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Cheaper to Buy rather than Rent in Las Vegas?
By Stephen Roberts | June 8, 2010
It is true, with where the market is currently at, it is cheaper to own a home than to rent in the Las Vegas and Henderson Valley. Las Vegas ranked number 10 among the 50 largest U.S. cities by population in terms of price-to-rent ratio. According to Trulia.com Las Vegas has a 10.92 price-to-rent ratio, which is determined by multiplying rent times 12 months and dividing that figure into average list price. A price to rent ratio under 15 indicates that it would be much cheaper to own a home in that city rather than rent one. A ratio in between 16 to 20 means that costs of ownership may be slightly greater, but it may make more financial sense to buy rather than to rent. A city with a ratio above 21 means that it is much less expensive to rent a home in that area rather than buy one.
The reason for the ratio being so low in the Las Vegas and Henderson Valley is because of the short sales and foreclosures. The amount of people losing their home drives the demand for rentals in the Valley up. There is much demand for rental properties so naturally rent will increase. Because of all the foreclosures and short sales in the market the prices have driven lower than we have seen them in a long time. Home prices in Las Vegas have dropped nearly 40 percent in the past 5 years. All of this makes the cost of ownership pretty low here in Las Vegas and Henderson. It is safe to say that right now in the Valley it makes more financial sense in most situations to own a home rather than to rent one.
For all your Real Estate needs contact Steve Roberts at 702-739-4392 or visit my website at www.hendersonrealestateonline.com!
Topics: Henderson Nevada Homes, Las Vegas Nevada Real Estate, Southern Nevada Monthly Economic Update, Summerlin Nevada Real Estate, foreclosures | No Comments »