Guide to Las Vegas

Introduction

America’s Playground, Las Vegas, was still part of Mexico until 1855, and since then has developed at such a rate to become one of the biggest and most-visited parts of the US.

This desert paradise for gamblers attracts visitors from all over the world, not only for the casinos, but the also the associated attractions of world-class entertainment, sporting events and as a base from which to explore the Grand Canyon.

The fact that there are no significant seasonal changes in the city mean that the ‘high’ season extends right through the year. Not only is this good news for those visiting, but it means that hotel occupancy and rental yields stay high throughout the year.

The region

In the middle of Nevada’s Mojave Desert, Las Vegas was initially established as a stopover on the pioneer trails and later as a railroad town in the early part of the 20th Century. Although gambling was legalized in 1931, the first of the major casinos, the Flamingo, only opened in 1946, making up the first part of what would become the famous Las Vegas Strip.

Development of the hotel and casino businesses along the Strip and in many other parts of the city continued, with properties becoming bigger and more ambitious all the time. The first megaresort casino, The Mirage, was opened in 1989 and casino resorts in Las Vegas now routinely have upward of three thousand suites apiece.

The demand to come to ‘Sin City’ continues to grow unabated it seems. Despite the huge resort hotels that line the Strip, hotels often report occupancy rates of more than 90 per cent throughout the year as tourists and gamblers flock to Las Vegas.

The Las Vegas Strip has been redeveloped and extended at various points throughout its history as the hotels have grown and extended. The present incarnation of the Strip is now being supplemented by a growing downtown district housing more hotels, attractions and office facilities.

Climate

The arid climate of the Mojave Desert is marked by long and very hot summers, mild winters and little rainfall. Summer temperatures often head above 38 degrees C, while in the winter lows tend to reach 16 degrees C. Rainfall is relatively rare, however between July and September there are frequent thunderstorms brought in during the afternoon and evening by the Mexican Monsoon.

Getting there

Flights from the UK direct to McCarran International Airport operate through different carriers from a number of UK airports. Flight time is significant – up to 11 hours – so be prepared for this.

Property

The major attraction of buying property in Las Vegas is for the investment opportunity it affords. Although most investors have visited the city or have the intention of doing so in the future, it will be rare to find people who are buying there for a holiday home or as a permanent base. This will remain the preserve of professional gamblers or those who have business interests in the area.

This fact has an influence on the types of property available on the market. The downtown district is where most of the new apartments are being constructed. Las Vegas is currently in love with the idea of mixed-use developments, combining residential space with offices and retail units. This use of development space has a strong background, with the cash-rich but not super-rich casino workers who all need somewhere to live.

A recent Deutsche Bank report has claimed that the casino industry alone needs another 113,000 workers to come to the city for the new resorts that are already under construction, and all of these people need somewhere to live. While a croupier or a cocktail waitress cannot afford to buy a million-Dollar penthouse in the best buildings, they can comfortably clear $100,000 per year and want to live in some kind of luxurious comfort, so they often look for high-quality rentals. On top of the casino jobs created, it is estimated that each new hotel room results in three and a half new jobs in the service industries of the Strip and its environs.

Furthermore, hotel occupancy at weekends runs at over 95 per cent in the current hotels, so there is a real opportunity to make money by buying into one of the condo-hotels developments in the city. This is where investors buy a hotel suite and lease it back to the hotel where it is located for a share of the room rate and a certain amount of personal use per year. The real attraction of this is that the marketing and management of the property are left to the hotel group running the development.

Prices for luxury condos start at around £275,000, and with Dollar currently weak against Sterling and annual capital growth of up to 15 per cent since 1998 the attraction for investors are clear.

Local life

Las Vegas is possibly the world’s only 24-hour city, and many visitors find it difficult to gauge time accurately due to a total lack of natural light, few clocks in sight and casino complexes designed to keep people in, rather than speed their path through them. Hotels are often so big that many residents get lost on their way to their rooms.

Conclusion

While buying a property in Las Vegas may sound like a sexy and exciting idea, it is important to examine your motives. This is a destination that is almost perfect in many respects for a certain type of investor, but you have to be prepared not to be able to use you property whenever you want. Las Vegas is the world’s second largest tourist destination and the most popular route for Virgin Atlantic, but it is important if buying there to keep a close watch over the world markets to make sure you a protected from exposure should world economies experience a downturn. The advantage that Las Vegas has over many other destinations is that it is globally popular, not relying exclusively on one or two countries for survival.