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What Do Appraisers Look For When Determining A Property’s Value?

What Do Appraisers Look For When Determining A Property’s Value?

What Do Appraisers Look For When Determining A Property’s Value?

Most people are surprised to learn what appraisers actually look at when determining the value of a real estate property. A common misconception homeowners generally have is that the value of their home is determined after the appraiser has completed their physical property inspection. However, the appraiser actually already has a good idea of the property’s value by the time they have scheduled an appointment to stop by the property. The good news is that you don’t have to worry so much about pushing back an appointment a few days just to “clean things up” in order to help influence the value of your property. While a clean house will certainly make it easier for the appraiser to notice improvements, the only time you should be concerned about “clutter” is if it is damaging to the dwelling.

The Key Components Addressed In An Appraisal

  1. The Site: Location, view, topography, lot size, utilities, zoning, external factors, highest and best use, landscaping features.
  2. Design: Quality of construction, finish work, fixed appliances and any defining features.
  3. Condition: Age, deterioration, renovations, upgrades, added features.
  4. Health & Safety: Structural integrity, code compliance.
  5. Size: Above grade and below grade improvements.
  6. Neighborhood: Is the property conforming to the neighborhood?
  7. Functional Utility: Is the property functional as built – style and use?
  8. Parking: Garages, Carports, Shops, etc..
  9. Other: Curb appeal, lot size, & conforming to the neighborhood are obvious to the appraiser when they drive down into the neighborhood pull up in front of your home.

Keep in mind that when an appraiser enters your home, they are going to look at the overall design, condition, finish work, upgrades, any defining features, functional utility, square footage, number of rooms and health and safety items. Be sure to have all carbon monoxide and smoke detectors in working condition. Since the appraisal provides half the weight in any credit decision involving the security of real estate, the appraisal should be done by a qualified, licensed appraiser whom is familiar with your neighborhood, and the type of home you are buying, selling or refinancing.

If you’re interested in what specifically appraisers are looking for, here is a copy of the blank 1040 URAR form that is used by every appraiser in the country.


Related Appraisal Articles:

Preparing Your Las Vegas Home for Sale

Common sense will tell you that the nicer your home looks, the better your chances of selling at or close to the asking price. However, don’t go overboard and practically remodel the entire house before listing the property. Not only will a project of this scope cost you plenty, but you probably won’t recoup even half of your fix-up expenses.

Cosmetic upgrading and repair however should always be secondary to plumbing, heating/cooling and electrical repair. Roofing and structural repairs are an absolute must as well.

Certain upgrades and repairs designed to improve the property’s “eye appeal” include:

  • A fresh coat of paint, inside and out, is a most effective way of making the home look newer and more inviting. Neutral colors such as beige or off-white seem to work best.
  • If the interior of the home has wallpaper in some or all of the rooms, particularly if it has a worn look, strip it off and paint. Replacing the wallpaper with another design of your choice may not appeal to a prospective buyer, and could actually negatively influence a buyer’s decision.
  • If any of the rooms are carpeted, and the carpeting shows signs of wear or discoloration, replace it. Use neutral colors, and medium shades, not too light or too dark. Carpeting and painting are cost effective ways of sprucing up the home’s environment, and can help increase the price tag by much more than the cost of material and installation.
  • If the floors are hardwood, refinish if necessary.
  • Replace chipped or cracked tiles. It is equally important to repair or replace grouting. If the grouting is in good shape, be sure it has been scrubbed clean.
  • If you have Formica counter tops that are showing signs of wear, replace them with a do-it-yourself  kit, available at hardware stores, or if you are not inclined to tackle the job, which can be somewhat tricky, hire a competent handy man.
  • The appearance of the kitchen can be a huge influence on the overall impression of the home, and is the most important part of the house to revitalize, if needed.

Although kitchen remodeling can most often return 100% of investment, it can cost a ton of money. However many kitchens can look their best by a simple resurfacing of the cabinets, if needed, and perhaps the installation of a new sink and fixtures.

