Should I Sell My Vacant Second Home in Las Vegas or Henderson?

By Mike Tchobanian, Broker and Owner, Vegas Capital Realty | The Tchobanian Group | Certified Probate Expert (CPE) | Certified Divorce Real Estate Expert (CDRE)

Call or Text Mike at 702-530-5844

Or find out what your vacant Las Vegas home could sell for.

Many people buy a place in Las Vegas or Henderson for winters, weekends or retirement someday. Then life gets busy. The visits get shorter and further apart, and the house sits empty while the bills keep coming. You worry about the AC in July, a leak nobody catches, or whether the HOA letter in your mailbox is a fine. If that sounds familiar, here are the five questions I walk through with every second home owner.

1. Is keeping my vacant Las Vegas home still worth it?

These are the five signs I see most often that it may be time to sell:

1. You rarely use it. If you visit a few weeks a year, you may be paying for twelve months to use one.
2. The holding costs keep climbing. Insurance, HOA dues, utilities and upkeep add up every month, whether you are there or not.
3. A big repair is coming. A roof, AC system, water heater or pool equipment is near the end of its life, and you don't want to put more money in.
4. Managing it from far away is stressful. Checking on the house, meeting vendors and handling problems from another state wears on people.
5. Your plans or time frame changed. You are not moving to Las Vegas after all, you are close to retirement and want the cash, or the equity could work harder somewhere else.

If two or three of these fit, it is worth sitting down and running the numbers.

2. How much is my empty house actually costing me?

An empty house is not free to own. These costs continue every month:

• Property tax. Nevada limits how much your property tax bill can go up from one year to the next. In Clark County, that cap is 3% for the one home you designate as your primary residence and up to 8% for a home that is not owner occupied, like most second homes. So a second home's tax bill can rise faster (Clark County Assessor, tax abatement).
• Insurance. A second home or vacant home can cost more to insure, and some policies limit coverage when a house sits empty. Tell your insurance company it is a second home and whether it sits vacant, and ask whether you need a vacancy endorsement.
• HOA dues. They never stop, and unpaid assessments can become a lien on the property under Nevada law (NRS 116.3116). Make sure violation notices reach you, not just the mailbox at the house.
• Utilities and upkeep. Power for the AC, water, landscaping, pool service, pest control and someone to check on the house.
• Repairs. Things still wear out in an empty house, and small problems grow when nobody is there to catch them.

A hypothetical example

The numbers below are hypothetical, for illustration only. They are not market data or a quote. Your actual costs will be different.

Say you own a $450,000 home in Henderson with no mortgage, and it sits empty most of the year:

That is before any mortgage payment. The first five lines, about $9,920 a year, are expenses you would actually pay. The $4,500 maintenance reserve is money to set aside for repairs, which you may not spend every year, but over time an empty house will need it.

There is also a cost you don't see on a bill. Opportunity cost is not a cash expense. It is what your money could be doing if it were not tied up in the house. If that $450,000 of equity earned a hypothetical 4% a year somewhere else, that would be about $18,000 a year. The 4% is only an example, not a prediction or a recommendation, and a real comparison should subtract selling costs and taxes from your equity and consider the risk of any investment. If you use the house two or three weeks a year, each visit is costing you a lot.

Want real numbers for your house? Find out what your vacant Las Vegas home could sell for and I'll show you what you would walk away with after selling costs.

3. Should I keep it, rent it or sell it?

Sometimes selling isn't the best option, and sometimes renting isn't either. We also manage rentals, so we can help you compare the rent you would likely collect, minus management and expenses, against what you would net from a sale, with real numbers for both.

4. What should I think about before deciding to sell?

The desert is hard on an empty house

Whether you keep it a while longer or get it ready to sell, a few things I tell every second home owner: don't turn the AC off in summer, set it higher instead, and have it serviced before the heat arrives. Watch for leaks, because our hard water is tough on water heaters and supply lines, and a small leak in an empty house can run for weeks. Check the irrigation, keep the pool running, and have someone local walk through the house regularly and after monsoon storms.

Taxes

Taxes on a second home sale depend on your situation, so talk with your CPA before you sell. The federal home sale exclusion of up to $250,000 of gain, or $500,000 for many married couples, generally applies only to your main home, so a second home usually does not qualify (IRS Publication 523). Selling a second home at a gain may create a federal capital gains tax obligation, and the amount depends on your adjusted cost basis, selling expenses, ownership history and whether you ever rented it (IRS Topic 409). Nevada has no state income tax, but your home state may tax the gain.

