Real estate investing is a topic we get excited about at Mynd, especially here in our Reno office. If you’re paying attention to national trends, you know that Nevada is blowing up. It’s a great place to buy, and real estate investors are doing very well here.
Reno, however, is the Nevada city a lot of people tend to forget. It’s called the biggest little city.
Today, we’re talking about Reno’s real estate market and why investors at every level might want to consider it as a profitable place to grow their portfolios. If you’re wondering why people go there and why investors should buy there, this blog is for you.
Reno’s Strong Economy and Industry
Trevor has been in the Reno real estate market for the last 10 years. He got started here in 2010 and 2011, when Reno was not at the top of any investor’s list of hot places to buy.
Things have transformed dramatically over the last decade for a number of big reasons.
First, there’s the economy. An entire tech industry has really grown and is bubbling out into the rural areas of the market. Companies like Tesla, Switch, Intuit, and Panasonic are all bringing opportunities and growth to the city. Huge tech centers are growing and offering jobs and opportunities to people currently living here and relocating into Reno to work.
Year over year, Reno has not hit their building mark for housing, so development has continued to swell. Once those floodgates open, they’re nearly impossible to close. There’s a huge demand for housing, and investors have a great opportunity to get in on some of the impressive growth that’s occurring in this economy.
Numbers Make Sense with Reno Investment Properties
Investors need to do some serious math before they decide that a market is a good place to invest. In Reno, you’ll enjoy running the numbers and comparing results here to other regions. Cap rates are healthy and there’s a lot of potential for immediate and strong ROI. Investors can generally expect six or seven percent on their investment properties, which is double and in some cases triple what can be earned on a stock market bond. You won’t find these returns outside of real estate.
There are also some great renovation opportunities with Reno investment properties. You have old homes and new homes in this market, and a lot of the properties have not been touched and require full rehabs. This is what a lot of investors look for, because it gives you the opportunity to buy a property for cheap and invest some money into it, making it more valuable as an immediate rental and in the future when you sell.
In other markets, you might have a hard time finding similar rehab opportunities. Most homes have already been touched two or three times and there’s no wiggle room for further upgrades or ways to put more money into the homes to get more value out of them. Reno is full of such properties.
Out of State and Local Reno Investors
In Reno, the pool of investors is probably half local property owners and half out-of-state investors. Perhaps there are a few more from out of state. We’re seeing a lot of money from other cities, other states, and even other countries.
The recent trend has been for investors in states like California, Texas, Arizona, and Washington to sell their portfolios and buy up some property in Reno. They may have held these portfolios for 10 or 15 years, so there’s a lot of money in them. When you take all that value and do a 1031 Exchange in Reno, your returns are going to grow quickly. Asset values are at the point where if you got a mortgage in 2015, you have enough equity in 2020 to sell and make $100,000.
Some of these investments are mind boggling.
In Reno, your equity is strong, and it will rise quickly. You might buy a property that’s not quite near the market average, but as soon as you take it there by making good and smart investment decisions, you’ve set yourself up for some good profitability. You’ll have an opportunity to really make some money by renting it out.
Business is really driving the growth in Reno’s rental real estate industry, and this is an important indicator for investors who are looking for places to buy. You don’t want to go into a market that has only one industry or one source of business growth. In Reno, there are lots of businesses coming into the area, and there is no sign that the commercial activity is going to slow.
Nevada is known for its gambling industry and its tourism. Harrah’s was the first casino ever built in Nevada, and it was constructed right here in Reno. This market really isn’t known for gambling anymore. It’s more of a commercial center and an industrial park. There’s a lot of manufacturing. There’s a lot of tech companies. Start-ups are finding that this is a great place to establish a base. Multiple drivers are making this a stable and outstanding investment market.
This is a lot of information, and we have even more to share with you. Please contact us at Mynd Property Management, Reno if you want to learn more about Reno or you have any questions about buying investment properties here. We can help you identify great opportunities and we can also help you manage them.
You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.