the fastest-growing urban centers in the United States. With a strong economic forecast sustained by a growing number of diverse industries, a comparatively low cost of living, and no state income tax, the city is an attractive prospect for many. There are people moving to Las Vegas from California, the East Coast, the Midwest, and even from outside of the country. Las Vegas is attracting young people, families, professionals, students, and retirees.
The real estate market reflects this growth, with both home values and rental rates on an upward trajectory. Compared to national averages, home prices have been appreciating more quickly, suggesting the potential for significant returns for those who invest wisely.
Las Vegas Neighborhoods Off The Beaten Track
You know Las Vegas is an excellent market for real estate investments; we don’t have to sell you too hard on that.
But, where should you buy?
While it might be tempting to invest in the heart of the city, right on the Strip, where the rental demand appears the highest, the competition can be fierce. There are also limitations to what you can buy and reasonably rent out in such a traffic-heavy, commercial area.
Instead of looking to the Strip, consider directing your attention to neighborhoods like Summerlin, Green Valley, or Henderson.
- Summerlin offers a mix of upscale and mid-range housing options, with a reputation for well-planned communities and top-notch amenities such as golf courses, parks, and retail. You’ll find that it’s full of chain restaurants as well as local specialty restaurants. There are large shopping centers and small boutiques. Tenants flock here for the quiet, residential surroundings and the abundance of amenities and conveniences that are close by. Outdoor enthusiasts will love being close to Red Rock Canyon and other hiking, biking, fishing, and equestrian spots.
- Green Valley, often considered one of the best places to live in the state, is a family-friendly neighborhood with a strong rental market. Like Summerlin, it’s a master-planned community that seamlessly blends residential neighborhoods with commercial spaces. There are good schools, easy parking, less traffic than what you’d find on the Strip. Medical facilities are also included in this community, and there’s plenty of green space for residents to enjoy as well.
- Henderson, consistently recognized for its quality of life, is an ideal location for long-term investments. This has a uniquely suburban feel, and it’s growing significantly, which is creating a stable job market.
- Enterprise is just south of the Las Vegas Strip and close to both the Strip and Summerlin. This area has easy access to major highways and is seeing new businesses and entertainment moving in due to the large amount of land available. This is where investors will want to buy new construction.
- North Las Vegas is affordable and offers investors a mixture of both new and old homes. Another benefit to investing here is that it’s the home of a United States Air Force Base. North Las Vegas offers more affordable housing and an easy commute to downtown Vegas or the Strip.
These neighborhoods not only boast a competitive market for renters but also feature well-performing schools, access to employment centers, and a variety of leisure options, making them desirable for a wide range of tenants.
Identifying Profitable Properties in Las Vegas
To identify properties that will yield the best returns, it’s crucial to analyze the rental market closely. Look for homes that are priced within your budget and even below the median but have good potential for rental income. A multi-bedroom property with a flexible layout and outdoor space can cater to tenants who have children or roommates, while a low-maintenance condominium near amenities might appeal to a broader market, including professionals and retirees.
Consider the property’s condition as well. Not only does a well-maintained home attract higher-quality tenants willing to pay more, but it also reduces maintenance costs in the long run. In Las Vegas, climate control is a significant factor, so HVAC systems, insulation, and energy-efficient windows can be selling points for prospective tenants. Resist the urge to invest in a fixer-upper. Those rehab plans will always take longer and cost more than you expect.
Finally, factor in the property taxes, insurance, and any homeowners’ association fees to determine the full cost of ownership. Always aim for a positive cash flow, and bear in mind the potential for appreciation over time.
Why Las Vegas is Prime for Real Estate Investment
In a city that’s a beacon for growth and a melting pot of economic diversity, the potential for real estate investment is vast. Las Vegas’s real estate market, buoyed by a strong local economy and a robust tourism industry, presents ample opportunities for investors willing to look beyond the obvious real estate ventures on the Strip.
With sensible property selection, a focus on high-demand locales, and a sound understanding of local trends and demographics, investing in Las Vegas can be a lucrative and rewarding endeavor. As always, thorough research and the guidance of experienced professionals are key to unlocking the full potential of this high-octane market.
Las Vegas is much more than the Strip and the city’s well-known neighborhoods. If you’re willing to take a look at some lesser-known areas, you’ll find you get more for your money and a far more predictable and stable outcome over the years that you hold your investment. Real estate investors can uncover gems that offer not only immediate rental income but also the promise of long-term appreciation.
With careful planning and a strategic approach, Las Vegas is more than just a location for a great vacation—it’s a destination for real estate prosperity. We can tell you more and help make a good property match based on your investment goals.
Please contact us at New West Property Management. Our team expertly manages residential rental homes in Las Vegas and throughout Clark County, including Henderson and North Las Vegas.