  • Replace or refurbish exterior siding.
  • Examine and repair/replace window and door caulking.
  • Replace doorknobs and locks if worn looking.
  • Repair, refurbish or replace the front door if necessary.
  • Fix or paint fences and backyard walls.
  • Replace any old, outdated kitchen and laundry room appliances

Include a home warranty package as a “throw-in” if the home is ten years old or more. It’s a nice gesture to offer a prospective buyer a “piece of mind” package, and will go a long way toward establishing amicable negotiations.

If you have any other questions about getting your Las Vegas Home ready to sell, feel fee to give us a call at 702.376.0088.

Investing in Las Vegas Real Estate – Pre-Foreclosures and Foreclosures Part II

The complexities involved in Las Vegas Distressed Property negations can be many, and an inexperienced investor without competent advisers might encounter major problems that could have many unpleasant consequences, including financial loss.

So, as a word of caution to the inexperienced, it cannot be said often enough that a thorough investigation and verification of all the factors involved in a purchase of this kind, by competent and trusted advisers, is the best assurance one can have of becoming a successful Las Vegas Distressed Property Investor.

In addition to a close and thorough inspection of the property by a licensed and experienced home inspector, other important issues must be investigated and resolved before committing to purchase a foreclosure or pre-foreclosure property.

Any additional encumbrances upon the property, in addition to monies owed to the lender, could cause unpleasant consequences for the buyer if a thorough title search and other investigations were not undertaken.

For example, the investor and advisers should have a thorough knowledge of all federal, state and county laws pertaining to the purchase of a distressed property from an owner, lender or government agency.

Outstanding utility bills, liens of any kind, and any title issues, such as the name or names appearing on the deed matching those on the title, etc., have to be examined and evaluated prior to any purchase commitment on the investor’s part

If a seller has declared bankruptcy, the seller no longer has the authority to deed the property to anyone. The proper filing through bankruptcy court and the disposition of the deed under the authority of the bankruptcy trustee is the final word on how a property is held or disposed of.

It is certainly advisable that the investor has satisfactorily checked out all of the above before making a purchase or no purchase decision. Use all of the safeguards at your disposal, (your advisory team, etc.) to protect yourself from any unforeseen consequences.

Buying REO properties at auction is one of the riskiest investment ventures a newcomer can choose to pursue. The dangers that a newcomer can face in the business of buying properties at auction, can easily be compared to jumping into a pool full of hungry sharks. The chances of survival are equally the same!

At auction you are bidding on “as is” properties, with no warranties or guarantees of any kind.  There could be liens or loans still pending.

There is always the possibility of a lawsuit by parties attempting to overturn the sale, there could be extensive repairs needed to get the property in saleable condition, etc.

Certainly, there are investors with a solid background of successful auction buying and selling, but if you are new to this phase of real estate investing, you most probably won’t be one of them.

If you have any questions about investing in Las Vegas Real Estate, feel free to give us a call at 702.376.0088.

Investing in Las Vegas Real Estate – Pre-Foreclosures and Foreclosures

Negotiating to buy distressed properties from a lender certainly shouldn’t trouble the conscience of an investor; however, some investors feel pangs of guilt when trying to negotiate a deal with a Las Vegas Homeowner in financial difficulty.

If you are a creative investor with a conscience, you are not trying to take unfair advantage of anybody. You are not a predator. Instead, you will be attempting to promote a win-win situation that relieves the homeowner of his/her burden, and creates a profitable deal for yourself. This can be done, and is frequently done.

Las Vegas Homeowners in financial difficulty, and who are in danger of losing their home, but are not as yet in a pre-foreclosure situation, would certainly welcome the opportunity to sell at a fair price, and the lender would equally be freed of the expense and difficulties involved in foreclosing and trying to recoup at least a part of their investment.

Seems only fair that the investor should earn a certain profit for his efforts and output of funds. Besides, depending upon the condition of the home, the investor may have additional expenditures for repairs and upgrades necessary to increase the property’s value.

If the homeowner is already in a foreclosure situation, the investor must contact the borrower first, and cannot approach the lender or learn details of the borrowers overall financial situation from the lender without written permission from the borrower.

