Ultimate Salt Lake City Real Estate Investing Guide for 2024

The acronym BRRRR is an illustration of a long-term rental strategy — Buy, Rehab, Rent, Refinance, Repeat. This is a way to expand your investment portfolio rather than own a single income generating property. It is essential that you be able to receive a “cash-out” refinance loan for the strategy to be successful.

When you have concluded refurbishing the rental, its market value must be more than your complete purchase and renovation costs. After that, you withdraw the equity you produced out of the asset in a “cash-out” mortgage refinance. You buy your next property with the cash-out capital and start anew. This strategy assists you to reliably expand your portfolio and your investment revenue.

When an investor holds a significant number of investment properties, it makes sense to pay a property manager and designate a passive income stream. Discover one of real property management professionals in Salt Lake City UT with a review of our comprehensive directory.

Factors to Consider

Population Growth

Population increase or shrinking shows you if you can expect good returns from long-term investments. A growing population normally demonstrates active relocation which translates to new renters. Employers view such a region as an attractive place to relocate their enterprise, and for workers to relocate their households. A rising population creates a certain base of renters who can handle rent raises, and an active property seller’s market if you decide to unload any investment properties.

Property Taxes

Property taxes, ongoing maintenance expenses, and insurance specifically affect your profitability. Investment homes situated in high property tax locations will provide less desirable returns. High real estate tax rates may predict a fluctuating region where expenses can continue to expand and should be thought of as a warning.

Price to Rent Ratio

Price to rent ratio (p/r) is a market signal that tells you how much you can expect to demand as rent. An investor can not pay a steep amount for a property if they can only demand a modest rent not letting them to pay the investment off in a realistic time. You want to discover a low p/r to be comfortable that you can set your rents high enough to reach acceptable returns.

Median Gross Rents

Median gross rents demonstrate whether a city’s lease market is robust. You want to identify a market with regular median rent expansion. If rental rates are going down, you can eliminate that region from deliberation.

Median Population Age

Median population age in a good long-term investment market should mirror the typical worker’s age. If people are relocating into the district, the median age will have no challenge staying at the level of the workforce. If you discover a high median age, your supply of tenants is declining. That is an unacceptable long-term economic picture.

Employment Base Diversity

Accommodating different employers in the location makes the market not as unstable. When workers are employed by only several major companies, even a slight interruption in their operations might cost you a great deal of tenants and increase your exposure enormously.

Unemployment Rate

High unemployment means smaller amount of tenants and an unsteady housing market. Jobless people are no longer customers of yours and of other companies, which produces a domino effect throughout the region. Those who still have jobs can discover their hours and incomes cut. Even tenants who are employed may find it challenging to stay current with their rent.

Income Rates

Median household and per capita income will inform you if the renters that you prefer are living in the community. Increasing wages also tell you that rental prices can be increased throughout your ownership of the rental home.

Number of New Jobs Created

The more jobs are continually being produced in an area, the more dependable your renter source will be. A market that provides jobs also boosts the number of participants in the housing market. This ensures that you will be able to maintain a sufficient occupancy level and buy more properties.

School Ratings

The status of school districts has an important impact on home values across the area. When a company evaluates a market for possible expansion, they keep in mind that first-class education is a prerequisite for their employees. Moving companies relocate and attract potential tenants. Real estate values rise with additional workers who are homebuyers. Reputable schools are an essential component for a strong property investment market.

Property Appreciation Rates

Real estate appreciation rates are an indispensable component of your long-term investment strategy. You need to make sure that the chances of your investment going up in market worth in that area are strong. Small or declining property appreciation rates will eliminate a location from your choices.

A furnished apartment where tenants stay for less than 4 weeks is called a short-term rental. Long-term rental units, like apartments, impose lower payment per night than short-term rentals. With tenants fast turnaround, short-term rentals have to be repaired and sanitized on a constant basis.

Typical short-term tenants are backpackers, home sellers who are relocating, and people on a business trip who require a more homey place than a hotel room. Anyone can convert their home into a short-term rental with the assistance made available by online home-sharing sites like VRBO and AirBnB. This makes short-term rental strategy a feasible approach to endeavor residential property investing.

The short-term property rental venture includes dealing with tenants more frequently in comparison with annual lease properties. As a result, owners handle issues repeatedly. Think about covering yourself and your portfolio by joining one of attorneys specializing in real estate in Salt Lake City UT to your network of professionals.

