A Guide to House Hacking an Airbnb Las Vegas Investment Property

If there’s one thing everyone knows about Las Vegas, Nevada, it’s that the city is a popular tourist destination. In 2019 alone, Sin City welcomed 49.5 million visitors. Obviously, the local economy benefits greatly, with the tourism industry generating billions of dollars annually. But how can you benefit from this? By house hacking an Airbnb Las Vegas investment property.

But Isn’t Airbnb Illegal in Las Vegas?

Although 2019 was a great year for players in the tourism industry, the year also brought with it new Las Vegas Airbnb laws. Local officials were concerned about the possible effects of Airbnb rental properties on Las Vegas neighborhoods, specifically those that were operated by out-of-state real estate investors who didn’t live on site. Many believed that Las Vegas property values were falling in certain residential neighborhoods because of some issues that short-term rental properties introduced into the areas – non-stop partying, drugs, and even prostitution. As a result, a new Airbnb Las Vegas ordinance was passed. It made the practice of buying Airbnb property and renting it out entirely to guests without living on-site illegal.

However, renting out an Airbnb Las Vegas house is legal, as long as the property is the host’s primary residence. That’s why, if you’re looking to make money with Airbnb in the Las Vegas real estate market, it’s best to turn to house hacking.

There are fees, permits, taxes, and zoning laws you need to know about before house hacking an Airbnb Las Vegas rental property. To learn more about Airbnb regulations in Las Vegas, check out our Las Vegas Real Estate Market Report 2020.

What Is House Hacking?

House hacking consists of buying an investment property and renting out part of it while living in the property. You can try multi-family house hacking, which means you’ll live in one unit and rent out the others to Airbnb guests. Or you can try house hacking a single-family home. This would mean living in the property and renting out on a room-by-room basis. Because guests allow you to earn an Airbnb rental income, you can use the money to pay off your mortgage, essentially living for free.

Learn more about house hacking by watching the video below!

In this guide, we’ll walk you through the process of house hacking Las Vegas real estate and renting it out on Airbnb. But first, let’s discuss whether or not it’s worth it.

How Much Money Can You Make in Las Vegas with Airbnb?

We’ve established that Las Vegas receives many visitors every year. But how much do Airbnb Las Vegas hosts actually earn from this tourism?

Looking at Clark County as a whole, of which Las Vegas is the county seat, Airbnb hosts earned more than $138 million in 2019. They welcomed 882,000 Airbnb guests. Remember, this is despite the new Las Vegas Airbnb rules and the fact that the county was diligently investigating illegal short-term rental properties and fining hosts.

Mashvisor’s Airbnb data on the Las Vegas housing market offers more insight into how much hosts can earn by renting out an Airbnb:

Median Property Price: $431,045
Price per Square Foot: $219
Average Airbnb Daily Rate: $186
Airbnb Rental Income: $2,511
Airbnb Cash on Cash Return: 3.4%
Airbnb Occupancy Rate: 53%

From Mashvisor’s Airbnb rental data, you can see that Las Vegas hosts earn a high daily rate and monthly rental income on average. This contributes to the good cash on cash return Airbnb Las Vegas rental properties generate along with the high Airbnb occupancy rate.

Mashvisor’s Airbnb data is collected from Airbnb. The above data represents homes that are completely rented out.

Who Does This Strategy Make Sense For?

Before we get to the steps of house hacking in the Las Vegas real estate market, it’s important to discuss one more thing. Who does this real estate investment strategy make sense for?

Well, beginner real estate investors are the ones who benefit the most from house hacking. But if you plan to house hack in Las Vegas specifically, you should probably already be a resident of the city. An out-of-state real estate investor would have to uproot his/her entire life and move to Las Vegas. While some new investors may be in a position to do this, many probably won’t be able to.

If you own a home in the Las Vegas housing market already, then simply learn how to become an Airbnb host. However, if you don’t have a primary residence, then buying property in Las Vegas to house hack is a great first step to investing in real estate and owning a home all at once.

4 Steps to House Hacking Airbnb Las Vegas Real Estate

There are four main steps to house hacking. It all starts with investment property financing.

Step #1: Study Your Financing Options and Get Pre-Approved

Why is house hacking such a great option for beginner real estate investors? Because it allows them to buy an investment property with a low down payment.

The median property price in the Las Vegas housing market may be too high for you. Even with a conventional loan, Las Vegas homes for sale would cost you a hefty down payment (20-25%). Luckily, house hacking opens up more financing options for you, namely FHA loans.

While there are a few other options, like FHA 203k loans or Fannie Mae Homestyle Renovation loans, FHA loans are most commonly used by house hackers. These investment property loans come with the following requirements:

A 3.5% down payment
580 credit score or higher (if your credit score is lower than 580, you may still qualify, but with a 10% down payment)
Mortgage insurance premium
Certain appraisal standards

To learn more, click here.

Be sure to explore FHA loans as well as your other options. Apply for pre-approval at this stage, before you start your property hunt. That way, you will know what you can afford.

