Are you considering investing in a rental property in Reno?
If your financial goal is earning passive income and growing long-term wealth, real estate investing is generally a great choice. The potential rewards associated with making the right call in the property market is significant.
One of the major challenges of making a real estate purchase is finding the right market for your investing needs. If you're considering Reno, NV as your destination for a real estate invesment, you also may want to consider partnering with an established property management company who knows the area well.
In this article, we’ll delve into the realities of the local real estate and housing markets to find out why this city offers solid potential for property investing. You’ll understand the economic, social, and geographical factors behind spike in property investor interest that has been happening in Reno in recent years.
Guide to Investing in Rental Property in Reno
Lack of Housing Supply
Real estate prices continue to soar in the Reno area. Smart investmentors can benefit from these intense market movements. One of the biggest reasons behind the shortage is the developers’ focus on building more luxurious homes in the area.
Housing developments aren’t green-lit and finalized overnight. The coming years should see a steady appreciation of more affordable Reno properties.
Strong Rental Market
Taking a good look at the local economy and market dynamics paints a favorable picture for property investors in Reno. The median household income is lower than the Nevada average. At the same time, the median home prices are on pace reach the $400 000 mark at some point in the future.
The current reality makes a clear argument for renting. The market forces make it so that many locals may feel that home ownership is out of reach. When you add the seasonal workforce to the mix, the rental property investment potential is great, as there will likely be a strong rental market in the future.
Consider the fact that around 40% of Reno residents rent. There will likely always be a sizeable portion of students and seasonal workers in the city. That means a Reno property purchase promises an outstanding return on investment.
Large Tourism Potential
Reno may be far away from Las Vegas, but it’s close to Lake Tahoe and California. The city enjoys a significant number of tourists from that location. Local attractions and stunning natural landscapes contribute to an annually growing visitor base.
The average profile of Reno visitors is similar to Las Vegas visitors in some aspects. There are still people visiting for conventions and gambling. But you’ll pay much less for a property in Reno than one in Las Vegas, and the local natural attractions may be more impressive.
More Relaxed Take on Taxes
The local tax climate is favorable for residents and outside investors alike. After all, the state of Nevada doesn’t have an income tax.
Local property and property transfer taxes do apply. However, keep in mind that the average property tax in Nevada is about 1%, making it lower than the national average.
Proximity to California
The close proximity to California plays an important role in Nevada property investment trends. The astounding living costs and high taxes in California drive people to other states, particuarly during the COVID-19 pandemic, when many people now have the ability to work from home.
Since Reno is much closer to California than Texas, the city does get its fair share of expatriates. At the same time, this influx of people from California works in property investors’ interests. Property values keep appreciating and the strong demand for rental housing stays the same.
Great Neighborhoods in the City
Now it’s time to take a look at some of the best neighborhoods in Reno.
There are plenty of exciting locations for prospective property investors to consider.
You may consider these areas for your next rental property investment in the city. Keep in mind that these are just some examples. Reno has plenty of more neighborhoods to offer investors of all kinds.
This northern suburb offers a semi-rural feeling for its residents. The previous years have seen new developments taking place in the area. Investment opportunities in Lemmon Valley mostly consist of single-family residences.
The main target group in the neighborhood is families with children, as the public school system is outstanding there. Additionally, the crime rate is low and the average commute times are relatively short.
Are you looking to enter the upscale real estate investing scene? Somersett offers luxury homes in a planned community setting. This development covers 2,400 acres of land and offers a plethora of amenities.
Some of the top Somersett amenities include a 9-hole golf course, tennis grounds, and recreational trails. The residential center has a day spa and a Japanese restaurant.
However, the top amenities in this area coma at a price. Buying property in this northwest Reno market means paying a median price of over $620,000.
When it comes to hip Reno neighborhoods, you really can’t beat Midtown in terms of shopping, dining, and drinking spots. The area is a mix of new developments and remodeled homes from the 1930s.
The great walkability of this neighborhood suits the expectations of young adults. The nightlife, art, and antiques create a trendy atmosphere that pulls in more people every year. However, home prices have increased lately. Your investment is likely to appreciate further down the line.
Virginia City Highlands
This is a neighborhood that caters to outdoor enthusiasts. Located just south of Reno, the community has excellent access to hiking and biking trails. The spectacular mountain peaks are always in the background.
The home prices in Virginia City Highlands tend to start from mid $400,000s. This area has potential for home construction, as there are numerous vacant lots on offer.
The abandoned silver mining town of Virginia City is just around the corner for some fascinating exploration and history lessons.
The Bottom Line: Real Estate Investing in Reno, NV
The City of Reno and its surroundings show great potential for property investments. The area has a solid rental market and significant tourism potential. Compared to Nevada’s powerhouse of Las Vegas, the average home prices are considerably lower in Reno.
Reno has numerous neighborhoods that you can consider investing in. Some of the major highlights of the city’s areas include Midtown, Somersett, and Lemmon Valley.
If you're looking for help with a real estate investment in the Reno area, get in touch with the experts at Evolve NV. We provide a wealth of property management services to help our clients succeed.