Modeling ROI at Veer After HOA Dues

HOA dues at a luxury high‑rise can make or break your returns. If you are eyeing a condo at Veer, the right model will show you the full picture, from cap rate to cash‑on‑cash, after those monthly dues and every other recurring cost. You want clarity before you write an offer, not surprises after closing. In this guide, you will learn a clean, spreadsheet‑ready way to include HOA dues, taxes, insurance, management and reserves so you can trust your numbers. Let’s dive in.

Why HOA dues matter at Veer

In amenity‑rich high‑rises across Las Vegas, HOA dues often include staffing, security, common area utilities, and building insurance. These benefits support the lifestyle you want, but they also reduce net operating income. In this asset class, dues can be meaningfully higher than a typical suburban HOA.

Typical ranges in the Las Vegas area vary by product and amenities. For condos with full services, you often see HOA dues in the higher band compared to small townhomes or master‑planned single‑family communities. Always confirm what the dues include, how they are billed, and whether there are upcoming assessments.

A practical red flag is when HOA dues start to approach a large share of monthly rent. If dues eat up a notable percent of the gross rent, your cap rate and cash flow will be very sensitive to small changes in rent, vacancy or interest rates. Modeling that sensitivity up front will help you set the right price and expectations.

The ROI model you need

Here are the core metrics and how to calculate them. Build these once, then customize the inputs for your specific Veer unit and financing.

• Potential Gross Rent (PGR): total annual rent if fully leased.
• Effective Gross Income (EGI): PGR multiplied by 1 minus your vacancy rate, plus other income.
• Operating Expenses: recurring non‑debt costs like HOA dues, taxes, insurance, management, repairs, reserves and any owner‑paid utilities.
• Net Operating Income (NOI): EGI minus Operating Expenses.
• Cap Rate: NOI divided by purchase price.
• Annual Debt Service: total principal and interest payments for the year.
• Cash Flow Before Tax: NOI minus Annual Debt Service.
• Cash‑on‑Cash Return: Cash Flow Before Tax divided by total cash invested.
• Break‑even Rent: the monthly gross rent required to cover operating expenses, reserves and debt service after allowing for vacancy.

Two key reminders:

• Treat HOA dues as an operating expense, just like taxes and insurance.
• Model vacancy as a reduction to income rather than an expense line.

Build your Veer‑ready spreadsheet

Set up your sheet in four blocks: Inputs, Operating Calculations, Financing, and Outputs. Keep amounts annual unless noted.

Inputs to collect

• Purchase price.
• Down payment percent, closing costs and any initial repairs.
• Loan amount, interest rate, and amortization years.
• Market monthly rent per unit and any other monthly income.
• Vacancy rate. A practical long‑term default for Las Vegas is 5 to 10 percent. Use comps to refine.
• Monthly HOA dues and billing frequency. Confirm if they include water, trash, common utilities, insurance, reserves or amenities.
• Annual property taxes. Use the assessor’s values and local levy rates or last year’s bill.
• Annual insurance. For condos, the HOA master policy often covers the structure. You insure the interior and liability with an HO‑6 or landlord policy.
• Property management percent of collected rent.
• Maintenance reserve percent of gross rent.
• Capital expenditure reserve percent of gross rent.
• Owner‑paid utilities and any known special assessments.

Operating calculations

• PGR = Monthly Rent × 12.
• EGI = PGR × (1 − Vacancy Rate) + Other Income.
• HOA = Monthly HOA × 12.
• Management Fee = EGI × Management Percent.
• Maintenance Reserve = PGR × Maintenance Percent.
• CapEx Reserve = PGR × CapEx Percent.
• Property Taxes = Assessed Value × Tax Rate or use tax bill.
• Total Operating Expenses = HOA + Taxes + Insurance + Management + Maintenance + CapEx + Owner‑Paid Utilities + Other Expenses.
• NOI = EGI − Total Operating Expenses.

Financing block

• Loan amount, interest rate and term.
• Monthly mortgage payment from a standard amortization function, then ×12 for Annual Debt Service.
• Cash invested = Down Payment + Closing Costs + Initial Repairs.

Outputs to review

• Cap Rate = NOI ÷ Purchase Price.
• Cash Flow Before Tax = NOI − Annual Debt Service.
• Cash‑on‑Cash Return = Cash Flow Before Tax ÷ Cash Invested.
• Break‑even Monthly Rent = (Annual Debt Service + Total Operating Expenses + Annual Reserves if separate) ÷ [12 × (1 − Vacancy Rate)].

An illustrative walk‑through

Use the example below to check your formulas. Replace every input with your Veer unit’s actual numbers, HOA documents and lending terms.

• Purchase price: 300,000 dollars
• Monthly rent: 1,800 dollars
• Vacancy: 7 percent
• Other income: 0 dollars
• HOA dues: 350 dollars per month in Scenario A, 700 dollars per month in Scenario B
• Annual property taxes: 2,400 dollars
• Annual insurance: 900 dollars
• Property management: 8 percent of collected rent
• Maintenance reserve: 7 percent of gross rent
• CapEx reserve: 3 percent of gross rent
• Financing: 20 percent down, loan 240,000 dollars at 5 percent, 30 years

Step 1. Income

• PGR = 1,800 × 12 = 21,600 dollars
• EGI = 21,600 × (1 − 0.07) = 20,088 dollars

Step 2. Operating expenses

• Management = 20,088 × 0.08 = 1,607 dollars
• Maintenance = 21,600 × 0.07 = 1,512 dollars
• CapEx = 21,600 × 0.03 = 648 dollars
• Taxes = 2,400 dollars
• Insurance = 900 dollars

