Jonathan and Drew Scott have two real estate shows on HGTV.
Jonathan and Drew Scott, HGTV’s real estate dynamic duo who live part-time and full-time in Las Vegas, respectively, are among the many big-time investors targeting Southern Nevada for foreclosed-upon homes.
The Vancouver natives have a knack for finding undervalued fixer-uppers and turning them into income-producing rentals for themselves and their clients, and suggest that those opportunities persist in Las Vegas for investors willing to do their homework.
On their HGTV show Property Brothers, the Scotts help couples find their dream homes and fix them up. A second show, Buying and Selling, premiered in August, on which the twin brothers help people buy a new home while selling their old one. The two started off by launching Scott Real Estate Inc. in Canada in 2004, after friends spurred them on due to their success of buying and renovating homes and flipping them for a profit. They looked south of the border after Jonathan moved to Las Vegas in 2008, as the housing market was collapsing, causing home prices to fall. Drew followed his brother here in 2010.
“We realized the market was hit down here,” Drew says. “It was a good opportunity to buy up properties with cash and hold onto them as rental properties.” They currently own six rental homes in Vegas, some more than 50 years old, which they bought for $25,000 to $33,000 in different areas and different styles, repaired, and are now producing a better return on their investment than the average property in North America. Last year, the brothers bought a 5,000-square-foot home seven minutes west of Mandalay Bay at a cost of $400,000. Such a home, Drew says, would be worth more than $2 million in Vancouver.
“It’s not a good idea to renovate them and flip them right away,” Drew says. “It’s better to hold out and rent them for now.”
Higher-priced homes sit on the market because the priciest end of the spectrum tends to be the last to recover. The demand right now is for properties in the mid to low price range; Jonathan says many investors continue to find value in homes at this price point in cities such as Las Vegas, even though they often have multiple offers for them.
Many banks continue to hold onto foreclosures rather than release them all on the market at once because they don’t want to negatively impact the growth of the housing market. Las Vegas remains a prime target to purchase properties because of the draw of the city’s entertainment, and once more jobs are being created, a more steady growth in prices will result. “Vegas was so hard hit that the prices continue to be lower than other areas that continue to create interest,” Drew says.
But for the opportunities that do exist, buyers must be conscious of their budget and consult a contractor rather than assess the price of a renovation on their own, to make sure they don’t overpay or purchase a home that requires too much in renovation expenses.
“There are plenty of opportunities to make bad investments,” Jonathan says. “So be smart and base it on the numbers, not emotion.” Property Brothers and Buying and Selling air Wednesdays at 8 pm and 9 pm on HGTV