Am I Making A Smart Investment?

Question

Hello BP community. This is my first post and wanted to reach out for some advice.

I'm moving to the Salt Lake City (SLC) area and looking to buy a home (2607 S Highland Dr, Salt Lake City, Utah 3bdr 2bt for $349,900). First off, this market is crazy fast. This will be my 4th home purchased and I've never seen anything like this. I know I will be in SLC for no more than 3 years and will need to sell or rent. Running the numbers looks like I'll need to rent it for $2,350 for any cash flow ($20). Its a nice home but I'm not sure it can rent for that much. I will be doing a no money down VA loan but not sure if 5% property value increase per year will be sufficient given only 3 years. It is in a great area (near Sugar House) but just not sure about this.

Hopefully I provided enough information for some advice. Please let me know if there are any other questions. Thanks in advance for any insight people can provide

- Garrett

Garrett Canter · Answer

Thanks Walter for the your response and your service.

I know appreciation is a terrible thing to bank on; guess I needed to hear it again. I'll check out that website and calling property managers is a great idea.

Thanks

Walter Key · Answer

Garrett, I'm assuming that you're military given the 3 year time frame and the VA loan. If so, thanks! As a fellow military member, I know and appreciate your service.

For a quick snapshot of rental potential, you can plug the address into rentometer.cm and get an idea for the market rents around your property. For a more accurate idea, call around to a couple property managers in that area and ask them for numbers.

Either way, if you can't rent it out the day after you buy it for positive cash flow, you may need to consider your deal. DO NOT count on the hope of decent appreciation forcing the market rents up between now and 3 years from now. That's a recipe for disaster. Best of luck to you.

Joshua D. · Answer

@Garrett Canter

Have you tried looking in different neighborhoods too see what is available?