The Las Vegas rental market is one of the most volatile anywhere in the world these days. The city remains in the grips of a horrible recession with home foreclosures continuing to be the rule rather than the exception. For those in the Las Vegas apartment business, times are also tough.
More Renters But More Properties
On the surface, it would look like boom times for Las Vegas property owners and managers, but bubbling just beneath that surface is a market made more competitive by the huge number of foreclosures. Homes that were previously owned and lived in are now being rented either by the homeowner hoping to avoid foreclosure or even by banks, who have no idea what to do with them other than use them as rentals.
This shadow market, as it is being referred to, is compounded by the number of new developments that were in the works prior to the recession, and are gradually being finished and opened up for rentals. Included in this part of the market are condos that were originally built to sell but are now renting due to the economic situation. None of these properties are as profitable as they were planned, and it is cutting into the rental profitability now too.
How Landlords Are Surviving
<
Las Vegas rental managers are making many concessions in order to survive. They can no longer charge for many amenities because tenants are simply searching for the best price they can find. The profit line between high end and low cost units doesn’t seem to matter - both are suffering. Tenants can find cheaper single family houses than apartments and are opting for price.
Many property managers are lowering their requirements for tenants because they have to. It is now easier for those with bad credit to rent homes because banks and homeowners will take anyone who even says they’ll pay rent, and that’s cutting into Las Vegas complex rentals, where the usual procedures for screening are still in place. This means that a property manager either has to relax his screening process or cut rents to a competitive rate.
It also means that clever property managers are teaming up with local business, health clubs, and shops to make their properties more attractive to tenants. Suddenly, the job description of a landlord or manager is completely different. It is more about creative marketing while juggling the bottom line of profitability.
Short Term Solutions
If predictions are correct, it will take another two to three years for the Las Vegas rental market to stabilize and stabilization may mean lower rents for some years to come. The property manager who can come up with ideas and plans to keep their units rented can manage to stay afloat. The profits won’t be as large as they once were, but the property can stay a viable income producer too. Tough times.