Once the negotiation process has begun, the investor, regardless of whether dealing with a bank, private lender, or a government agency ( FHA, VA, etc.,) will no doubt have an exit strategy that will include contingency clauses in the proposal. These clauses basically gives the investor an “out” if, for example, the appraisal report is negative for one reason or another, or if a home inspection reveals certain serious problems, such as structural damage.

Additionally, the investor may -unless it is an all cash purchase- specify in the proposal agreement that the purchase is contingent upon the investor obtaining financing under specific terms and conditions.

We are only scraping the surface at this point, since there are many other factors to consider as an investor in foreclosure and pre-foreclosure property.  Since this type of real estate investing can be as complex as it is profitable, it probably should be avoided by a new player in the field, and left to the expertise of a more seasoned investor who conferences with advisers that have considerable experience in this specific area of real estate investment.

Negotiating the purchase of a pre-foreclosure, buying a property at a foreclosure auction, or purchasing the foreclosed property from a lender each take a different negotiating tactic which will be covered in brief in the second part of this article.

If you have any questions about investing in Las Vegas Real Estate, feel free to give us a call at 702.376.0088.

Choosing the Right Las Vegas Property and Location

Finding a Las Vegas Home and location that best fits your requirements will be a lot easier if you first understand that you should be clear in your own mind as to what your priorities are.

Sounds strange, but any Realtor can tell you that some people are not really sure of what they want in a property, and have decided they will just keep looking at homes until they find a property in their price range that seems to be “a good fit.”

By establishing some firm guidelines as to what really suits your needs, and discussing with your appointed real estate agent what those needs are, you will have increased your chances of finding your ideal new home in a shorter time, and with less frustration on both your part and your Las Vegas Realtor’s.

After setting a price range guideline, you should analyze and then list all the requirements in a home and neighborhood that are most important and most suitable to you and your family’s needs and lifestyle. For example:

  • One or two story construction
  • Square footage –interior and lot size
  • Number of bedrooms required
  • Spacious eat-in kitchen or breakfast nook adjoining family room
  • Formal dining room, or open floor plan dining room
  • Extra bedroom (guestroom) or den
  • Minimum number of bathrooms or half-baths
  • Fireplace
  • Garage size
  • Roomy backyard
  • Xeriscaped or lushly planted front yard
  • Fenced, walled or open property
  • Trees

Of course, some compromise will undoubtedly be necessary, but the guidelines you have established will certainly help in your decisions. Now, what about the Las Vegas Neighborhood?

The neighborhood has a direct influence on property values, so the area in which you choose to live is of equal importance to your choice of a home.

Again, you need to list in order of importance what neighborhood values are necessary and what compromises you and your family are able and/or willing to accept. For example:

  • Distance to work (driving time) and easy access to major thoroughfares and freeways
  • Availability of public transportation
  • Nearby schools and quality of the school district
  • Higher educational facilities within reasonable distance
  • Overall appearance of the neighborhood; regardless of income level, whether blue-collar, middle or upper class, neighborhood homes should have the appearance of being well –maintained and neatly landscaped
  • Any repeated sightings of neglected, or abandoned homes are a definite RED FLAG!
  • Check with your Realtor to get the neighborhood stats on short sales and foreclosures before you decide to make an offer on a home in the area.
  • Crime statistics are another vital piece of information you should have before committing to a property

So, without a real understanding of what would be a best home and neighborhood fit for you and your loved ones, you could wind up spending fruitless hours scanning MLS listings, to no avail, and driving your poor, dedicated Las Vegas Real Estate Agent crazy.

Buying and Selling Las Vegas Real Estate

The Negotiation Process

The price may be right, and there is an enthused and qualified buyer, and an enthused and eager seller, but the deal falls apart. Why would this happen when all the right elements are in place? These situations can often occur, much to the frustration of all concerned.

There may be many possibilities to consider regarding what might have caused the collapse of the deal. Possibly a problem arose between seller, lender and buyer, such as an appraisal dispute, or a buyer’s -intentionally or unintentionally- undisclosed debt uncovered by the lender.

But, guess what? If there were no problems with the appraisal or issues between buyer and lender, then the real problem may have surfaced during negotiations between buyer and seller.

