Many homeowners who purchased their Las Vegas Home between 2004 and 2007 are most likely upside down, unless they put a substantial amount down of at least 40%. With home values dropping from a high of $315K in June 2006 to today’s average price of $140K can make selling your home very difficult and most likely will require you to sell it as a short sale. Unfortunately, just because you want to sell your home does not mean the Bank/Lender is going to agree to take a loss without some type of hardship such as job relocation, job loss, divorce or death. So depending on your financial situation, renting your home for the next 3-5 years could be an option to selling.
Giving the state of the economy, the Las Vegas Rental Market is doing well. Many former homeowners are now becoming renters as they have lossed their home to foreclosure or sold it as a short sale. For those that lost their home due to foreclosure will be unable to purchase a home for 5 years, making them an ideal long term renter. Knowing that there is still a market for rentals, the next step is determining what your home could rent for based on what other homes have rented for in the area. The rental price could be the determining factor on whether you can afford to rent your home out or if the negative cash flow is going to force you to sell your home. The last thing you want to do is rent your home out knowing full well you are going to let it go in foreclosure as this is very unethical and could cause a hardship for the tenants when they are forced to vacate the property.
If you are in a position that is forcing you to sell or rent your Las Vegas Home, it is important to contact the right real estate agent. Chances are, if you are going to sell your home, you will need a real estate agent that specializes in short sales and remember there could be legal and tax implications. If you are going to rent your home, I would recommend having a Las Vegas Property Management Company handle the management of your property.
If you have any questions about the short sale process, feel free to contact Paul Rowe at 702.376.0088. If you are thinking about renting your Las Vegas Home and are in need of Property Management Services, feel free to contact Tony Sena at 702.376.7379.
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With the higher credit requirements today and fear of job loss, many people are having to rent a home rather than purchase a home. This works very well for homeowners who are “upside down” in their mortgage. It can be a win-win situation for both sides.
I was talking with an underwriter this morning and learned that although a short sale doesn’t hit your FICO as hard as a foreclosure, lenders treat it as a foreclosure. In other words, if you are selling as a short sale, you probably will not be able to get a mortgage for 3 or more years.
We just signed a one year lease on a house in Green Valley Ranch. We signed the short lease because we are not worried at the moment about rental rates increasing. I see neutral to negative in the next year.
- Population decrease. The valley lost people last year, I expect it to lose as many this year. A lot of big construction projects are finishing (City Center) and I’m not seeing much for those construction workers to do but leave.
- The increase of home sales lately seems largely driven by investors. I won’t be surprised if there is a decent uptick in the rental inventory around late summer, early fall as all of those deals close and come back on the market as rentals.
I could be wrong, but the supply/demand trends seem to be more in favor of being a tenant than landlord in the near future.
man, if anyone was ever considering to buy in Vegas, now sounds like it is the time. With home prices down, there will be many millionares made in the Vegas market.
Sam Chapman makes a good point that sellers need to understand. Although a short sale technically isn’t bad as a foreclosure, it can still wreak havoc on a the seller’s credit.
I agree that sellers should approach a short sale cautiously. Regarding the Las Vegas market, stats published in the Austin Business Journal last week showed an average value loss of 29.52% over the past year! Austin showed an increase of 1.49%. Real estate is local. I feel for the owners here and there who are dealing with foreclosures and short sales. I cannot imagine how deep the impact is on owners in Las Vegas!