Factors to Consider

Short-Term Rental Income

You must calculate how much rental income has to be produced to make your effort lucrative. A glance at a community’s recent average short-term rental prices will show you if that is a good community for your plan.

Median Property Prices

Carefully calculate the amount that you are able to pay for new investment properties. The median values of property will show you whether you can afford to invest in that market. You can calibrate your location survey by analyzing the median price in particular neighborhoods.

Price Per Square Foot

Price per square foot can be confusing when you are examining different units. A home with open entryways and vaulted ceilings can’t be compared with a traditional-style property with bigger floor space. You can use this metric to get a good general view of real estate values.

Short-Term Rental Occupancy Rate

The number of short-term rental units that are currently occupied in a city is crucial information for a rental unit buyer. When the majority of the rentals have few vacancies, that city requires new rental space. If investors in the market are having problems filling their current units, you will have trouble finding renters for yours.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return can tell you if the property is a wise use of your money. You can calculate the cash-on-cash return by determining your Net Operating Income (NOI) and dividing it by your cash investment. The answer is a percentage. The higher the percentage, the quicker your investment will be returned and you will start receiving profits. When you get financing for a portion of the investment budget and spend less of your money, you will receive a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

Average short-term rental capitalization (cap) rates are largely used by real estate investors to estimate the worth of rental properties. High cap rates indicate that rental units are accessible in that area for decent prices. Low cap rates reflect higher-priced properties. The cap rate is calculated by dividing the Net Operating Income (NOI) by the purchase price or market value. The percentage you will obtain is the property’s cap rate.

Local Attractions

Major public events and entertainment attractions will draw tourists who need short-term rental properties. This includes collegiate sporting events, kiddie sports competitions, colleges and universities, huge concert halls and arenas, carnivals, and amusement parks. At certain seasons, places with outside activities in mountainous areas, seaside locations, or along rivers and lakes will draw crowds of visitors who require short-term rental units.

The fix and flip approach requires purchasing a property that demands improvements or restoration, creating additional value by enhancing the building, and then liquidating it for its full market value. To be successful, the flipper has to pay less than the market value for the property and calculate the amount it will cost to repair the home.

It’s critical for you to figure out how much homes are going for in the region. Find a region that has a low average Days On Market (DOM) metric. As a “house flipper”, you’ll need to liquidate the renovated property without delay so you can eliminate carrying ongoing costs that will lessen your revenue.

To help distressed home sellers discover you, list your business in our directories of home cash buyers in Salt Lake City UT and property investment companies in Salt Lake City UT.

Also, team up with Salt Lake City bird dogs for real estate investors. Experts discovered here will assist you by immediately discovering conceivably successful ventures ahead of the projects being listed.

Factors to Consider

Median Home Price

Median real estate value data is a critical indicator for assessing a potential investment community. When prices are high, there may not be a reliable amount of run down houses in the location. This is a primary component of a fix and flip market.

When regional information signals a fast drop in real estate market values, this can indicate the availability of potential short sale homes. You will be notified about these opportunities by working with short sale processors in Salt Lake City UT. Discover how this happens by studying our article ⁠— What Is Involved in Buying a Short Sale Home?.

Property Appreciation Rate

The shifts in real estate values in a region are vital. Predictable surge in median prices demonstrates a strong investment environment. Unreliable market value changes aren’t beneficial, even if it is a significant and sudden growth. You could end up buying high and selling low in an hectic market.

Average Renovation Costs

Look carefully at the potential rehab expenses so you will understand if you can achieve your goals. The manner in which the municipality goes about approving your plans will have an effect on your venture as well. To make an accurate budget, you will have to know if your plans will be required to involve an architect or engineer.

Population Growth

Population information will show you whether there is a growing demand for real estate that you can provide. Flat or declining population growth is an indicator of a weak market with not enough purchasers to justify your effort.

Median Population Age

The median population age is a simple indication of the accessibility of ideal home purchasers. The median age should not be less or more than that of the typical worker. Workers can be the people who are potential homebuyers. The requirements of retired people will most likely not be a part of your investment project plans.

Unemployment Rate

If you see an area with a low unemployment rate, it’s a solid evidence of lucrative investment possibilities. The unemployment rate in a prospective investment region should be lower than the nation’s average. A positively reliable investment community will have an unemployment rate less than the state’s average. To be able to acquire your fixed up property, your potential buyers have to have a job, and their clients too.

