Are you considering investing in real estate in Clark County, Nevada? Before you make a decision, it's important to analyze the potential risks associated with this type of investment. As an expert in the field of SEO, I'm here to provide an overview of the local real estate market and discuss the key factors to consider when evaluating the potential risks of investing in Clark County. Located in southern Nevada, the Las Vegas metro area has seen remarkable rent growth and vacancy rates below 5% over the past five years. The population is growing and both new housing and multifamily development permits are limited compared to the total inventory, which is a positive sign for future investment property owners in Las Vegas.
The economy of Clark County is heavily dependent on the Las Vegas Strip, and the impacts of the pandemic closures were felt first-hand, with unemployment rising and the workforce shrinking. To get a better understanding of the local real estate market, it's important to analyze population growth, labor statistics, median income, poverty levels, education levels, rental data, homeownership statistics, and housing permits. Population growth is a key factor for all types of real estate investors. To get an accurate picture of population growth trends, it's important to look at data from the past year, three years, five years, and seven years.
You can use current population figures as a base and compare them to previous reports. It's also important to analyze the age cohort of the Clark County population. Ideally, you want to see a large cohort of people aged 25 to 34 and solid growth coming from this group. This age group has the greatest potential workforce and is reaching its prime.
An influx of young and working-age people is a positive sign for future employment opportunities in Clark County. To get an accurate picture of unemployment, labor force, and employment data in Clark County, you can use Tactica's BLS dashboard which contains data from the Bureau of Labor Statistics. Taking snapshots of 3-year labor statistics can give you an idea of what happens to local employment fundamentals when tourism ceases. It's important to note that having too many employees concentrated in one company can be risky; if something happens to a major employer and jobs are lost, many tenants could leave the market in search of other opportunities. To get an accurate picture of median income, poverty levels, and education levels in Clark County, you can use data from the Census Bureau.
You can also use Apartment List to get rental data; they publish monthly reports on rental and vacancy trends. To get information on home values in Clark County, you can use Zillow Research Center; you must specify what type of housing you want included (single-family homes, townhomes, condominiums or co-ops).You can also contact a local business brokerage team or property manager for rental statistics in a city or neighborhood. Reasonable rents combined with explosive rent growth and low vacancies are the most desirable combination for investment opportunities; however, strong rent growth trends may not be sustainable if renters struggle to pay their monthly obligations. It's also important to analyze homeownership statistics in Clark County; if homes are cheaper than apartments in Las Vegas, this could turn potential renters into homebuyers. To calculate monthly homeowner costs without a mortgage (including insurance and property taxes), you can use data from the Census Bureau.
It's important to compare this amount with average rental rates in the submarket; if owning is almost two times more expensive than renting in Las Vegas (although it's important to note that renting a newer unit in the best neighborhoods may be more expensive than average), then renting may be more sensible. To get an accurate picture of single-family housing permits (updated every May for the last year) for the Las Vegas MSA, you can use data from the Census Bureau. It's important to divide SFH permits by total housing stock; a high percentage may portend a future housing oversupply that negatively affects rental metrics. If you're a developer looking to enter a new market, it's important to calculate apartment units (or number of permits for structures with more than 5 units) divided by total housing stock; the higher this ratio is, the greater competition you will face when leasing units. Finally, it's important to analyze total rental units in the MSA; you can use data from National Multifamily Housing Council (NMHC). When you divide total rental units by population and total housing stock, you get valuable information about population compared to other markets across the country. Analyzing all these factors is essential for understanding local real estate landscape before investing in real estate in Clark County.
Knowing what risks are associated with investing in real estate will help you make an informed decision about whether or not it's worth investing in this market.
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