Century 21 MoneyWorld assists first-time property investors

The purchase of single-family homes as investments has gained popularity in Southern Nevada, according to agents at Century 21 MoneyWorld. Such properties are resold for a profit or rented out to provide income.

Fueling interest in these transactions have been low interest rates and tax benefits, according to sales agent Mike Blanchard, who works out of the realty firm's Green Valley office.

Blanchard said single-family homes offer the best rate of appreciation compared to other real estate options. He owns five rental homes in Las Vegas.

"There are two strategies when buying investment homes: buying an undervalued fixer-upper and doing a quick flip or purchasing a house for the long term while it appreciates in value," he said. "But at this point, because of demand, banks are pricing (repossessions) at market value and you're not really able to get them at a steal. For that reason, it's better to hold onto something.

"Generally, you have to own a home for three-plus years and then you'll have equity in the property. Then, you can either sell that or continue to pay down the mortgage and have a free-and-clear property for retirement income."

Las Vegas residents Al and Judy Hendley are among those who diversified out of the stock market and invested in local real estate. The couple, who own one single-family rental home, agreed there are advantages and disavantages to owning such a property.

"Keeping the house occupied and making sure you have good contractors and handymen to maintain it is the biggest challenge," Al Hendley said. "But the other side of it is the tax advantage. The depreciation and the interest are a write-off. For tax purposes it works out quite well."

Carol Duran, also of Las Vegas, was assisted by MoneyWorld agent Mary Baca in the purchase of two homes as rental properties. Duran's advice to others considering a similar purchase is "be patient."

"You should budget yourself so you can make a couple of payments without tenants," she said. "Also take into consideration the extra time and costs for things like the landscaping and window treatments. And work with a real estate agent you can trust."

Baca agreed, noting that buying during the early phases of a neighborhood's construction can also reap benefits for investors.

"(Realty agents) get the information first about what the builders are anticipating," she said. "We know which subdivisions will be starting. We can lock in on a new home that may take four to six months to build and, as each new phase opens, the base price and lot premiums go up.

"What we're seeing now is investors who get in during the early phases, putting the house up for sale as soon as they get the keys and making a profit. Or, they're renting them and having somebody else make the payments while the home appreciates and they build equity."

For investors who prefer not to manage their rental properties, Baca said a management company is an ideal option. MoneyWorld's property management team, she said, generally charges 6 percent to 10 percent of the rent payment as a fee, and handles finding and screening tenants, collecting rent and managing the home's maintenance.

Baca said she has assisted a number of first-time investors.

"When it's possible, I'm suggesting my sellers hold on to the house or condo they live in now as an investment and purchase the home they're looking to move into," she said. "Start your portfolio young."

Century 21 MoneyWorld has four offices valleywide.

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