The only thing better for an economic recovery than an infusion of government subsidy is a ton of new jobs, or in this case six-tons. According to a recent article, MGM Mirage & and Infinity World Development Corp, a subsidiary of Dubai World, will be opening CityCenter this December on the Las Vegas Strip. They expect to fill 12,000 permanent positions.
Normally, each "new job" has a multiplying factor - anywhere from 1.5 to 5 - to account for all the ancillary support jobs that are needed to support the new workers. Let's be conservative and use 1.5 as the factor. So, we're are looking as something like 18,000 jobs. On the one hand, that's great! On the other hand, that's only about 2% of the local working population when the area currently is suffering 13.4% unemployment. And, it is unclear how many jobs are to be canibalized.
Is this enough to stop the downward spiral, initiate a virtuous cycle, and turnaround the housing situation in Las Vegas? The answer to that question lies in the future. However, the reason to bring this up now is that you don't know whether or not you've reached bottom until after the fact.
Currently there are many Las Vegas investment properties with strong positive cashflow - properties selling from 50-90 thousand while asking rents are $1100-1300 / mo. and above. This is a great cashflow play (even considering vacancies), and we can let appreciation and inflation take care of itself. Currently FinestExpert.com shows hundreds of Las Vegas homes for sale with a FE-Score of 850+ and a Cash-on-Cash Return (CCR) of over 15%. And of course, if properties are good for a landlord to own, then in the rent vs buy equation, they are good for the 1st time homebuyer as well.
Comments (4)Subscribe to CommentsComment