Institutional investors should consider allocating some resources to purchase and hold leased single family homes. In this low-yeild, high-volatility investing environment, this may represent a great opportunity.

  One of the reasons that we believe Las Vegas is a good place to acquire properties for a long-term hold is based on fundamental measures such as price-rent ratios and the level of pricing below the longer-term, pre-bubble trend. Currently the price-rent ratio is about 6. In addition, it is often less expensive to buy than it is to rent. Similarly, cap rates are elevated implying an undervalued situation or investor sentiment. I tend to think it is still undervalued even though it is oversupplied. We are sta... read more

Long ago we had taken note of the frothy Aussie housing market and noted some parallels between what has been occuring there and what we experienced in the United States. One of these was the "housing shortage" will keep prices up statement. While real estate is a market with a lot of friction, shortages should'nt last long unless municipalities artificially restrict supply through zoning. Bloomberg talks about the home-shortage myth today: http://www.bloomberg.com/news/2011-09-11/housing-bears-say-sh... read more

Jeremy Warner, writing in the UK Telegraph, presents an interesting chart showing price-income ratios for various Chinese cities as well as a sample of other nations. Beijing and Shanghai look particularly scary. Income growth is really going to have to keep going up at a fast pace or this is likely to be a problem. Chinese authorities are aware of this but it is difficult to forecast what happens in a slowdown. Transaction volume is beginning to slow. By comparison, U.S housing, while it could still be overvalu... read more

Some short bullet points on recent news: - Slot machine revenues have increased for three months. Reported gaming revenue in May showed a year-over-year increase (although baccarat accounted for much of this). -CNN Money ranked Las Vegas as a top city to purchase rental properties. Noting our obvious bias, we do agree with their assessment based on the strong rates of return we have been observing in the market and by our own clients.            ... read more