Step #2: Choose the Best Neighborhood to House Hack an Airbnb

Once you’ve been pre-approved for an investment loan, find a good neighborhood for owning an Airbnb. According to Mashvisor’s data, these are the best Las Vegas neighborhoods with the highest cash on cash return:

10 Best Neighborhoods in Las Vegas for Airbnb Rental Properties

#1. Sunrise Manor

Median Property Price: $250,150
Price per Square Foot: $159
Average Airbnb Daily Rate: $230
Airbnb Rental Income: $3,132
Airbnb Cash on Cash Return: 6.4%
Airbnb Occupancy Rate: 59%

#2. Downtown East

Median Property Price: $247,474
Price per Square Foot: $162
Average Airbnb Daily Rate: $111
Airbnb Rental Income: $2,758
Airbnb Cash on Cash Return: 6.4%
Airbnb Occupancy Rate: 66%

#3. Cultural Corridor

Median Property Price: $276,975
Price per Square Foot: $177
Average Airbnb Daily Rate: $101
Airbnb Rental Income: $2,394
Airbnb Cash on Cash Return: 6.2%
Airbnb Occupancy Rate: 58%

#4. East Las Vegas

Median Property Price: $212,575
Price per Square Foot: $155
Average Airbnb Daily Rate: $81
Airbnb Rental Income: $2,375
Airbnb Cash on Cash Return: 6.0%
Airbnb Occupancy Rate: 60%

#5. Buffalo

Median Property Price: $388,585
Price per Square Foot: $180
Average Airbnb Daily Rate: $448
Airbnb Rental Income: $3,757
Airbnb Cash on Cash Return: 5.5%
Airbnb Occupancy Rate: 50%

#6. Huntridge

Median Property Price: $294,188
Price per Square Foot: $175
Average Airbnb Daily Rate: $173
Airbnb Rental Income: $2,753
Airbnb Cash on Cash Return: 5.4%
Airbnb Occupancy Rate: 55%

#7. Winchester

Median Property Price: $266,952
Price per Square Foot: $156
Average Airbnb Daily Rate: $226
Airbnb Rental Income: $2,372
Airbnb Cash on Cash Return: 4.5%
Airbnb Occupancy Rate: 48%

#8. The Lakes

Median Property Price: $510,383
Price per Square Foot: $220
Average Airbnb Daily Rate: $145
Airbnb Rental Income: $3,266
Airbnb Cash on Cash Return: 4.2%
Airbnb Occupancy Rate: 65%

#9. Rancho Charleston

Median Property Price: $336,723
Price per Square Foot: $174
Average Airbnb Daily Rate: $248
Airbnb Rental Income: $2,547
Airbnb Cash on Cash Return: 4.1%
Airbnb Occupancy Rate: 48%

#10. The Strip

Median Property Price: $475,121
Price per Square Foot: $388
Average Airbnb Daily Rate: $157
Airbnb Rental Income: $2,768
Airbnb Cash on Cash Return: 4.0%
Airbnb Occupancy Rate: 57%

Step #3: Find a Good Real Estate Deal

Now that you know which Las Vegas neighborhood you want to start your house hacking journey in, it’s time to search for deals. To be successful with this real estate investment strategy, it’s best to find either a below market value property or at least one that fits your budget.

Start by looking for foreclosed homes for sale in the neighborhood. These investment properties are usually priced below market value. You can use Mashvisor’s real estate investment search app to find out if there are foreclosed homes for sale in the neighborhood of your choice in minutes. To learn how to do this, read: How to Find Foreclosed Homes for Sale to Invest In and Make Money.

If you’d rather not invest in foreclosed homes, you can also view all of the properties for sale in your neighborhood of choice that fit your budget using our app. Say you want to invest in Airbnb in The Strip. Start by typing Las Vegas, NV into Mashvisor’s real estate search engine.

Next, select the neighborhood filter and click on The Strip. This filter will allow you to exclusively see investment properties for sale in this neighborhood. Finally, set your budget. Now, you’ll only see Las Vegas investment properties for sale that fit your budget. (Both filters pictured below)

Mashvisor’s Real Estate Investment Search App

There are plenty of other filters to play around with here to find the best real estate deals in Las Vegas. For example, if you plan on house hacking a duplex, set the multi-family filter.

Every property you see on the app will have a quick Airbnb investment analysis which consists of Airbnb cash on cash return. (Pictured above in the right-hand panel) So you can start narrowing down your choices during this step.

Find a Profitable Airbnb Investment Property

Step #4: Conduct an Airbnb Investment Analysis

Once you find a few Airbnbs for sale that appear to be promising, it’s time to analyze them. You need to estimate Airbnb income, costs and fees, occupancy rate, and return on investment. Rather than spending time gathering information and property data and plugging it into spreadsheets, use Mashvisor’s Airbnb profit calculator as your house hacking calculator (with some input from yourself).

This tool uses Airbnb analytics to provide you with the following data on how an Airbnb in Las Vegas will perform:

Airbnb rental income
Monthly Airbnb costs
One-time fees for buying Airbnb property
Airbnb cash flow
Airbnb cash on cash return
Airbnb cap rate
Airbnb occupancy rate
Airbnb comps

With this data, you can complete a full Airbnb investment analysis on multiple properties for sale in one sit down. It will help you find the perfect home for Airbnb property hacking in minutes.

Start House Hacking an Airbnb Las Vegas Property Today

House hacking an Airbnb Las Vegas, NV investment could be a great real estate investment strategy. Just follow along with this guide, research the laws and regulations that will apply to your Airbnb rental property, and be sure to use Mashvisor’s real estate investment software for analysis. Get started today with a 7-day free trial.

Start Your Investment Property Search!