Negotiations between buyer and seller can most often be a sensitive process that often uncovers certain demands and refusals by either party that can lead to an impasse. In situations such as these, an experienced and knowledgeable Las Vegas Real Estate Agent’s people handling skills can very well be the key to solving the dispute.

A real estate agent’s success in his/her profession is dependent not only upon knowledge of the business, but equally based upon an understanding of human nature, and the ability to arbitrate disputes.

It has been said before, but an agent’s ability to foster an atmosphere of trust and cooperation between buyer and seller during the negotiation process is often the answer to resolving disputes and clearing the way to a successful closing.

Forging an understanding that neither party is going to get everything they want, and that some concessions must be made, or the buyer will not get the house he/she had wanted to buy, and the seller’s property will have to be put back on the market, can be a convincing argument for both parties, and can lead to the acceptance of a give and take attitude that is needed to close a deal.

Buyer and seller must be made to understand that a win-lose scenario in which only one party gets what they want can rarely work in a real estate deal, and a win-win situation in which each party is given options for mutual gain is the best route to take.

Fear, anger, distrust and anxiety are some of the negative emotions that might surface during the negotiations, and the Realtor must be alert to these feelings and help to dispel them.

The skilled real estate negotiator must first start with an understanding of his client’s real wants and needs. Wants and needs, for example, are not always “set in stone,” and the agent must assure both parties that a solution must be reached that is fair to both parties, and that would be the only way  differences can be  resolved.

Las Vegas Master Planned Communities; Coronado Ranch

Located off Rainbow Boulevard and the I215 Beltway, Coronado Ranch offers a number of neighborhoods of single family homes and townhomes with views of the Spring Mountains during the day and the Las Vegas Strip at night.  Home prices in this delightful master planned community currently range from $101,000 to $399,000.  The builders who contributed style and design to the community are Carinao Homes, American West, Astoria and Pacific Southwest Development.

  • The Resort is a rental community of flats and townhomes with a 24/7 guard gated entrance.  Amenities include pool, spa, fitness center and concierge services.  Six floor plans offer units from 788 to 1,310 sq.ft. with rentals from $850 to $1,395 per month.  Apartment amenities include a fireplace, ceiling fans, 9 ft. ceilings, private balcony or patio and more.
  • Paseo Homes range from 1,347 to 1,718 sq. ft. priced from $169,990 to $186,990.  This community offers an active, outdoor lifestyle geared to young families and singles.  Amenities include a front yard paseo, which is a place to gather and socialize with neighbors, several parks, three pools and four playgrounds with tot lots for the little ones.
  • Heritage Homes, built in 2007/8, range from 1,165 to 1,853 sq. ft.  Floor plans include five single and two story homes with two to three bedrooms and a two car garage.  Some homes feature island kitchens, game rooms or a study.
  • Pinnacle Peaks is a gated community built in 2004 with ten single and two story floor plans.  Homes were built with three car garages and up to six bedrooms and range in size from 1,800 to 5,400 square feet.  Some homes offer a basement and large lots ranging in size from 9,000 square feet to approximately 1/4 acre.
  • Woodbridge homes range in size from approximately 3,435 to 4,770 square feet with four to six bedrooms and three car garages.  Built in 2007/8, homes offer two to three stories.  Some homes offer a library, elevator, dry bar, game room, fireplace, study, dual master suite and more.

Spanish Trails Real Estate

Spanish Trails is a luxury community located in the southwest section of Las Vegas close to Tropicana and Rainbow not far from the Strip.  Developed in the 1980’s,  Spanish Trails covers 640 acres with 1,252 homes in eleven different neighborhoods.

This master planned community was one of the first actual private guard gated golf communities in the Las Vegas Valley.  Visitors to this gorgeous enclave must pass through one of two elegant guard gates boasting waterfalls and palm trees.

Among the many amenities offered in Spanish Trails is a private 27 hole golf course designed by Robert Trent Jones, Jr. which is a visual delight for players with numerous lakes, streams and waterfalls as well as views of the mountains.  Spanish Trails also offers a tennis center, two pools and spas and a fitness center.

Residences on the golf course include town homes from $300,000, semi-custom homes from $500,000 and custom estate homes beginning at $1,000,000.