Sell as is or make a few repairs?

You don't have to remodel a second home to sell it. A deep clean, yard cleanup and fixing anything unsafe are almost always worth it. Paint, carpet and small fixes are sometimes worth it, when the numbers support it. Major remodels are not always worth it, so I compare the likely increase in sale price against the cost, time and risk before recommending them. Selling as is means you are not making repairs, not that you hide problems. Nevada sellers generally must complete a seller's real property disclosure form about known conditions (NRS 113.130), and buyers can still inspect. If the house needs a lot of work, a cash offer is another option. Compare it to the market first: cash offer or list with a Realtor in Las Vegas.

If you live outside Nevada

Most second home owners don't live here, and most don't need to travel to sell. I walk the house and send you photos and video, coordinate cleaning, repairs and vendors locally, and handle the listing, showings and offers while you follow along by phone, text or email. Listing and contract documents are usually signed electronically, and the title company will tell you your closing options, which often include a mobile notary near you. Every transaction is different, so the title company confirms what your closing requires. The full step by step process is in how do I sell my Las Vegas house if I live in another state and our out of state seller services.

5. How much could I walk away with if I sold today?

This is the number that settles most keep or sell debates. It is not the price you see on an online estimate. It is the likely sale price based on recent sales and the real condition of your house, minus your loan payoff, selling costs, and anything the house needs before listing. Then it goes next to the rent you would likely collect if you kept it, so you can see both paths side by side.

I put that on one page for you: a written opinion of value, an estimated net sheet, and a rental estimate if you are considering keeping it. Take it to your CPA, and you have everything you need to decide. More on selling costs here: what does it cost to sell a house in Las Vegas?

Frequently asked questions

Should I sell my second home in Las Vegas?

If it sits empty most of the year and the holding costs outweigh how much you use it, selling or renting it often makes more sense. Compare your real costs, your use and what the equity could do elsewhere.

How much does it cost to keep a vacant house in Las Vegas?

It depends on the house. Plan for property tax, insurance, HOA dues, utilities, upkeep and repairs, plus any mortgage. In our hypothetical $450,000 example with no mortgage, that came to about $1,200 a month.

Is property tax higher on a second home in Clark County?

The tax bill on a second home can rise faster. The abatement cap is 3% for your one primary residence and up to 8% for homes that are not owner occupied.

Do I pay capital gains tax when I sell a second home?

Selling a second home at a gain may create a federal capital gains tax obligation. The amount depends on your adjusted cost basis, selling expenses, ownership history and tax situation. Ask your CPA for an estimate before listing.

Can I sell my Las Vegas vacation home without flying in?

Usually yes. Most documents can be signed electronically, and the title company will tell you your closing options, which often include a mobile notary.

Can I rent my second home instead of selling?

Often, if the rent covers your costs. Check your HOA rules first. Short term rentals can also require a local license or permit, so HOA approval alone may not be enough. A property manager can handle tenants and repairs for a fee.

Does my insurance cover a vacant house?

It depends on your policy. Some policies limit coverage after a house sits empty for a period of time. Call your insurance company and ask.

Find out what your vacant Las Vegas home could sell for

Not sure whether to keep, rent or sell your Las Vegas home? I'll help you compare the estimated rental income, your annual holding costs, the current market value, and what you could walk away with if you sold, even if the right answer is to keep it. I'll also coordinate the work locally so you don't have to manage it from out of state.

Call or Text Mike at 702-530-5844

Or request a free property value estimate.

Mike Tchobanian is a licensed real estate broker, not a CPA, attorney, insurance agent or financial advisor. This article is general information and not tax, legal, insurance or financial advice. The cost example is hypothetical. Talk with your CPA about taxes and your insurance agent about coverage before you decide.

Related: What does it cost to sell a house in Las Vegas? | Should I sell my rental vacant or with the tenant? | Tired of being a landlord? | Selling from another state

Sources: Clark County Assessor, tax abatement | NRS 116.3116, HOA liens | NRS 113.130, seller disclosures | IRS Publication 523 | IRS Topic 409