Income Rates

Median household and per capita income amounts tell you whether you can find enough home purchasers in that area for your homes. The majority of people who purchase residential real estate have to have a home mortgage loan. Homebuyers’ ability to get approval for financing hinges on the level of their salaries. Median income can let you know if the regular homebuyer can buy the property you intend to offer. In particular, income growth is critical if you want to grow your investment business. When you want to augment the purchase price of your houses, you need to be sure that your home purchasers’ income is also going up.

Number of New Jobs Created

The number of jobs created yearly is valuable insight as you reflect on investing in a specific area. A larger number of people buy homes if their community’s financial market is generating jobs. Fresh jobs also draw people relocating to the area from another district, which further revitalizes the property market.

Hard Money Loan Rates

Real estate investors who work with renovated houses often use hard money loans instead of conventional loans. Hard money loans enable these investors to pull the trigger on current investment possibilities immediately. Review the best Salt Lake City hard money lenders and look at financiers’ charges.

People who are not well-versed regarding hard money financing can discover what they should understand with our detailed explanation for newbie investors — How Do Hard Money Loans Work?.

Wholesaling is a real estate investment approach that involves scouting out homes that are interesting to real estate investors and putting them under a sale and purchase agreement. When a real estate investor who wants the residential property is found, the contract is sold to the buyer for a fee. The seller sells the home to the investor instead of the wholesaler. The wholesaler doesn’t sell the property — they sell the rights to buy one.

The wholesaling form of investing includes the employment of a title insurance company that grasps wholesale deals and is knowledgeable about and engaged in double close transactions. Find title services for real estate investors in Salt Lake City UT on our website.

Discover more about how wholesaling works from our complete guide — Wholesale Real Estate Investing 101 for Beginners. When pursuing this investment strategy, place your firm in our directory of the best real estate wholesalers in Salt Lake City UT. That way your prospective audience will learn about your location and reach out to you.

Factors to Consider

Median Home Prices

Median home values are key to locating places where properties are selling in your real estate investors’ price point. A city that has a good supply of the reduced-value residential properties that your clients require will show a low median home purchase price.

A fast drop in property worth may be followed by a considerable selection of ‘underwater’ houses that short sale investors hunt for. Wholesaling short sale houses regularly brings a number of unique perks. Nevertheless, be aware of the legal challenges. Gather additional information on how to wholesale a short sale home with our complete guide. Once you have determined to try wholesaling short sale homes, be sure to engage someone on the directory of the best short sale lawyers in Salt Lake City UT and the best property foreclosure attorneys in Salt Lake City UT to assist you.

Property Appreciation Rate

Median home purchase price movements explain in clear detail the housing value picture. Real estate investors who need to liquidate their properties later, such as long-term rental landlords, need a region where real estate purchase prices are increasing. Both long- and short-term investors will stay away from a market where home purchase prices are dropping.

Population Growth

Population growth statistics are a contributing factor that your future real estate investors will be aware of. If the community is expanding, new residential units are needed. Real estate investors understand that this will combine both leasing and owner-occupied housing units. An area that has a declining community does not attract the investors you want to buy your contracts.

Median Population Age

A robust housing market needs people who are initially leasing, then transitioning into homeownership, and then moving up in the residential market. To allow this to happen, there needs to be a stable employment market of prospective tenants and homebuyers. When the median population age matches the age of wage-earning locals, it demonstrates a strong housing market.

Income Rates

The median household and per capita income display consistent improvement historically in places that are favorable for investment. If renters’ and homeowners’ wages are growing, they can keep up with soaring rental rates and real estate purchase costs. Investors avoid communities with poor population income growth statistics.

Unemployment Rate

Real estate investors will take into consideration the location’s unemployment rate. Renters in high unemployment areas have a difficult time making timely rent payments and a lot of them will stop making rent payments entirely. Long-term real estate investors who count on steady rental payments will lose money in these areas. High unemployment builds uncertainty that will stop people from buying a house. This is a concern for short-term investors buying wholesalers’ agreements to rehab and resell a house.

Number of New Jobs Created

The frequency of jobs produced annually is an important component of the housing structure. People settle in a city that has fresh job openings and they require housing. This is helpful for both short-term and long-term real estate investors whom you rely on to acquire your contracted properties.

Average Renovation Costs

Rehab expenses have a large influence on an investor’s profit. Short-term investors, like fix and flippers, can’t reach profitability when the purchase price and the renovation expenses total to more money than the After Repair Value (ARV) of the property. Look for lower average renovation costs.

