Investors gobbling up LV homes
(Photo: Ronda Churchill)
Investor home purchases in Las Vegas increased by 105.5% in 2021 over the previous year, according to Redfin, a web-based real estate service. Only Jacksonville had a higher increase in homes sold by investors – up 157% year-to-year.
Investor purchases made up 29.2% of all fourth quarter sales in Southern Nevada, says Redfin. Nationally, investors bought a record high 80,000 properties, or 18.4 % of homes purchased in the fourth quarter. More than three-quarters of investors paid cash.
Atlanta (32.7%) had the highest share of investor purchases in the fourth quarter, followed by Charlotte (32.1%), Jacksonville, FL (29.8%), Las Vegas (29.2%) and Phoenix (28.4%).
The news comes as Clark County prepares for a new law on July 1 requiring it to permit vacation rentals, which are currently outlawed in unincorporated areas of the county.
Last week, County Commissioners bemoaned the steep increases in rent in Southern Nevada.
Las Vegas is the most profitable location in the U.S. to own a vacation rental, according to Airbnb data collected by Compare the Market, a price comparison website based in the United Kingdom. The average monthly rent for an Airbnb in Las Vegas is nearly $10,500, which is 555% more than the average rent for a lease.
Property management investment companies are spending hundreds of millions of dollars to buy up short-term rentals throughout the U.S.
A town hall is scheduled Wednesday evening with State Assemblywoman Rochelle Nguyen, who championed the legislation to permit vacation rentals, and Clark County Commissioner Tick Segerblom.
“Many people feel strongly about short-term rentals, both pro and con,” said Commissioner Segerblom.
“AB 363 puts some limitations on short-term rentals,” Segerblom said in a news release. “The question for the County is, how much further should we go in placing restrictions on them. Residential quality of life must be the priority.”
“Investor demand is stronger than ever as home prices increase, allowing investors to charge higher rents and sell flipped homes for higher prices,” according to Redfin.
The median price of a single-family home in Las Vegas increased 25 percent year-to-year in 2021 to $400,000.
“Investors are chasing rising prices because rental payments are also skyrocketing, incentivizing investors who plan to rent out the homes they buy,” said Redfin economist Sheharyar Bokhari. “The supply shortage is also an advantage for landlords, as many people who can’t find a home to buy are forced to rent instead. Plus, investors who ‘flip’ homes see potential to turn a big profit as home prices soar.”
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