Located in Southeastern Nevada, Las Vegas is home to over 640,000 residents making it the 28th most populous city in the United States. The Las Vegas metropolitan area (which includes the Strip and the Valley) has a population of over 2 million.
Population growth in the city is constant and is expected to surpass the national growth rate. Current and future Las Vegas real estate investors will benefit from this growth as about 49% of the population continues to rent rather than buy homes, according to NeighborhoodScout, meaning the tenant pool for rental properties is large.
Las Vegas enjoys a healthy and diverse economy. The leading industry in the city is tourism which includes the accommodation, entertainment, and services industries. Sin City welcomes over 37 million tourists every year. A popular tourist attraction is the gambling and nightlife scene as there are over 100 casinos in the Las Vegas Valley. Another industry driving local economic growth is housing construction due to the fact that Las Vegas sees consistent population growth. Other major industries include retail, healthcare, technology, and education.
The Las Vegas real estate market has displayed overall positive trends over the years. It’s one of the top housing markets in the Western Mountain Region of the US, according to the annual PWC real estate report. The Las Vegas housing market is propped up by the economy which has high entrepreneurial and new business activity as well as the positive population growth.
|Facts and Market Trends in Las Vegas|
|Homes For Sale6,386|
|Traditional Vacancy rate4.70%|
|Airbnb Occupancy Rate54.36%|
|Median Rent Price$2,203|
|Median Days on Market58|
|Price to Rent Ratio23.4|
|Average Cap Rate|
|Average Rental Income|
|Median Household Income$58,377|
|RENTAL STRATEGY||STUDIOS||1 BEDROOM||2 BEDROOMS||3 BEDROOMS||4 BEDROOMS|
Real estate appreciation in the Las Vegas housing market is tangible as prices have risen by 81% since Q1 of 2000, which is an average annual growth rate of 3.22%, according to NeighborhoodScout. This property appreciation lands Las Vegas in the top 30% in the nation for growth. Zillow reports that Las Vegas property values appreciated by 10.9% in 2018, which is far above the annual average the US housing market has been experiencing over the past decade or so. This makes the Las Vegas real estate market one of the best places to buy investment property.
Las Vegas is a seller’s market, but as the inventory of homes for sale has been rising since the end of 2018, it’s not a hot seller’s market. Because the supply is increasing and meeting demand, property prices are still relatively affordable in the Las Vegas real estate market compared to other seller’s markets in the nation.
As Las Vegas is a very popular tourist destination, the growth of the Airbnb and vacation rental industry has been rapid in the city, with 2018 seeing an increase of Airbnb stays by 50% (over 700,000 guests). This brought Airbnb Las Vegas hosts a revenue of $100 million.
As Airbnb continues to grow, the city has been looking towards regulating short-term rentals to minimize any possible negative effects that Airbnb rental properties can bring to local communities and prices in the housing and rental market. In December of 2018, the City Council voted on new regulations that would only allow the renting out of primary residences on Airbnb and other short-term rental websites. This means the operation of a non-owner occupied Airbnb investment property is illegal in the Las Vegas real estate market.
For owner-occupied Airbnb rentals to operate legally, they must follow the local Zoning Codes applicable to the specific area where the property is located. A yearly business licence will have to be obtained with a fee of $500 as well as a short-term residential rental permit. Airbnb hosts are also required to have liability insurance. If applicable to the short-term rental, homeowners will need written permission from their Homeowner’s Association. The City of Las Vegas also has a transient lodging tax that applies to vacation home rentals. Any violations of Airbnb regulations in Las Vegas can result in jail time and a fine of $1,000.