As you drive around Las Vegas, its hard to miss all of the new apartment construction going on. Its also hard to miss the asking apartment rents! Over the last 5 years, apartments have seen significant rent increases, with many tenants paying over $1000 / month for an average apartment. More commonly, especially in newer apartment complexes that offer a relaxing pool, gym and other hotel style amenities, rents can start closer to the $1500 mark.
Many condo unit owners are excited to see this jump in rent prices, seeing it as an opportunity to capitalize on their investments. However, after doing some research, many realize that their condo, though in a gated community with a pool, gym and well maintained grounds, doesn’t quite fetch the same amount of rent. Rather, they might see their property leasing for as much as 25% less. So what makes the difference?
There’s a couple significant ones. First, as a homeowner, when leasing your property, you are typically requiring at least a one month security deposit. This is designed to protect you in cases of lost rent or damages. On the other hand, many apartment communities offer incentives – either waving the deposit, making it minimal or offering a bond through a 3rd party. The move in process becomes much easier and attractive.
Secondly, apartment communities typically have on site maintenance. Whatever issue there might be inside of an apartment can be addressed right away, typically at no cost to the tenant, even changing air filters on their behalf. On the other hand, when you rent a condo, there is usually a measure of responsibility placed on a tenant for completing basic repairs.
Those two incentives allow apartment communities to charge a higher rent. And it works, based on the fact that apartment occupancy is high right now in the valley. There is encouragement, though, for condo owners: rents have been going up consistently. Over the last 5 years, rents, on average, have appreciated 15-25%, putting more money in many owners pockets.