New vs. Resale Homes for Investors
If you are an investor looking to add more rental properties to your portfolio, should you consider new or resale properties? According to data supplied by the Federal Reserve Bank of St. Louis the national median average of a new home is 28 percent higher than a resale home.
In the Las Vegas Valley the picture is much different. According to RCG Economics the difference in Las Vegas is a staggering 64 percent. The median price of a resale home in Las Vegas is $220,000, to buy new it will cost an extra $123,825 or $316,825. The numbers just don't work for the savvy investor watching the bottom line.
The Las Vegas rental market is very competitive and will not provide the extra cash flow to cover the additional investment.