I live in California, I recently visited Salt lake city, UT and was amazed to see how SLC has so much of housing & infra development going on. Is this a bubble or economy is growing in Utah?
I'm looking for SFH/Townhouse investments for both rental and future appreciation.
a. Would like to know if people would generally prefer renting SFH or Town house
b. Potential for good property appreciation & rentals in locations (closer to Lehi,UT seems like silicon valley of Utah ?? ) : like areas around Bluffdale, Riverton seems desirable to families.
c. Is it good to buy a townhouse in Lehi and expect a good rate of return as well as good rental compared to other areas ? Please suggest.
Also Please suggest good Property managers who are good to work with. Also how much would be a typical % fee for PMs.
Hi @Vinoth Amar
I grew up on the east side of San Jose (by Milpitas) but after meandering all over the USA, I have landed in Salt Lake. I'd love to help you invest here. (I do miss home!)
I think the next table answers your first question. This is NO BUBBLE in Salt Lake. We are #1 in the entire nation for job growth.
As you might have guessed, with stellar growth, the margins for investment properties are shrinking. The rents are not going up as fast as the property is appreciating.
Nevertheless, good deals are all around, especially if you find them yourself OFF market. But as a Realtor, I love to find that needle in the haystack for my clients. And I never hesitate to speak up if I would not want a deal myself. Whoever you decide to use to help you in your quest must be a straight shooter. There is too much at stake.
a. The debate between SFR and TH is ongoing. Both sides have valid points, and both work as investments. I work for Keyrenter Salt Lake Realty & Property Management, and most of our clients have SFR's. Some love the exterior maintenance the HOA provides for TH's, but of course, this is balanced out by the HOA fees. And those who live in SFR's seem to stay longer than those who are sharing walls or ceilings with other humans who party, fight, or stomp around in the middle of the night - just because! There are lots of things to consider for sure.
b, c. ALL areas are going gangbusters right now. Areas with affordable housing have almost doubled since the bottom in July of 2012. The areas you mentioned are great, but it is important to remember that you are balancing RENTS with the purchase price and mortgage. I can send you a list of what I think are some of the best rentals out there.
There are lots of great PM's out there, but I am partial to Keyrenter Salt Lake. They not only do a great job, but I joined them partially because they are the owners of the national Keyrenter franchise and have close to 25 offices now. This means they are constantly seeking to improve systems. I like that. The fee scales for most PMs, and KeyRenter is very competitive, between 8 and 10%.
Please message me privately to continue the conversation.
Hello Vinoth. Our growth here is based upon a legitimate job boom, and a high birth rate so there is no bad debt bubble in this state. I specialize in investment properties in the Silicon Slopes area (around Lehi).
a. Townhomes are much more popular as rental here than SFH. They are also simpler to manage.
b. HERRIMAN Utah. The Rosecrest area (housing explosion) is South of Herriman Town Center and so it's only 10 minutes to Lehi. There are some fantastic 3BR townhomes being built there that we can upgrade to 4BR for only $5k. This vastly improves the cap rate.
c. Again, Herriman UT. For sure.
Myself and my clients recently closed on 3 of these Herriman units and all were leased with income before the first mortgage payment was due. I manage them for my out of state clients for 7% of gross, plus $200 per lease-up.
How is the Provo-Orem and Ogden-Clearfield area. Do they have potential for appreciation in the next 2-3 years ? rentals ?
Downtown Ogden is getting a lot of redevelopment. There are a bunch of new apt complexes in the downtown area.
@Vinoth Amar I think a lot of your questions have been answered but I wanted to add a few things.
Rent rates are higher in Salt Lake County than Utah County.
Orem/ Provo are great areas but they are running out of land to build. I had a meeting with the Orem city planner and he said that all of their growth is from going up as they have very little land left to develop. Where Lehi still has a ton of land left.
Eagle Mountain (city centers) I think is going to be a nice hot spot in the next few years. Facebook has purchased land to build a data center there. As part of this, they are building millions of dollars of infrastructure to support the area out there.
@Becca Summers that's really exciting info about FB and Eagle Mountain. And I like how you said "growth is from going UP" down in Orem/Provo. I have always wondered what we do in these boxed-in counties since the birth-rate and in-migration is probably not slowing anytime soon. I have thought about draining half or all of Utah Lake, but that idea didn't go over too well with my wife, and I am sure that the Saratoga Springs lakefront dwellers would string me up.
@Steve Theobald yes my clients who just spent $600k on a lakefront home would be upset. Did you see the company wanting to build an island in the middle of the lake connecting Saratoga to Provo.
Also, Did you just see the announcement of Olympia out by Herriman. It's kind of exciting to have a "new" city staring soon. I'm sure many are upset about it but we need it.
@Becca Summers Love the island idea. But how could a bridge or road not interfere with boating? Hmmmm. Congrats on the $600k sale!!
@Steve Theobald here is the link on the bridge plan. or just google it. https://www.ksl.com/?nid=148&sid=46233716
That is a really cool idea! That article says it could house up to 500,000 people! That area is going to need it at the rate it is growing!
I’m thrilled by the amount of discussion on this. I’ve had a chance to drive to Eagle Mountain the other day and do see a massive activity going on that can promise a great upside. I’m a new investor deploying a strategy of buy and hold and would love to get to know more people out there in SLC/Utah County to learn more about the market and find the right lead for my future portfolio. I’m looking for investor friendly agents as well as a number of other specialists such as contractors, project managers etc. Please kindly contact me and we lopve to discuss more.
What is the rental market like in SLC? Can a buy and hold investor get a 3/2 sfh off mls and at a minimum break even?
Love the chatter, we have a duplex in Orem. Little tid bit, if you can get rentals close to UVU they are amazing! UVU is the fastest growing university in Utah and it is BOOMING. Rental rates in Provo/Orem for smaller places are currently surpassing SLC.
This is a great thread! What kind of infrastructure is in the pipeline to help traffic flow out of Eagle Mountain? With the FB data center moving they have to do something to make it easier to get in and out.
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@Tina Huffman Utah is landlord friendly. Some cities require you to keep the home registered as a rental but that's about it. The rules are pretty easy you can evict and it's 15 days notice on move out with the month to month contracts. No change in taxes on rental vs not. One property I own the taxes went down the year after I bought it compared to the previous owner.
@Tina Huffman , Becca has good info as always. Even though my broker is a property manager, I don't get into the nitty gritty of landlording (I just help investors find good deals). I know that you need to take a "good landlord" class with some cities, and I recommend reviewing the UAA - Utah Apartment Association website for more info: Utah Apartment Association.
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