Is Buying Property Near a Casino a Good Bet?
Should you gamble on a home near a casino?…
A house is probably the biggest single financial commitment that most people make in their lifetimes. So, when they do commit to a property, there are many questions that they need to ask themselves.
The first is whether the price is fair for the property and, more to the point, whether the appraiser is going to agree with the market price that the sellers and buyers have agreed upon. This is especially important if the buyer is using a mortgage. If the appraiser’s valuation comes in lower, they’re going to have to make up the shortfall themselves, possibly from savings.
The second is whether it is really in an area in which they can see themselves living. Does it have all the facilities that they need like stores, schools and transport links? And is it a peaceful place where they can quietly enjoy their lives?
The third consideration is whether that property is going to appreciate over time and how easy it might be to sell when the time comes to move on.
One type of building that can influence all three of these considerations is a casino complex. So, anyone thinking about buying in the vicinity of one needs to be aware of the effect that it may have.
There have been several studies on the economic effects of the arrival of a new casino in a region and these can all feed into a property’s desirability as well as the popularity of a particular area.
New casinos – Ask yourself if it will still be a good move in five years’ time.
Anyone thinking about buying property in an area where a new casino is under construction will have to think long and hard about it. This is partly because it’s very hard to predict exactly what the long-term effects will be, and any immediate effects can help to distort property prices in the area.
This is because the construction phase of any project is going to involve a large and temporary workforce heading into the area. Many will want to live near the site, at least for as long as it takes to build.
The increase in demand is likely to put pressure on the market, resulting in inflated prices that may well not be that long-lasting. So, it’s very possible that potential buyers intending to stay in an area for some time might find themselves having to buy at a price that has been inflated by temporary demand.
Another key consideration is the amount of disruption that is going to occur thanks to the construction. There’s going to be noise, dirt in the air and even the likelihood of travel disruption with streets closed off at times to allow for deliveries and other construction traffic, not a great introduction to a new area.
Of course, there’s also the question of whether there’s even a need for new casinos to be built in the first place. If you’re an avid gamer, living so close to a casino may seem ideal. However, online casinos are on the rise in the US, making land-based casinos a distinct second choice for many players. This means there’s no longer a need to travel to the casino floor when you can play all your favorite casino games at premium sites like 888 Casino, without having to leave the couch.
Existing casinos – Property prices hold firm in Vegas
Where a casino has already been built and is influencing your decision, there are a couple of factors to think about:
- How close is the property to the casino?
- What effect is this likely to have?
This is because, typically, casinos are late night businesses, so players are likely to be turning up and going home even into the small hours of the morning. With cars coming and going, noisy people celebrating their wins and other disturbances, it may not make for a very peaceful life.
On the plus side, casinos do undoubtedly bring some income and employment to the area. So, there is always going to be a likely group of people – employees of the casino – who will be looking for property in its vicinity. One example of this is Las Vegas, whose property market has always continued to rise compared with the rest of the country.
On the other hand, Atlantic City has shown that casinos are not always successful, with a number closing down in recent years. However, again this is likely to be a result of the rise of online casino sites.
Anyone with a property in an area where this has happened will find that it has an immediate detrimental effect on the area’s economy, making it a less desirable place to live and bringing down property prices at the same time.
Buy to rent?
One way to safeguard against the perils of buying a property in an area with a casino would be to have it as a rental property, for example on Airbnb. While the casino is thriving, there would be plenty of visitors wanting to stay and, if the casino were to fail, it would still be popular as a more long-term rental prospect for local people needing somewhere to live but without the finances to buy for themselves.
It’s important to remember, however, that the taxes charged on rental properties does mean that it’s an investment that might not start paying for itself for quite some time.
So, as to whether having a casino nearby would affect the market appraisal of a property, it’s open to debate.
By Benjamin Campbell. The author is a real estate agent and has over 10 years of experience in the Real Estate Market. He has worked for Savills and Oakville Real Estates in the UK. Ben relocated to the US and is in the process of starting his own real estate property management company.
As my county of practice (San Diego) has 9 casinos, what you are describing sounds like a typical Friday (more like a Sat. morning drive). A good rule of thumb, is that when you work those areas and take a visit, never come back with less than 50% of appraisal fee.
Seek the truth.
The initial response from market participants is that casinos adversely impact residential property values. The Live Casino in Hanover, Maryland and the MGM Casino in National Harbor, Maryland are two prime examples of this initial negative market response. Almost ten year since completion of the Live Casino and 3 years since completion of the MGM Casino there is no measurable negative impact related to the proximity of residential housing. In both cases these areas have developed into central hubs for small business, hotels and retail shops. As business diversity grows so do opportunities for employment, which leads to increased demand for residential housing.
I had a friend who lived close to the casinos, Her neighbor, over the fence was the CHIEF, one of the privileged many who lived on the reservation.
In Central City / Blackhawk casino areas in Colorado mountain terrain, there are interesting changes which came along with casinos. The old ghost towns were revitalized, what had sat empty for decades was rejuvinated in short order. And then the corporations maximized land space and cut into the solid stone mountains to eliminate extreme sloping and and carve out miracle of engineering parking lots. There are several sad old tiny home whos front chain link fences used to simply front to a local road or hilly space. But now those same homes fronts to the very inch of the casino property line, to a 200 ft solid granite cliff drop off. Roads changed. Highway development occurred. Landscapes were altered. Eminent domain was used in some cases. Land values had no cohesion from previous times. Mineral rights were suddenly premium considerations. Casino influence is a market force to itself, it changes all the value types for everyone in the area, somehow and in some way. Some for the better, others for the worse. There is simply nothing else quite like the influence of a casino.