Hopes are high for Las Vegas businesses with the resurgence of international tourism. Can potential investors in the Las Vegas rental market be as optimistic?
The article below explores the Las Vegas rental market to guide people purchasing Las Vegas investment properties. We’ve also identified the ten best neighborhoods in the Las Vegas rental market.
The Nevada Rental Market: An Overview
Overall, the Nevada real estate market is looking bright and sunny. Experts expect the high property prices to continue in 2022 because of the stream of new residents from other states, coupled with the continuing housing inventory shortage.
The lack of inventory is also pushing rental prices up, aggravated by the growing number of remote job opportunities. People can now be employed by companies in states with higher wages, giving them the financial resources to rent, if not own, a house. Despite the high rental prices, the relatively low vacancy rate of short-term rentals indicates a sustainable rental market. Here’s a glimpse of the Nevada rental market, based on the latest Mashvisor data:
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- Median Property Price: $690,868
- Price per Square Foot: $412
- Number of Traditional Listings: 15,917
- Monthly Traditional Rental Income: $1,625
- Traditional Cash on Cash Return: 1.25%
- Price to Rent Ratio: 35
- Number of Airbnb Listings: 3,590
- Monthly Airbnb Rental Income: $3,247
- Airbnb Cash on Cash Return: 3.28%
- Airbnb Daily Rate: $206
- Airbnb Occupancy Rate: 61.4%
- Days on Market: 91
- Walk Score: 36
How Is the Rental Market in Las Vegas?
Like the Nevada housing market, the Las Vegas real estate market is expected to be hot in the current year. The demand for single-family homes remains high. Prices are increasing at record-breaking rates, but supply is still not enough. Currently, the Las Vegas housing market is ranked as the 10th most overvalued in the US.
Rental prices and occupancy rates are trending up in 2022, indicating a growth in demand for rentals in Las Vegas. The city’s declining unemployment rate is also boosting the Las Vegas rental market.
For sellers in the area, now is a good time to sell. Aside from the high demand, competition from other sellers is not very high. For buyers, take advantage of the low mortgage rates and lock in lower monthly payments to acquire property. With Las Vegas ranked as the fourth fastest-growing metro area in December 2021, it would seem like a bullish year for real estate investors.
To give you a better idea of what the Las Vegas rental market looks like, here are the key metrics from Mashvisor data.
- Median Property Price: $655,381
- Price per Square Foot: $436
- Number of Traditional Listings: 10,596
- Monthly Traditional Rental Income: $1,533
- Traditional Cash on Cash Return: 0.98%
- Price to Rent Ratio: 36
- Number of Airbnb Listings: 1,614
- Monthly Airbnb Rental Income: $2,905
- Airbnb Cash on Cash Return: 2.60%
- Airbnb Daily Rate: $197
- Airbnb Occupancy Rate: 61%
- Days on Market: 103
- Walk Score: 34
Key Drivers of the Las Vegas Rental Market
Las Vegas is a world-famous resort city often associated with gambling. But the city’s got so much more to offer besides its casinos. People considering a long-term stay in Las Vegas or stay for a short visit must look at the said reasons Las Vegas is a good place to be in.
Economy
The city is a mecca for shoppers, foodies, and artists. Its McCarran International Airport, the nation’s 10th busiest airport, houses independent airline Allegiant Air. It is also home to several fintech companies such as Pennymac and Order, IT companies (Aristocrat, Service Now), health services (Optum), and more.
Entertainment, gaming, and tourism remain the main drivers of the city’s economy. The Las Vegas Strip has 51 casinos that provide thousands of jobs to its locals.
The transfer of the prominent Raiders NFL team from Oakland, California and the emergence of the successful Vegas Golden Knights NHL team are drawing more people to the state. The Ultimate Fighting Championship (UFC) is also headquartered in Las Vegas, holding many prestigious UFC events at the MGM Grand Garden Arena.
The cost of living in Las Vegas is significantly lower than those in other metro areas like Los Angeles.
Tourist Attractions
The city is a popular tourist destination, and the influx of tourists is positive for Airbnb rental. Unknown to many, Sin City also offers plenty of family-friendly attractions, some of which are free. Among the attractions are:
The Arts Factory
The Art Factory place is like a modern art museum where tourists find various art forms beyond traditional painting and sculpture.
Bellagio Conservatory and Botanical Gardens
The Bellagio Conservatory and Botanical Gardens is a 14,000-square-foot indoor space with unique floral shows that appeal to the aesthetic sense of people.
Ethel M Chocolates and Cactus Garden
Yes, you read that right. Ethel M is a chocolate factory every visitor can tour to see chocolatiers and machines in action. And yes, it also houses the largest cactus garden in Nevada.
Surely, there are more reasons to visit Las Vegas.
Climate
Las Vegas’ climate is mostly dry and clear year-round. However, summer in Sin City can be scorching and winter, extremely cold. If you are visiting Las Vegas for hot-weather fun, the best time to go is from early June to mid-September.
Finding the Best Property in the Las Vegas Rental Market
Here, we list the top neighborhoods in the Las Vegas rental market. If you can not find the neighborhood you are interested in below, you may do an investment property analysis yourself using Mashvisor’sal estate investment tools. We’ve also provided the key metrics to help you decide the best location for your investment goal.
Top 5 Best Places to Invest in Traditional Rental in Las Vegas
Here are our choices for the best places for long-term rentals. The list is presented in descending order of cash on cash return.
