What should I do about possibly buying a house in Las Vegas?

Question

My father has been hounding me and my husband (we are recently married) to buy a house in Las Vegas because prices are going down, however I don't believe that it is such a good idea. I am 25 (a student), the husband is 33 (owns a business in Canada-he's always traveling). We are debt free and have about 500K cash. Wouldn't investing our money be a better choice than buying a house at this point?

Answer 1

right now real estate is probably not the best place to place your money. Vegas property values are crashing and its true that you might be able to get a good deal on a foreclosure or bank owned property. The problem is what else are you going to do with you money. The stock market has been a rollercoaster ride recently and without knowing the market you could lose it all. So...
Real Estate is always a good investment. It just depends on how long you have to wait for your return. Sooner or later the market will turn and the property you buy will go up in value. so If you can get the right loan and find the right property Vegas might not be such a bad idea. Give it a little time, maybe another 3 to 6 months and during that time research the vegas market extensively. You could get a great deal!

Answer 2

Buying a home is often an individuals biggest investment. Unlike the stock market, where you typically have to pay for your stocks and then you get to enjoy any profits from them, in real estate you typically are investing a much smaller amount and seeing a return on the full amount. For Example:

To invest in $500,000 in stocks, you have to purchase $500,000 worth of stocks. If you have a 5% gain after 3 year you've made $25,000. A return on investment of 5%

To invest in a $500,000 house, you'll need 100,000 (20%). If the home appreciates 5% over 3 years. You've also made $25,000. However, you're return on investment was 25% (you made $25,000 by using $100,000). It's unlikely that you'll find that in the stock market. Add to that the interest deduction on the mortgage and it's a no-brainer.

Any investment must be looked at as a long term commitment. Both senarios have risk. Either of them could go up or down. When you mortgage a property you have 1/5 the exposure to risk ($100,000 vs $500,000).

Thank your dad, review the choices in the housing market (like you would the stock). In every market there are good choices and bad choices. Talk with a knowledgable realtor to update you about the housing choices.

Answer 3

You can actually pick up a home at a pretty good price because of where the market is. He probably doesn't want to see you throw your money away on rent, and you will also have a tax write off, even if just for your taxes.

With 500k, you could buy a property to live in and maybe even take out a mortgage that was comparable or slightly less than your current rent, then invest in additional properties to create cash flow. I would certainly recommend diversifying your investments as well so I am not saying to put it all in real estate. A good (trusted and recommended) financial planner may be of assistance to you with this.

Answer 4

I wouldn't buy in Las Vegas too much crime and vice there and the housing market is one of the worst in the country you could get a good deal but in the long run is this where you want to raise a family and the heat there is so hot 6+ months a year

Answer 5

Cool checklist! a number of those does not be on my checklist, tremendously human beings who injury others. Like, why might my purpose be to be divorced? And, being over 30, i don't qualify any further, yet now that i glance at it, countless those do not in all probability have an age decrease.