Real estate investments in Las Vegas can be as much of a gamble as playing craps at the casino tables if you don’t know the differences between the different types of property. It’s important when you invest to consider the characteristics of the real estate you choose because the performance of your property will affect that of your investment.
Non-Income-Producing Real Estate: Investments in things like houses, vacant commercial buildings, or vacation properties can provide you with a stable income as long as your return is through capital appreciation. You won’t receive money from rent so your profit will be from increases in value.
Income-Producing Investments: The four types of income-producing real estate are retail, offices, leased residential, and industrial, according to Investopedia.com. There are other types that are not as popular like mini-storage, senior care housing, and parking lots.
Retail Properties: The demand for retail space is determined by many factors including location, visibility, population growth, and income levels. This kind of investment is considered stable because retailers usually sign long leases and don’t relocate as much as office properties do. The biggest downfall is that retail properties are dependent on how well the economy is functioning.
Office Properties: These are located in downtown hubs and suburban office parks; they are normally the highest profiled property type. Office property investments are sensitive to the economic market. During prosperous times these investments perform well because the demand for space increases rental rates. But if you lose a tenant, you may experience lower returns because of the high operating costs.
Multi-Family Residential Property: Investors usually see the most stable returns from residential properties because even in bad times, people need places to live. And if you do lose a tenant, the impact is considerably smaller compared to that of other types of property investments. The best investment home areas in Las Vegas include Summerlin, Green Valley, and Boulevard Mall, according to Alliancelv.com.
Industrial Property: The average real estate investor usually has an industrial property as a staple because they require smaller investments. Industrials also have lower operating costs and less management involvement.