TOP 5 REASONS FOR LAS VEGAS REAL ESTATE INVESTMENTS
Of the investor-friendly possibilities, real estate has some particularly welcoming attributes that have kept it perpetually close to investors’ hearts (and portfolios). This is particularly the case whenever tenuous national and world affairs make the future unnervingly hard to predict. Forbes magazine is one of the foremost sources that knowledge-thirsty investors consult for ideas and commentary about productive destinations for their extra investment capital, and some of those ideas recently surfaced in a piece on why real estate is “investor-friendly.” They pointed to five major characteristics that continue to attract investors: 1. Volatility. Las Vegas landlords have a degree of protection from the kind of volatility that the stock and bond markets frequently experience because rental rates are by their nature more stable over time. Globally, even international investors find U.S. real estate markets to offer relatively safe haven in troubled times. Forbes also notes that real estate investments offer insulation from price movements “since returns are derived from rental income in addition to price appreciation.” 2. Inflation. Any Las Vegas investor who has been around for a while knows how inflation can be a real investment-killer. Research points to the price-raising flexibility that real estate investments embody—but you don’t need to be an academic to know that everyone expects rents to rise when the cost of living does. When inflation rears its otherwise unwelcome head, commercial real estate investments have “the potential to become more profitable.” 3. Returns. Last year, global economic growth slowed for most kinds of investment assets, but real estate was an exception. Rising rents alone would have done the trick (but underlying appreciation also didn’t hurt). 4. Diversification. As an injection of a different asset class, real estate is a portfolio-strengthener. Spreading risk is one of the bedrock principals every Las Vegas investor learns from the start—a real estate investment does the trick. 5. Tax benefits. The income from a rental investment in Las Vegas can be partially offset by depreciation and loan interest “that can add up to a substantial tax break.” This spring, the current listings offer any variety of such investor-friendly possibilities. When you decide that your own investment portfolio might benefit from the stability and other advantages that distinguish Las Vegasreal estate investments, I hope you won’t hesitate to give me a call to investigate
LAS VEGAS HOUSE HUNTERS GET WELCOME MORTGAGE RATE NEWS
The headlines last week had a familiar look to them, but in terms of what they actually signified for readers who might be potential home buyers or sellers in Las Vegas, they really should have triggered a snap-to moment: “Mortgage Rates Fall to New 2016 Lows,” was the Star Tribune’s headline. Yahoo Finance echoed that, adding, “Is Now the Time to Buy?” “Ho-hum,” readers might have reacted; “same ‘ol, same ‘ol…” The so what? treatment was also what most media outlets gave the news. After all, haven’t mortgage rates been low for a long time now? So what if rates hit the lowest mark since May 2013? TV newscasters (cable and otherwise) were mostly mum, except on the financial channels. News is about what’s new—and this just didn’t seem to qualify. Wrong! In terms of real people’s lives, the actual impact of what those headlines mean is all but seismic. If you are selling your Las Vegas home, the number of potential buyers depends on how many people can afford to shop in your asking price’s range. Likewise, for serious house hunters, the real contenders are those that fit your budget. That’s where the current Las Vegas mortgage rate picture is more than slightly interesting. It can be decisive. The impact that even small rate adjustments make are substantial—and that makes the current environment truly momentous. The average mortgage rate over the past 3 decades has been 7.49% (that’s what you get if you average out the official numbers since April of 1986). That means that a $300,000, 30-year fixed rate home loan would create a $2,095 monthly payment. That’s why last week’s news should have been earth-shaking—at least to anyone on the fence about making a move in the current market. The official word from quasi-government entity Freddie Mac was that nationally, mortgage rates actually dropped again, inching down to a national average of 3.58%. The math is remarkable. That same $300,000 home loan payment would today cost only $1,360—a savings of $735 every month. About a third. Put another way, on the same budget, the same Las Vegas house hunter could afford “a third more house.” In terms of any kind of shopping discount, that’s a wild one! So I’d argue that there was actually a great deal of news value in last week’s drop in mortgage rates, whether the actual percentage shift was a small one. The news is that these incredibly low rates aren’t being treated as news—despite their importance to real people buying and selling real homes. There is a danger in how people have the capacity to accept current conditions as normal—even if they’re extraordinary. That capacity has a downside: it means we can be lulled into acting as if today’s reality will continue on forever. History has a way of creating dramatic wakeup calls on that score…all of which is another way of suggesting why today is a terrific time to give me a call!
HOMEOWNERS TAX DEDUCTION LESSENS TAX DAY TRAUMA
Sometimes life throws curves your way. It can put you into situations you never intended—which may be hard to explain. That’s how it is with me and the tax collector. As we recently experienced, there’s nothing like Tax Day to bring home the reality of just how many dollars are diverted into government coffers. Instead of quietly resting in our Las Vegas bank accounts where they belong, great bunches of our dollars are dispatched to the tax collector, thinning the ranks of their fellows in the bank. They’ll be left to face the future alone. I’d be tempted to paint a picture of our remaining cash left shivering in the dark—but that might be overly dramatic. Let’s just say there would be a lot more of it were it not for April 15. As usual, this past April 15 again forced us to put it all on paper—to gather all the telltale evidence that yields the whopping bottom line number: amount owed. Even if over-withholding meant that a refund check would be coming back our way, the tally of how much cash had flowed in the opposite direction was often jarring. A lone positive goes to the Las Vegas’s mortgage-paying homeowners. The degree of brow-wrinkling is always less for them than for our Las Vegas’s renters with the similar financial profiles. Tax Day is an annual reminder that the mortgage interest tax deduction lowers the tax burden right now…and substantially. The tax deduction provision is actually only one of the two most financially rewarding aspects to Las Vegashomeownership. A home’s equity—the barely visible sum that builds each month as the mortgage shrinks—increases quietly in the background. It feels a little bit abstract, even though the value represented is ultimately every bit as tangible. But especially on Tax Day, the interest tax deduction is right there in black and white—with three or more zeros behind it! Most homeowners can be forgiven for shuddering if a thought like, “what if we couldn’t subtract that?” momentarily crosses their minds. It’s also why the tax collector (albeit unwittingly) is a palpable contributor to the real estate industry. My real estate industry. It’s only realistic to acknowledge that the irritating persistence of the Internal Revenue Service is a strong motivating force for home buyers. By default, anything that makes homeownership popular helps me help sellers reach their goal. Come to think of it, that could well be another reason that explains why the “spring selling season” is always the busiest time of year. Tax Day is right there near the kickoff point, timed perfectly to stir buyers to action. So, it’s nothing I’d ever want to publicize, but I guess that, because of the huge financial advantage that the mortgage interest tax deduction carries, the tax collector would have to be considered an ally when you and I band together to sell your Las Vegas home (but maybe it would be best not to mention that to anyone)!
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