Reader asks about buying condominium as an investment

Q: I know Las Vegas is a popular tourist destination and one that I visit often, so I was thinking about purchasing a condominium that I could use when my family and friends come to visit. I know prices on condos are lower than I've seen in years. But when I'm not using it, I would like to be able to rent it out to others to use. Are others able to rent out their properties now? -- Greg P., Houston

A: That's a good question with a largely positive answer.

If I understand your situation, you may be in the market for something like a furnished condominium. Fellow Realtors and property managers who specialize in this area tell me the market remains strong and steady for property owners who rent out furnished condos to executives and others who need temporary housing here.

Furnished condos can be rented by the week, month or for a longer term. You should always check with your tax advisor for more information on your particular situation. But, in many cases, purchasing such properties can be a good and flexible investment.

If you're serious about this, you should also consider hiring an experienced and qualified property management firm to manage this property for you.

As for what kind of property to purchase, a condo in decent condition with two bedrooms and two baths is a fairly popular example. You can find such properties all over town. And even though investors have been buying up much of this inventory in recent months, you can still find such condos in some parts of Southern Nevada for well under $100,000.

Traditionally, the demand is highest for short-term rental properties on or near the Las Vegas Strip, which is now home to a number of high-rise and mid-rise condo developments with plenty of available units selling for much less than they did when they were built.

Most of all, I'd say your timing is good, since many local properties are selling for less than what it cost to build that same home or condominium today. At the same time, tighter lending standards and foreclosures are prompting more people to rent homes.

To answer the last part of your question, I'd say that most real estate investors I know are able to rent their properties here fairly easily. And unlike the days of our housing boom earlier this decade, many of these property owners are now realizing positive cash flow each month on their rental properties.

We appear to be in for a slow recovery in our local housing market. But history tells us that local housing prices will eventually begin to appreciate again. When prices do rise again, your property will eventually be worth more than the bargain price you can expect to pay today.

For more information on local real estate issues, and for the latest local housing statistics from the Greater Las Vegas Association of Realtors, consult a qualified local Realtor or visit lasvegasrealtor.com.

Rick Shelton is the president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for 20 years. GLVAR has 12,500 members. To ask him a question, e-mail him at ask@glvar.org. For more information, visit lasvegasrealtor.com. Questions may be edited for space and clarity.