On Multi-Family in Las Vegas

Typical Las Vegas multi-family

Unfortunately, all the multi-family in Las Vegas are C Class, over 40 years old, generally in poor condition, and in distressed, high-crime areas. On paper, they do OK. Few will generate a positive cash flow once you include skips, evictions, vacancy costs, renovation, and maintenance. So, if your goal is a reliable passive income, I do not recommend Las Vegas multi-family properties. Note that my statement only applies to Las Vegas multi-family. I've owned 4-plexes in the past in other parts of the country and did well.

Below are some specifics on Las Vegas multi-family:

  • The prices are high, and there is little opportunity to increase rents. No one who could afford to pay more rent would choose to live in these areas.
  • While some multi-family have updated interiors, most have the original +40 year old systems. Most will need new plumbing, roof, electrical, water-main line, and sewer pipe. The major cost are updating systems, not cosmetic issues in the interior.
  • Today, the prices are too high to be profitable. Between 2010 and 2013 prices were low and they were cash cows. At the current prices- Renovation costs - The average age of multi-family in Las Vegas is over 40 years, The last four I looked at required renovation between $45,000 and $65,000. Typical rents range between $600 and $850/Mo. So it is difficult to justify investing that much money for so little return.
  • The tenant population is low-skilled, low income, cash-based tenants. This tenant pool is the first to be aid off and the last to be rehired during economic uncertainty (like 2008 and COVID). Four-plex average annual vacancy cost is between $3,200 and $4,000.
  • Typical tenant stays in such C Class properties is less than one year. The average renovation cost between tenant turns is $1,500 to $2,000. -
  • These properties are all located in distressed, high-crime areas. This means that there is little opportunity to increase rents. People who could afford to pay more rent will not live in these areas.
  • Multi-family properties are exclusively owned by investors. In 15 years, I have never seen a single investor-owned property or sale that was not losing money. Investors never sell performing assets.

Las Vegas is an excellent place to invest if you are looking for properties that will deliver a reliable passive income stream. Below are some of our 15-year results:

If your goal is highly reliable passive income streams, we should talk. Below are two links. One is an introduction to our services, and the other is my scheduling link.