If you would like to take a tour of one of the many master planned communities in Las Vegas, feel free to give us a call at 702.376.0088.

The Home Appraisal Process

As Las Vegas Real Estate Agents, we are all well aware of the pros and cons of the Home Valuation Code of Conduct (HVCC) and how this piece of legislation was initially intended to insure the purity of the home appraisal process and the integrity of all concerned.

Apparently, something went amiss during the drafting of HVCC, and in the confusion, and as a direct result of HVCC’s requirements, many seasoned home appraisal professionals have been leaving the industry, primarily due to regulations which have negatively impacted their income.

It’s not the intent of this article to microscopically analyze the problem with some of the legislative negatives inherent in this bill, since there are many articles, blogs, whatever, that have addressed, and are still addressing these issues.

Basically, this article is intended to offer an overview of the appraisal process to the first-time home buyer, and to point out how important the results of this process is to all concerned; buyer, lender and realtor.

  • A professional appraiser is a person who has undergone a specific educational regimen which has trained that person to have the skills and knowledge to render an opinion as to the market value of a property.
  • The appraiser’s written report as to the current market value of a property, is of primary importance in the decision making processes of the property owner, prospective buyer, and lender.  A negative report, for example, stating that the property is worth less than the asking price, would cause many reactions; the buyer or lender backing out of the deal, the Realtors loss of commissions, etc., Or a possible re-negotiation to lower the asking price to reflect the assessed market value.
  • The appraiser’s report reflects many things that would positively or negatively impact the property purchase negotiations, such as the property’s overall condition, upscale or deteriorating neighborhood for example, number of homes in the neighborhood in decline, in foreclosure etc., or if the home is a showpiece in a neighborhood of lower priced homes, or a lesser type home in a neighborhood of more expensive homes.

Certainly, there are numerous factors that the assessor is trained to consider; however, it is important to understand that if the appraiser is unfamiliar with the area, the appraisal report could be faulty.

Under the rules established by the HVCC –which we are not going into in detail here – an appraiser not familiar with the area could be assigned to inspect a particular property on behalf of a lender, and the result may well be a flawed report.

Of course, the potential buyer could appoint an appraiser more familiar with the neighborhood in which the seller’s property is located, and if the buyer’s report, for example, differs with the lender’s appraisal report, the buyer, seller and lender could negotiate to save the deal, such as ordering a third report, and reach an agreeable compromise. The buyer and seller may agree to split the appraisal costs, etc.

However, until the issues that have encouraged experienced and competent appraisers to abandon their profession is resolved, appraisal headaches will apparently remain.

Pahrump, Nevada

Pahrump is an unincorporated southern Nevada town located in Nye County. The Pahrump Valley was Shoshone territory until settlers began moving into the region in the latter part of the 19th century.

Pahrump is situated in the southeast corner of Nye County, between Death Valley, sixty miles to the east, and Las Vegas, sixty miles to the west.

The arrival of settlers soon changed much of the landscape of this high desert territory, which eventually became an area of large agricultural holdings and livestock ranches. Pahrump remained an isolated community for many years, with no paved road access to the town and no telephone service.

It wasn’t until the 1960s that phone service was established and a paved road from Las Vegas to Pahrump was constructed. Further road construction linked Pahrump with neighboring areas, including California, and the town’s first high school was finally constructed in 1974.

Pahrump has changed dramatically since its farming and cattle raising days, to a culturally and family oriented community, and a town with a governing body that truly cares about its residents.

Pahrump Valley has a museum, arts, culture, and film festivals are regularly staged, and a large, modern well equipped library is further evidence that due to the current economy, although employment opportunities at present are low, Pahrump’s vibrant, growing community is well poised for future growth.

Outdoor activities have always been a favorite pastime for Pahrump’s citizens, and the town has three parks constructed to accommodate swimming (in the warmer months,) hiking, biking, basketball, and children’s play areas.

Golfing, a motor speedway for racing fans, and the Spring Mountain Recreation area for mountain hiking, horseback riding, and camping out, are a sampling of the many fun things to do in Pahrump and the surrounding areas.

