Salt Lake City, UT · Member since 2017 · 28 posts · 9 votes
What's everyone seeing as their rent to purchase price ratio in Utah. I am seeing anywhere from .7-1% purchase price to rent ratio. All the ones that are 1% are completely run done and will need quite a bit of work. I am looking all over the state of Utah but have been primarily looking in the Ogden, Roy, and Layton areas because of how much cheaper it is to buy in those areas.
I did a walk through of a duplex yesterday and it is nice and has been recently remodeled but the cost to rent ratio is around .85%.
Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes
9y
Off the shelf rentals in anything close to decent condition aren't hitting the 1% rule anywhere in Utah including Ogden.
The way we're doing it is by purchasing physically distressed properties and rehabbing them. This works out pretty well because we wind up with newly remodeled properties that are topping 1%. But this method doesn't really count, because we are forcing equity and acquisition cost (even after rehab) does not equal market value.
Of course, in Ogden there are plenty of pieces of junk that will do much better on the rent/value ratio. But those tend to be imaginary rents to marginal tenants with lots of ongoing maintenance. So your NOI is not particularly better than the much lower rent to value ratios, but the headaches much higher.
Interestingly, I'm doing about as well with my inexpensive single families as my duplexes in Ogden in terms of rent to value.
Rental Property Investor · Lehi, UT · Member since 2015 · 195 posts · 133 votes
9y
@Craig J Chelette@Sam Mueller Our Utah county units are only cashflowing because we bought a few years back. The Orem duplex would sell for between $260,000 to $280,000 and rents for $900 per side. That would put it between .65% to .7%.
Our Vernal duplex, we just bought for $165,000 when you include some needed repairs. Rents for $700 per side so that's about .85% which is why we have been looking further away from home. It has been more expensive to manage though.
Salt Lake City, UT · Member since 2017 · 28 posts · 9 votes
9y
Rebecca Belnap are the units cash flowing? Where else are you looking? I wouldn't mind investing in a better market I just feel like my first should be close to home even though I know it doesn't have to be.
Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes
9y
Off the shelf rentals in anything close to decent condition aren't hitting the 1% rule anywhere in Utah including Ogden.
The way we're doing it is by purchasing physically distressed properties and rehabbing them. This works out pretty well because we wind up with newly remodeled properties that are topping 1%. But this method doesn't really count, because we are forcing equity and acquisition cost (even after rehab) does not equal market value.
Of course, in Ogden there are plenty of pieces of junk that will do much better on the rent/value ratio. But those tend to be imaginary rents to marginal tenants with lots of ongoing maintenance. So your NOI is not particularly better than the much lower rent to value ratios, but the headaches much higher.
Interestingly, I'm doing about as well with my inexpensive single families as my duplexes in Ogden in terms of rent to value.