Las Vegas, Nevada -- 2017 has been an exciting year for Las Vegas real estate. The Oakland Raiders are moving to Las Vegas and have been approved to build a new stadium for the 2020 season. Investors are wondering how the stadium will affect Las Vegas home values and short term vacation rentals.
In order to consider what impact the stadium will have on the local housing market, it’s important to examine what’s happening with room rates on the Las Vegas Strip. Not long ago, Las Vegas was known for free booze, inexpensive prime rib dinners and cheap hotel rooms. This was done to attract visitors and give them a reason to spend money in the casinos. Those days are long gone. Room rates have reached all-time highs. In February 2017, the Las Vegas Review Journal reported that the average daily room rate (the average amount resort guests pay for a night in a hotel on the Las Vegas Strip) rose 3.7 percent to $150.21. This is the highest monthly average ever compiled by Las Vegas Convention and Visitors Authority researchers. This rate topped the previous high of $146.53 recorded in April 2007.
When it comes to hotel occupancy rates in Las Vegas; weekends, conventions and special events have always given casinos a reason to charge more money for rooms. For example, New Year's Eve has always been the most expensive day of the year. Hotel rooms sell out early and room rates can triple or even quadruple for the holiday. Can you imagine what will happen to room prices once Las Vegas hosts a major football game, playoffs or even a Super Bowl? The stadium will be attracting football fans from all over the world. Room prices will soar due to supply and demand. What does this mean for Las Vegas investors?
Real estate investors have been using the Internet to lease or rent short-term lodging such as vacation rentals. Websites such as Airbnb make it easy to find short term tenants. As room rates in Las Vegas continue to rise, this provides a unique opportunity for real estate investors. Why would someone pay $400 a night for a hotel room if you can rent a condo, townhome or single family residence (with multiple bedrooms, pool and a kitchen) for the same price? Anyone who has recently stayed at a Las Vegas resort knows it isn’t cheap. In addition to the daily room rate, there are resort fees, mini-bar expenses and most guests eat breakfast lunch and dinner in the restaurants. Las Vegas hotel executives have mastered the art of making your stay as expensive as possible. For example, scrambled eggs ordered from room service served with toast and a glass of orange juice can easily cost more than $25.00 per person. A pizza can cost $30.00 or more (plus a $5.00 delivery charge). Vacation rental homes offer visitors a more affordable way to visit Las Vegas. Rental properties with kitchens provide guests the ability to save money by preparing some or all of their meals. Rentals with pools are even more attractive. Las Vegas investors are realizing that by purchasing properties close or near to the new stadium, they can compete with the casinos by offering a more economical way to experience Las Vegas.
As the number of guests visiting Las Vegas increases, this makes vacation homes a very attractive option for investors. The ROI (return on investment) for investors could turn a vacation rental property into a money machine. If an investor purchases a single family home near the Las Vegas Strip, they could easily charge $1000 or more for a weekend stay. When you consider an average monthly mortgage payment of $1100 - $1400, this could be a profitable investment for a landlord bringing in $4000/month or more. This unique opportunity will likely increase demand for Las Vegas housing and change the dynamics of the real estate market.
Myers Team owners Bill and Francoise Myers with Simply Vegas Real Estate are Las Vegas Top Real Estate Agents. Additionally, they are experts working with Las Vegas real estate investors. Please contact them with your relocation needs.
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The Myers Team are licensed Real Estate Agents. They are not CPA’s, Accountants or Attorneys. The content above is for information purposes only and should not be construed as tax or legal advice. The information provided is obtained from public records, it is deemed reliable but not guaranteed.