The Nye County School District oversees several elementary, middle, and high schools that have been highly rated for quality of education, and the area is served by private schools such as the New Hope and Community Christian Academies, as well.

Currently, the average listing price for a single-family residence in Pahrump is $157,846, up 4.7% from the first week in July. A median sales price for homes in Pahrump is currently down 14.9% as compared to July 2009, and as of this writing the median sale price is $103,211. The average price per square foot is at $64, which reflects a decrease from last July of 15.8%.

Pahrump is certain to experience rapid growth once Nevada’s economic woes have been resolved. Lured by tranquil surroundings, and a cost of living index nearly 16% lower than the national average, Pahrump’s population has increased by 46.29% since 2000 to its present population of 11,245.

If you have any questions about Pahrump or would like to view homes for sale in the Pahrump area, feel free to give us a call at 702.376.0088.

Las Vegas Real Estate Investing – High Rise Condos

The Las Vegas Condo-hotel Concept Pt. II

As with any potential real estate investment, a buyer should cautiously examine contractual details, make observations, and examine facts before deciding on whether or not a Las Vegas Condo-Hotel is in line with your goals and lifestyle.

  • The location of your prospective purchase should be in a desirable area. Although the condo home itself may be a well designed and luxurious unit, location is an important factor in desirability and will most certainly reflect upon the ultimate appreciation of the property.
  • Is the unit located in a structure built specifically as a luxury hi-rise, or has the building been converted from a standard hotel or apartment complex into condo units?
  • When was the structure built? Some older condo conversion buildings may have smaller floor plans, less desirable locations and fewer amenities, but are usually much less expensive.
  • Good management and a developer of excellent reputation is a most important factor in value appreciation of the investment.
  • The units themselves increase in desirability if they have spacious, well-designed floor plans, high ceilings, sizeable balconies, impressive views, top quality appliances, granite counter tops, and marble vanities.
  • What amenities are available? Among the most desirable features are: a state-of-the-art security system, secured parking, 24-hour front desk, concierge services, work-out room, swimming pool (or pools,) lighted tennis court, on premises maintenance crew, card room, library, clubhouse or meeting room. Nicely landscaped grounds add to eye appeal.

Owner/management agreements generally include the following specifications:

  • Amount of net (after deductions) rental revenue shared by condo owner and the management
  • Condo-hotel owner responsibilities for insurance, real estate taxes, capital improvements, debt service, etc.
  • Management responsibilities, including maintenance, housekeeping, administrative, front office, marketing, other operational expenses, etc.
  • Rental program agreement specifying number of days annually that the unit will be available for rental purposes and notice requirements, and contingency procedures

Although it is, of course, not a requirement of purchase to rent a condo-hotel a number of times per year, or rent it at all.  Renting the unit, however, not only defrays owner costs but is profitable as well. In fact, that convenience is the primary reason, of course, that these kinds of units are purchased in the first place.

However, some come-and-go condo hotel owners may eventually decide to stay permanently. In that case, the rental agreement with management would be canceled.

In fact, a condo hotel purchase should be considered similar to investing in a second or vacation home, but with an added part-time rental feature, and hassle-free, with no maintenance or grounds keeping chores to come home to.

Feel free to give us a call at 702.376.0088 with any questions about the Las Vegas High Rise Condo market.

Las Vegas High Rise Condos

The Las Vegas Condo-Hotel Concept

The veritable explosion of high-rise condo construction in Las Vegas has not only dramatically altered the city’s skyline, but has considerably altered the lifestyle of many Las Vegans, and the repeat visitors to our city.

Prior to  the proliferation of hi-rise condos in Las Vegas, repeat visitors such as vacationers, businessmen and women, and high rollers would primarily check in at a hotel, motel or, depending on the reason and length of stay of the visit, rent a private home on a temporary basis.

The availability of conveniently located luxury condos convinced many of these repeat visitors that it would make economic sense to purchase a Las Vegas Condo home of their own, that in the long run would build equity, and be more cost-effective than renting a hotel room or suite and dining out for every meal.