Scenario A — HOA 350 dollars per month

• HOA = 4,200 dollars
• Total Operating Expenses = 4,200 + 2,400 + 900 + 1,607 + 1,512 + 648 = 11,267 dollars
• NOI = 20,088 − 11,267 = 8,821 dollars
• Cap Rate = 8,821 ÷ 300,000 = 2.94 percent

Scenario B — HOA 700 dollars per month

• HOA = 8,400 dollars
• Total Operating Expenses = 8,400 + 2,400 + 900 + 1,607 + 1,512 + 648 = 15,467 dollars
• NOI = 20,088 − 15,467 = 4,621 dollars
• Cap Rate = 4,621 ÷ 300,000 = 1.54 percent

Step 3. Financing and cash flow

• Annual Debt Service at 5 percent on 240,000 dollars over 30 years ≈ 15,460 dollars

Cash flow before tax

• Scenario A: 8,821 − 15,460 = −6,639 dollars
• Scenario B: 4,621 − 15,460 = −10,839 dollars

Break‑even monthly rent

• Scenario A: (15,460 + 11,267) ÷ [12 × 0.93] ≈ 2,395 dollars
• Scenario B: (15,460 + 15,467) ÷ [12 × 0.93] ≈ 2,773 dollars

What this shows

• Doubling HOA from 350 to 700 dollars per month reduces NOI by 4,200 dollars per year and pushes break‑even rent higher by roughly 380 dollars per month. In high‑rise buildings, HOA sensitivity is real, so you want accurate dues and inclusions from the HOA budget before you finalize an offer.

Veer‑specific checks before you buy

Use this due diligence checklist to ground your model in facts.

• HOA financials and budget. Request the current budget, recent financials and reserve study. Confirm exactly what dues include, how dues are billed, and any planned increases.
• Special assessments. Ask for written notices and board minutes. If a special assessment is approved, model it as a one‑time outflow or amortize it in your sheet.
• CC&Rs and rental rules. Some Nevada HOAs cap rentals or require minimum lease terms. Confirm the rules and any approval steps before you assume a lease‑up timeline.
• Delinquency and reserves. High delinquency can signal risk. Underfunded reserves can lead to future assessments, so include a contingency reserve in your model.
• Clark County property taxes. Pull the assessor’s values and levy rates or last tax bill. Verify whether any abatements or changes after purchase will affect the bill.
• Insurance scope. For condos, the master policy typically covers the structure. Get an HO‑6 or landlord policy quote for interiors and liability. Check lender and HOA requirements.
• Market rent comps. Use rent comps for the same building or immediate area. Verify expected time‑on‑market and seasonality for your lease‑up plan.
• Management fees and leasing costs. Confirm the percentage of collected rent and any separate leasing fees so your EGI and first‑year cash flow are realistic.

Sensitivity that belongs in your model

High‑rise ownership has a few big swing factors. Test them so you know your thresholds.

One‑way sensitivity

• Rent plus or minus 10 to 20 percent.
• HOA dues plus or minus 10 to 50 percent.
• Vacancy plus or minus 2 to 6 percentage points.
• Management fees plus or minus a few points.
• Insurance plus or minus 25 to 50 percent.

Two‑way sensitivity

• Rent vs HOA dues. See where cash flow turns positive and where cash‑on‑cash hits your target.
• Rent vs interest rate. Understand how rate moves change break‑even rent and cash flow.

Useful thresholds to compute

• Break‑even rent. Compare the break‑even result to realistic market rent in the building.
• Break‑even vacancy. At a given rent, what vacancy wipes out cash flow after debt service.
• HOA tolerance. How much the dues can rise before cash‑on‑cash reaches zero.

Short‑term rental considerations

Las Vegas and Clark County require registration or licensing for short‑term rentals. Many HOAs restrict or ban short‑term rentals in their CC&Rs. Never model STR income until you confirm written permission and all requirements.

If STR is allowed and you want to compare scenarios, add the following to your sheet:

• Monthly occupancy schedule to reflect seasonality.
• Higher management or booking fees, often 20 to 35 percent for STR managers.
• Transient lodging tax, cleaning, supplies and higher turnover maintenance.
• Higher insurance and compliance costs.

Putting it all together

When you include HOA dues, taxes, insurance, management and reserves the right way, your Veer model will tell a clean story. Cap rate shows property performance before financing. Cash‑on‑cash shows what your money is actually earning under your chosen loan and cash outlay. The break‑even rent tells you how close you are to a comfortable margin.

If you want a well‑built, Veer‑specific model with real HOA documents, rent comps and financing terms, we can help you assemble it quickly and quietly.

Ready to see your numbers with confidence? Connect with Michele and request a discreet ROI model tailored to your unit, timeline and goals. Start the conversation through Unknown Company.

FAQs

How do HOA dues impact Veer condo cap rate?

• HOA dues are an operating expense that reduce NOI, which lowers cap rate when purchase price is held constant. Higher dues require higher rent to keep the same cap rate.

What vacancy rate should I use when modeling a Veer rental?

• For long‑term rentals in Las Vegas, a practical default is 5 to 10 percent. Refine with recent comps in the same building and seasonality.

How do I estimate Clark County property taxes in my model?

• Use the assessor’s values and local levy rates or last year’s tax bill. Model annual taxes as Assessed Value multiplied by the Tax Rate, then verify any abatements or changes after purchase.

Can I count on short‑term rental income at a high‑rise like Veer?

• Many HOAs restrict or ban short‑term rentals in their CC&Rs. Confirm written permission and local licensing and lodging taxes before you model STR income.

What is a good cash‑on‑cash return target for Las Vegas condos?

• Investor targets vary. Many conservative investors look for 6 to 12 percent, but results depend on leverage, HOA dues, vacancy and risk tolerance. Compare to similar units in the same building.