Utah Real Estate Market

13 Replies

I'm currently renting out a condo in Utah around the Ogden area.  I cash flow pretty good, however, I also bought it in the market down turn about 5 years ago.  I'm now looking for my second property to invest in, but the market looks very strong right now.  

My question is... Is there anyone from Utah currently that is having any luck finding cash flow in our current market.  Housing seems way too high right now for the 1 or 2 % rule and if I'm flipping it's not even close to the 70% rule (from what I can see anyway).  

I'll admit, I'm no expert.  So what is everyone else's experience as of late?

Hi Korey, 

I moved from Utah to CO, a few years ago.  I was just back there a few weeks ago.

My daughter transferred to the Y this summer.  I was thinking maybe I could find an apartment for her to live in, and we could use it as a rental.

I found the prices to be really inflated.  I was unable to find anything near 1%.

Good luck with the search.  I would love to hear if you find something.

-MT

Mike,

I'll let you know if I do.. I was just looking in that area the other day and yes, it seems to be pretty inflated all around me. 

there are places in ogden that meet the 1% rule

Welcome to Bigger Pockets Korey! 

Utah real estate is hot in a lot of markets, but 1% rule deals are littered throughout Ogden. I'm on a couple of wholesalers lists and see 2% rule multifamily deals in Ogden every couple of months. 

Even in the more conservative markets like Logan you can get the 1% rule if you wait and source the property properly. Even though there are a lot of properties on the market that are not priced at 1%, the deals are out there. 

If you're looking to reposition your portfolio, it might not be a bad time to sell the condo. Might want to look at what kind of cash flow you're getting from that as well.

@Korey Moore  @Mike Thomas

I live near the Y and have seen my fair share of deals around here.  I wouldn't go as far to say it's inflated (that would imply that prices were at one point reasonable, which they probably were in the 70's, but since the mid 80's this area has been pretty expensive to buy while rents have kinda sucked).  

Also, the argument has been made here on the forums that the "1% rule" is geographic - it applies in some areas, in others it is more of a guideline, and 1% just isn't common here without some intense amounts of luck.  Here in Provo you'll be extremely lucky to get that 1% rule. 

@Mike Thomas

You may be right, I don't know too much about Provo area, actually I don't know much about anything south of Layton. Do you know much about Ogden market right now? Currently I've got a property that is getting over the 1% rule and another property for sale in my area right now would probably get it as well. But, that property is located on a HOA which I'm kinda tired of at the moment. What's your take on single family dwellings in Ogden?

This is all northern Utah feedback. Anyone have any input on St George? 

Thanks for original post.

@Blair Poelman is right.  Hard to use a standard rule of thumb in specific markets.  Student housing should be compared to student housing and not so much to more traditional real estate.  The thought is that student housing is less cyclical and more steady as there's always kids going to college.  As for Ogden, stay patient there are deals out there.  

I think that you should differentiate grad students and undergrads when talking about student housing.  They are polar opposites.

Undergrads:

  • These are teenagers
  • First time living on their own
  • Rent by the term
  • Summer vacancies
  • Shared living spaces leading to personality conflicts
  • Read: Management nightmare

Grad students:

  • Adults
  • The camp/party mentality is out of their system
  • 80+ hours/week educational obligations
  • Prefer their own unit
  • Multi-year leases including summers

Undergrad student housing can be very profitable if you do it right, but make sure you know what you're getting into from a management perspective and that you have a solution for high summer vacancy rates.

@Bud Leiser

I think St George is completely overpriced right now. I've been looking there for several months and haven't been able to find anything that makes sense (whether SFR or MFR) except maybe some very old properties in the Hurricane area that need a lot of rehab. I've been looking at Cedar City which is slightly better, ie I can see more often things that "almost" make sense...

Jean

Originally posted by @Jean G. :

@Bud Leiser

I think St George is completely overpriced right now. I've been looking there for several months and haven't been able to find anything that makes sense (whether SFR or MFR) except maybe some very old properties in the Hurricane area that need a lot of rehab. I've been looking at Cedar City which is slightly better, ie I can see more often things that "almost" make sense...

Jean

 Cool thanks for the tip. I guess there's too many Las Vegans pouring money into South Utah so the Utahns know less than we do? ;)

@Bud Leiser and anyone else looking in St. George:

I may have a deal coming up there soon. It is a larger newer SFH in good shape. Send me a PM if that is something you might be interested in.

I am a Realtor in the SL area. I have a few clients looking for good rentals and prices do seem inflated. I've been able to find good returns on mulit-family units. It seems like there is just so much demand for single family/owner occupied units that its inflating values. Whereas the MF stuff has less competing buyers. 

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