In order to analyze investing in Signature at MGM Grand Condos, I made several assumptions that are not backed by any data, such as average rental days at MGM Grand. Although I have tried to get all the info that I could, until I finish a transaction at MGM Grand condos, I am sure that there are fees that I have not included in my article and issues that I have not discussed. But this analysis should give the investor some idea about investing at MGM Grand Signature condos.
This blog post is a stripped down version of my analysis for investing in MGM Grand condos, the full article with the numbers will be e-mailed to my investors today.
Investing in Signature at MGM Grand Condos as a value investment:
What an investor will buy at Signature at MGM Grand Residence Condo Towers is a world class, fully furnished condo hotel that is built right behind MGM Grand Casino. The land that these condominiums are built upon could sell for 20 million dollar plus per acre. The owner has access to all MGM Grand amenities such as their awesome pool in addition to the pools that belong to the tower and 10% discount from MGM Grand Spa and various restaurants. The owner has easy access to the Strip through the monorail.
One thing that separates Las Vegas high rise condominiums from most other areas is that condominiums such as MGM Grand were built to sell and originally sold for $800-$900 plus per square foot and the investor benefits from others miscalculation and misfortune.
It is my opinion and my opinion only that junior studios and one bedroom condos are excellent values for their current prices, regardless of cash flow. Where else can you find a condo such a MGM Grand Residence Tower to buy fully furnished for $120,000-$300,000? Only Las Vegas baby (say it like Elvis the King would, thank you very much) 
This blog is credible because I do not advertise for the seller, but if I like a product, I will not be shy to say so and at this moment I like MGM Grand condos because I believe they provide the investor with both a great value and a chance to make real cash flow. The investor should do his/her own due diligence and not rely on my blog post only.
Renting hotel condo units at Signature at MGM Grand, cash flow:
The Las Vegas real estate investor who was successful at buying a Signature at MGM Grand Condo Hotel can rent his/her condo in three ways.
1: Put the condominium in the MGM Grand Hotel pool. Totally easy for the investor, the investor enrolls his condo hotel (condotel) in the MGM Grand rental pool. The condo is put in queue and the first condo in line gets rented first and goes to the back of the line afterward. MGM Grand rental office could not tell me the average time that they rent one of the Signature condominiums per month due to the uncertain market.
But I will do an example just to look at some numbers. Please note that there is no proof that a condo at MGM Grand rents for this many days per month. The assumption is 15 days average rental period per month in order to run the numbers. If the condo is in the MGM Grand rental pool, MGM Grand takes 10% of the top and then takes 40% of the remainder with 60% going to the condo owner.
520 square foot studios rent for the following prices:
Regular week days= $129+ per night, weekends for $179+ per night and special weekends and days like New Year for $499/night.
I just assume the rates as the $129 and $179 per night, and assume three weekends a month and 9 days on week days for total 15 rental days per month. The total rental for the studio condo for 15 days is $2235.
One Bedroom condos rent for the following prices:
Regular week days= $179+ per night, weekends for $219+ per night and special weekends and days like New Year for $549/night. The total rent is $2925. The investor will be left with $1580 gross income.
Assuming that a condo rents three weekends per month (weekends are busy time for MGM Grand and nine week days a month for a total of 15 days a month, the investor may expect about $1200 gross income without taking account the special rental days. Needless to say if the vacancy is less than 15 days a month the return on the investment can be more, or less otherwise. If we deduct HOA fees and taxes, the owner could possibly expect 0-$500 profit per month.
Drawbacks: If the owner decides to use the condo himself/herself then there is $27-$40 cleaning and maintenance fee per night to MGM Grand that cannot be waived.
2: Not enroll and rent the condo in MGM Grand rental pool and rent the unit directly and long term:
There is not a lot of data available at this time since renting the condominiums long term and by owner is a new phenomenon at MGM Grand. 10 condos have been rented long term so far through the Las Vegas MLS. Most of the one bedroom condos has been rented for $1800-$2000 per month with a 1-4 and 3-6 month lease; days on the market or DOM for these units are 7-39 days.
If an owner doesn’t enroll in the MGM Grand program and wants to rent it himself, then he has to pay an extra $200 for a studio and $250 for a one bedroom unit to MGM Grand per month. Owner has to take care of cleaning the unit and supplying towels and sheets. There are companies that do that for the owner.
The owner could be left with about $300-$500 per month for a junior suite or studio suite and 0-500 for one bedroom condos.
3: Renting the condo short term by using internet:
This could be the most effective use of condominiums at MGM Grand. The owner uses internet to advertise their condos. Now the full power of owning a hotel condo can be harnessed. The owner could make 15%-25%+ cash on cash return on his /her investment. But the info about the numbers and how to do this is for my customers only, call me or e-mail me for the info.
As for waiting for more price reductions, I can’t tell you whether the prices will go down further or not, all I can say is that I believe MGM Grand condos are where Meridian used to be about 4 months ago. If there is rush on MGM Grand condos as there was and still is on the Meridian, then there will be no price reductions and prices will go up. The action on MGM Grand condos has picked up considerably in the last three months. Like I said, whether you want to wait or not is your call, but in my opinion, MGM Grand is a great value right now.
Analysis of investing in Signature at MGM Grand condos, a Las Vegas high rise condo hotel based on value and cash flow
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Related web-site pages: Investing in Las Vegas Real Estate, Las Vegas homes, luxury condos and commercial real estate for sale
My Name is Masoud and I am a Las Vegas Realtor, my contact info in the bottom of the left side bar.
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1 Investing in Signature at MGM Grand Residence condos, renting condominiums at Signature at MGM Grand Las Vegas, part two | Las Vegas Travel - Culture and Recreation // Sep 26, 2009 at 2:30 pm
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