Condo in Vegas

[pitzerwm]

Like a lot of you, I'm getting killed in the stock market right now and it might last as long as the Dems are in power.

Therefore, since real estate prices are down in Vegas 25-35%, and I go there 3-4 times of the year, could even winter there, I'm thinking of buying a condo/townhouse down there. Anyone thinking or have thought along these lines?

In 5 years or so, the prices should come back, Vegas will always be Vegas.

 

[Whale of a Wash]

My second job is owning apts and some houses, besides car washes, I have been thinking the same thing, if i get multi units i have reason to travel . Also vegas is sure alot cheaper than a couple of years ago. Sounds like a great way to spend your money, with a tangible investment. probably a large group of us would like to rent it.
john

 

[ted mcmeekin]

Three years ago I bought a 10 yr ML variable annuity. It returned about 10 % each of the first 3 years. It has a guranteed bottom of 5 % net of fees for any year so I am not worried about this year. Should have put more in it. It is very flexible of how to cash out with reup options or choosing from several annuity payout terms. I doubt this is still available but will check as I would do again if I could get same terms.

Ted

 

[Patrick H. Crowe]

Bill:

Market headed down - - go short. Up - - go long. Only stagnant markets make it tough to make money. A genius level broker helps. Been doing well this year but have had some years where I lost more in the market than I made washing cars, then I abandoned the buy and hold BS. I've been in and out of AAPL six times this year - - buy the stock, sell calls, repeat the deal as it moves from below 120 to over 175. Other examples abound.

I know zero about Vegas real estate but that market in KC is tricky, especially for condos. Buy the condo for the fun of it and when not at the casinos call my broker - - then report to us in a year or two which worked better - - - sounds like fun to me and opportunity knocking.

Those who fear the dems will kill the market just can't see opportunity and just want to bit--. Sad to see but typical of those who only talk the talk.

Patrick H. Crowe

 

[Greg Pack]

I would read the writings of Robert Shiller. He has been very accurate so far on the housing bubble. He also forecast the tech bubble in 2000. I think he continues to see a decline in prices in Las Vegas for a while. I'll see if I can find the chart.

Vacation condos will be harder to finance in the future. Price of oil/airfare is a wildcard. If interest rates rise the price of condos will drop too.

My condo just eats into my net worth. Insurance, maintenance fees, etc. The people making the money are the management companies- they get 25% of rents for booking. I even have to pay the credit cards fees when people book.

Having said all that. If you find a condo you just absolutely love available at 2001 prices, you're probably pretty safe in it maintaining value, but I don't think you'll see significant appreciation for ten years or so. I'd rather be in equities.

Just "my two cents"

 

[pitzerwm]

Thanks for all the info. I agree with each of you. There are lots of ways of making money. This isn't exactly petty cash, but its a small part of the portfolio, just one more investment. Ted, your annuity sounds like a good deal. My understanding is that they are rarely the right investment.

I will be doing my due diligence but since I like Vegas ans can live there if I want, its not a total gamble. I haven't decided whether to finance or not, I do think that the interest rates are not going any lower. It won't be one of the ones in the Trump Tower, I think that they are all sold.

A friend was telling me that in Tampa a week or so ago, the builder auctioned off the remaining 19 units, that pre-built people had paid $539K for with the highest one going for $125K.

 

[Greg Pack]

I have been tempted to pay mine off. It does not cash flow with a mortgage. But I have a 4.75% mortgage. I can keep the money to pay it off in preferreds earning 6% and it's still liquid. But owning something feels better when it cash flows.

Hey Bill, I found this:

http://money.cnn.com/2008/06/09/real_estate/worst_hit_markets_will_get_worse/index.htm

"Specifically, Case/Shiller investors are betting that Las Vegas prices will fall an additional 22% by November 2009."


BTW, I believe case-shiller tracks residential housing, not condos.

 

[pitzerwm]

Thanks Greg, interesting article and as usual, you will only know for sure when its over. In the 80's who would have thought what happened would have happened. Hopefully, by the time I'm done, I will know everything there is to know about real estate in Vegas. And not screw up too bad. I've lost money on the last 3 real estate deals that I've been involved with, it should be time that I get it together.

Worse case is that I can move there, the market here is still fine, so I could sell this house here to stop the blood flow.

 

[Jimmy Buffett]

Ted,
Many va's offer a guaranteed withdrawal rate of 5% but the guarantee is usually a little more complicated than you may believe it to be. You can't take the guarantee and walk with it after a bad year.
Bill,
Many folks give va's a bad rap. I wonder if they give homeowners insurance the same treatment. Homeowners is a really bad deal if you don't need it. If you do need it it looks like a pretty good investment. Same with the guarantees on a va.

 

[pitzerwm]

Not too many advisers recommend a VA unless they are the one selling it.

 

[Jimmy Buffett]

I don't know what your source is for that statement but I think if you look at annual purchases of va's you'll see that a lot of advisors reccomend them. Many investors appreciate being able to go to bed a night knowing that they have guaranteed income for as long as they live. Some choose to accept the risk of the market and some choose to let the insurance company share the risk. I think the homeowners analogy is a reasonable one.

 

[pitzerwm]

You are right it is perfect for some people. You need to realize what your upfront cost are. But piece of mind is different for different people. You can always use booze to get to sleep