Investing in mortgage notes (loans) is successful when the mortgage note can be acquired for less than the face value. The client makes remaining payments to the note investor who is now their current lender.

Performing loans are mortgage loans where the homeowner is always current on their payments. These loans are a steady generator of cash flow. Note investors also invest in non-performing mortgage notes that the investors either restructure to help the borrower or foreclose on to get the collateral below actual value.

At some point, you may grow a mortgage note collection and start needing time to manage it by yourself. At that stage, you may want to use our catalogue of Salt Lake City top loan portfolio servicing companies and reassign your notes as passive investments.

If you find that this plan is a good fit for you, place your company in our list of Salt Lake City top companies that buy mortgage notes. Being on our list sets you in front of lenders who make desirable investment opportunities accessible to note buyers such as you.

Factors to Consider

Foreclosure Rates

Low foreclosure rates are a signal that the area has opportunities for performing note investors. High rates might signal investment possibilities for non-performing note investors, but they should be cautious. If high foreclosure rates have caused an underperforming real estate market, it could be difficult to get rid of the collateral property after you foreclose on it.

Foreclosure Laws

Investors are required to understand the state’s regulations concerning foreclosure before buying notes. Are you dealing with a Deed of Trust or a mortgage? When using a mortgage, a court will have to allow a foreclosure. A Deed of Trust enables you to file a notice and continue to foreclosure.

Mortgage Interest Rates

Mortgage note investors inherit the interest rate of the mortgage loan notes that they acquire. This is an important component in the investment returns that you earn. Regardless of the type of mortgage note investor you are, the note’s interest rate will be important to your estimates.

Traditional lenders price different mortgage interest rates in various locations of the US. Loans offered by private lenders are priced differently and may be more expensive than traditional mortgages.

Profitable mortgage note buyers regularly search the rates in their market offered by private and traditional lenders.

Demographics

An effective note investment plan incorporates a study of the community by using demographic data. Note investors can discover a great deal by reviewing the size of the populace, how many people are employed, the amount they make, and how old the residents are.
A young growing community with a strong job market can contribute a consistent revenue stream for long-term note buyers hunting for performing mortgage notes.

The identical area may also be beneficial for non-performing mortgage note investors and their end-game plan. In the event that foreclosure is called for, the foreclosed home is more easily liquidated in a good market.

Property Values

Mortgage lenders like to find as much home equity in the collateral as possible. This enhances the possibility that a potential foreclosure liquidation will repay the amount owed. Growing property values help increase the equity in the house as the borrower lessens the balance.

Property Taxes

Payments for property taxes are normally given to the lender simultaneously with the mortgage loan payment. When the property taxes are payable, there should be sufficient payments in escrow to handle them. If loan payments are not current, the lender will have to choose between paying the taxes themselves, or the property taxes become delinquent. Tax liens take priority over all other liens.

If a community has a record of growing tax rates, the combined house payments in that region are regularly expanding. Homeowners who have trouble handling their loan payments may fall farther behind and ultimately default.

Real Estate Market Strength

A stable real estate market showing strong value growth is helpful for all types of note investors. The investors can be confident that, if necessary, a foreclosed property can be unloaded at a price that makes a profit.

A growing market might also be a good environment for making mortgage notes. This is a strong source of income for successful investors.

A REIT, or Real Estate Investment Trust, is a firm that makes investments in income-producing properties. This was first done as a method to empower the regular person to invest in real estate. The typical investor has the funds to invest in a REIT.

Investing in a REIT is one of the types of passive investing. Investment liability is spread across a portfolio of investment properties. Shareholders have the right to unload their shares at any moment. But REIT investors don’t have the option to select individual real estate properties or locations. The assets that the REIT picks to acquire are the assets your money is used for.

Mutual funds that contain shares of real estate firms are known as real estate investment funds. The investment properties aren’t owned by the fund — they are possessed by the businesses in which the fund invests. These funds make it possible for a wider variety of investors to invest in real estate properties. Funds aren’t obligated to distribute dividends like a REIT. As with other stocks, investment funds’ values rise and drop with their share price.

You can locate a real estate fund that focuses on a distinct kind of real estate business, such as multifamily, but you cannot suggest the fund’s investment assets or markets. You have to count on the fund’s directors to determine which locations and real estate properties are picked for investment.