Additionally, many investors were attracted by the offer of many of the big name luxury hotels such as the Ritz-Carlton, Sonesta, Starwood, Hilton, Trump, Four Seasons, etc. to purchase units (condo-hotel homes) that are part of the hotel structure, or luxury units built as adjacent structures to the hotel, such as Palm Towers, for example.

These condo hotels offer owners who plan to use their purchases as vacation homes, or use the condo intermittently on business trips, the opportunity to temporarily rent out their units when the owners are away.

Benefits are twofold.  The owner agrees to place the property into an organized rental program, saving the unit owner the trouble and expense of self-advertising, and rental revenue, shared with the rental program operator, allows a portion of the rental fees to be credited to the condo owner.

The operator of the rental program who shares rental fees with the owner, performs a number of services on behalf of the property, among which are marketing the unit to temporary renters as a hotel, maintains the property, supervising the front desk, overseeing housekeeping services, providing- concierge services, and food and beverage services.

Another attractive aspect of condo hotel ownership that has appealed to investors is that these units can be sold at anytime by the owner at his/her discretion.

The vacation home convenience and income potential of owning these units was an irresistible attraction to many investors who are frequent Las Vegas visitors, however, these purchases have proven just as vulnerable to the downturn in the nation’s economy as has the rest of the housing industry.

Additional information that a potential condo-hotel unit buyer should be aware of before considering this kind of investment will be covered in a follow up article, and will include such details as:

  • Typical buyer/management agreements
  • Guarantees –if any – offered to the buyer
  • Analyzing the units for best location, amenities, etc.
  • Key elements to look for when analyzing the profit potential of a condo-hotel purchase

Feel free to give us a call at 702.376.0088 with any questions about the Las Vegas High Rise Condo market.

Investing in Las Vegas Townhomes

Investing in Las Vegas Townhomes

The classification of “townhome” is often confusing to people, since townhomes offer some of the attributes of both a single-family home and a condominium. A townhome is a structure that shares, or is attached by a common wall, either a garage wall or an interior (living room) wall to an adjacent structure.

If the land occupied by the townhome is part and parcel of the deed, then the building is designated as a “townhome.” However, if the land is not the actual property of the homeowner, then the townhome is designated for insurance and tax purposes as a condominium.

Townhomes can be constructed as a single-story, duplex, or triplex. Depending on how the bylaws of the townhouse community are structured, each owner may have an additional shared ownership of the complex, which would include the common areas, parking facilities, swimming pool, recreational facilities, and clubhouse.

A governing Home Owners Association (HOA), oversees the community’s adherence to Covenants, Conditions & Restrictions (CC&Rs.) These policies dictate the legally enforceable operational guidelines that the Home Owners Association must follow and the rules homeowners are obligated to follow, inclusive of the homeowner’s obligatory monthly payment of association fees to cover the costs of landscaping, repairs, maintenance, taxes, etc., of the common areas of the community.

The townhome “lifestyle” appeals to those who enjoy close community living, freedom of the responsibility for maintenance and repair of the exterior portion of their home, easy access to recreational facilities; swimming pool, workout room, clubhouse, tennis courts, etc.

The question of whether or not a townhome is a good investment, has many pros and cons. Certainly, if the purpose of the investment is for rental or resale, the Home Owners Association guidelines assure that the unit’s exterior will be well maintained.

Appreciation is usually not quite on a par with single family residences, and in a down market, townhomes most often depreciate at a faster rate. Certainly, the age of the townhome, how well the interior has been maintained, and if the home has been upgraded, as well as the location, are important factors to consider.

It is equally important to investigate the financial condition of the Homeowners Association. An examination of the operating budget, and copies of past years budgets should be compared. Amounts allocated to the reserve fund, a current financial statement, including a balance sheet, and operating cost statement are necessary to examine as well.

Reviewing the financial statements, insurance declaration and all pertinent documents necessary to analyze the financial health of the HOA is as necessary as evaluating the townhome itself, before deciding if the potential investment is worthy of pursuit.

Shelter Realty is a Real Estate and Property Management Company specializing in the areas of HendersonLas Vegas and North Las Vegas, NV. Feel free to give us a call at 702.376.7379 so we can answer any questions you may have.