1. Sunrise
- Median Property Price: $313,881
- Price per Square Foot: $223
- Average Traditional Monthly Income: $1,295
- Average Traditional Cash on Cash Return: 2.54%
2. Desert Shores
- Median Property Price: $511,149
- Price per Square Foot: $273
- Average Traditional Monthly Income: $1,662
- Average Traditional Cash on Cash Return: 2.19%
3. Michael Way
- Median Property Price: $393,318
- Price per Square Foot: $241
- Average Traditional Monthly Income: $1,236
- Average Traditional Cash on Cash Return: 1.94%
4. Twin Lakes
- Median Property Price: $445,726
- Price per Square Foot: $269
- Average Traditional Monthly Income: $1,244
- Average Traditional Cash on Cash Return: 1.90%
5. Spring Valley
- Median Property Price: $617,745
- Price per Square Foot: $297
- Average Traditional Monthly Income: $1,244
- Average Traditional Cash on Cash Return: 1.90%
Top 5 Best Places to Invest in Airbnb Las Vegas
If your interest lies in short-term rentals, make sure to get acquainted with the Airbnb laws in Las Vegas. For example, there is a law restricting short-term rentals to owner-occupied properties. A new rental law, AB 363, is expected to take effect in July 2022 and affect Airbnb Las Vegas.
1. Downtown East
- Median Property Price: $367, 269
- Price per Square Foot: $236
- Average Monthly Airbnb Rental Income: $3,081
- Average Airbnb Cash on Cash Return: 6.21%
- Average Airbnb Occupancy Rate: 53%
2. Rancho Charleston
- Median Property Price: $649,733
- Price per Square Foot: $263
- Average Monthly Airbnb Rental Income: $4,173
- Average Airbnb Cash on Cash Return: 4.37%
- Average Airbnb Occupancy Rate: 52%
3. Cultural Corridor
- Median Property Price: $539,451
- Price per Square Foot: $265
- Average Monthly Airbnb Rental Income: $1,936
- Average Airbnb Cash on Cash Return: 3.01%
- Average Airbnb Occupancy Rate: 59%
4. Paradise
- Median Property Price: $525,719
- Price per Square Foot: $291
- Average Monthly Airbnb Rental Income: $2,565
- Average Airbnb Cash on Cash Return: 2.92%
- Average Airbnb Occupancy Rate: 51%
5. The Strip
- Median Property Price: $742,506
- Price per Square Foot: $595
- Average Monthly Airbnb Rental Income: $2,708
- Average Airbnb Cash on Cash Return: 1.99%
- Average Airbnb Occupancy Rate: 51%
Related: Las Vegas Real Estate Investment: The 2022 Investor’s Guide
Choosing the Best Rental Property
We’ve identified for you excellent locations for your investment; it’s your turn now to start an investment property search. How do you perform one?
Suppose you intend to buy an investment property at Sunshine, Las Vegas. Here’s how to select your property.
Step 1: Choose a location.
But first, sign up with Mashvisor and get your 7-day free trial. Once you’ve done that, go to your Dashboard.
Type “Sunshine, Las Vegas, NV” in the search bar. Click on the neighborhood from the dropdown menu, and you will be redirected to the neighborhood map. You will also see the listed properties for sale in your location.
Step 2: Set the filters.
Narrow down your search by setting filters. You may skip the filters if you simply want to see what properties are available. You may set your desired cash on cash return, cap rate, and budget.
Click on “More Filters” and define the following parameters:
- Property Type: Choose from among Single Family Home, Townhouse, Multi Family, Condo/Coop, Other
- Property Status: Select from among For Sale, Sold, Foreclosure
You may choose to limit your filters here or set the other filters to streamline your search further.
- Minimum Bedrooms: Drag the circle to the number of bedrooms you prefer
- Minimum Bathrooms: Drag the circle to the number of bathrooms you like.
- Year Built
- Square Feet
- Traditional Rental Income: You may set a range by dragging the button to the minimum income you’d like to have and the right button to the maximum income you expect.
- Airbnb Rental Income: Follow the same procedure as the Traditional Rental Income
If you are a first-time investor, looking for a single family home might be more convenient and cost-effective than a duplex for sale. However, suppose you are interested in buying a foreclosed or multi family home to put up in the Las Vegas rental market. In that case, you’ll need to sign up for an Expert Plan to access listings in these categories.
Review your filters and when you’re okay with those, click on the “Apply” button.
A property listing of houses that match your criteria will be displayed. Now, you have to find out which of these will give you a good return on investment.
Step 3: Choose your purchase option.
How do you intend to purchase the property? Set your filter to cash, or set the filter found in the top panel. If you will mortgage your property, add the following information:
- Down Payment
- Loan Type (30-year fixed rate or 15-year fixed rate)
- Interest Rate
The mortgage expenses will automatically reflect on the cash on cash return of all properties for sale covered by your property search.
Step 4: Find the property with the highest return.
On the upper right-hand panel of your screen, click on “Sort By,” then “descending Traditional Cash on Cash Return” to display the best property in the Las Vegas rental market at the top of the page.
Related: How to Do Investment Property Analysis
Rental Strategy: Traditional Rental vs. Airbnb
Suppose you are unsure which is the optimal rental strategy. In that case, you can go a step further by using Mashvisor’s rental property calculator to compare the cash flow, cap rate, and cash on cash return of the two rental strategies.
Using Mashvisor’s rental property calculator, investors can compare the cash flow, cash on cash return, and cap rate of traditional and Airbnb rental properties.
The Bottomline
Las Vegas is recovering from the economic slump brought about by the pandemic, auguring well for the Las Vegas housing market. Specifically, the Las Vegas rental market is predicted to be exciting in 2022, and the numbers show it.
Should you invest in the Las Vegas rental market in 2022? Yes, but you must carefully select your investment property. Mashvisor’s real estate investment tools are designed to facilitate your property search and ensure your success as a property investor.
Also, keep yourself updated on the implementation of the new rental law, AB 363. Find out how it will affect the Airbnb rental business in Las Vegas.
Schedule a free demo with us to see how our tools can help you.