Ultimate Utah County Real Estate Investing Guide for 2024

The term BRRRR is a description of a long-term rental strategy — Buy, Rehab, Rent, Refinance, Repeat. When you desire to grow your investments, the BRRRR is a good plan to use. A crucial piece of this formula is to be able to obtain a “cash-out” mortgage refinance.

The After Repair Value (ARV) of the house has to total more than the total purchase and rehab costs. Then you obtain a cash-out refinance loan that is based on the higher market value, and you withdraw the difference. This cash is placed into the next investment property, and so on. You add growing assets to the portfolio and lease revenue to your cash flow.

When an investor holds a substantial collection of investment properties, it seems smart to pay a property manager and designate a passive income source. Discover one of property management companies in Utah County UT with a review of our exhaustive list.

Factors to Consider

Population Growth

The expansion or deterioration of a market’s population is a valuable barometer of the region’s long-term attractiveness for lease property investors. If the population growth in a city is high, then more tenants are likely coming into the market. The city is desirable to employers and working adults to move, find a job, and have families. Growing populations grow a strong renter mix that can keep up with rent growth and homebuyers who help keep your investment asset values up.

Property Taxes

Property taxes, maintenance, and insurance spendings are investigated by long-term lease investors for computing expenses to assess if and how the plan will pay off. Investment assets located in steep property tax communities will have less desirable returns. Communities with excessive property taxes aren’t considered a reliable situation for short- or long-term investment and need to be avoided.

Price to Rent Ratio

The price to rent ratio (p/r) is a contrast of median property prices and median lease rates that will signal how high of a rent the market can handle. An investor will not pay a high amount for a rental home if they can only demand a limited rent not allowing them to pay the investment off within a suitable time. You will prefer to see a low p/r to be confident that you can price your rents high enough for acceptable returns.

Median Gross Rents

Median gross rents are a true yardstick of the desirability of a rental market under examination. Median rents must be increasing to validate your investment. Reducing rents are a red flag to long-term investor landlords.

Median Population Age

Median population age will be similar to the age of a typical worker if a location has a consistent supply of tenants. You’ll discover this to be accurate in cities where workers are relocating. When working-age people aren’t entering the city to follow retirees, the median age will increase. That is a weak long-term economic scenario.

Employment Base Diversity

A diverse employment base is what a wise long-term rental property investor will hunt for. If there are only a couple major hiring companies, and one of them moves or disappears, it will lead you to lose tenants and your real estate market worth to drop.

Unemployment Rate

It’s hard to achieve a secure rental market if there are many unemployed residents in it. Jobless residents cease being customers of yours and of related companies, which creates a domino effect throughout the region. The still employed people could see their own salaries reduced. Even tenants who are employed will find it hard to stay current with their rent.

Income Rates

Median household and per capita income stats tell you if an adequate amount of desirable tenants reside in that area. Existing wage data will communicate to you if salary raises will permit you to hike rents to achieve your income projections.

Number of New Jobs Created

The reliable economy that you are hunting for will be generating enough jobs on a regular basis. More jobs mean a higher number of tenants. This enables you to purchase additional lease real estate and replenish current unoccupied properties.

School Ratings

The ranking of school districts has an important influence on property market worth throughout the community. Well-rated schools are a necessity for business owners that are thinking about relocating. Reliable renters are the result of a steady job market. Homeowners who come to the region have a beneficial effect on real estate prices. For long-term investing, hunt for highly graded schools in a potential investment market.

Property Appreciation Rates

The foundation of a long-term investment method is to hold the investment property. You have to see that the odds of your asset appreciating in market worth in that community are strong. Small or decreasing property appreciation rates will remove a city from your list.

Residential properties where renters reside in furnished accommodations for less than a month are referred to as short-term rentals. The per-night rental prices are typically higher in short-term rentals than in long-term ones. With tenants not staying long, short-term rental units need to be maintained and cleaned on a consistent basis.

Home sellers waiting to close on a new residence, excursionists, and business travelers who are staying in the city for about week prefer renting apartments short term. Any homeowner can convert their property into a short-term rental unit with the services offered by virtual home-sharing portals like VRBO and AirBnB. This makes short-term rentals a convenient approach to pursue residential real estate investing.

Short-term rental properties demand dealing with renters more frequently than long-term ones. This determines that landlords handle disputes more frequently. You may want to defend your legal liability by working with one of the best Utah County investor friendly real estate attorneys.

Factors to Consider

Short-Term Rental Income

Initially, determine the amount of rental revenue you should have to meet your projected profits. Being aware of the standard amount of rent being charged in the market for short-term rentals will allow you to choose a desirable area to invest.

Median Property Prices

Meticulously assess the budget that you want to spend on additional real estate. The median market worth of property will tell you if you can manage to be in that city. You can also utilize median prices in specific sections within the market to choose locations for investment.

Price Per Square Foot

Price per square foot can be misleading if you are examining different units. If you are analyzing the same kinds of real estate, like condominiums or detached single-family residences, the price per square foot is more reliable. Price per sq ft may be a quick method to compare different sub-markets or homes.

Short-Term Rental Occupancy Rate

The demand for additional rental units in a location may be verified by analyzing the short-term rental occupancy level. A high occupancy rate indicates that an extra source of short-term rental space is needed. If landlords in the market are having problems renting their current properties, you will have trouble filling yours.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will inform you if the purchase is a practical use of your own funds. You can compute the cash-on-cash return by taking your Net Operating Income (NOI) and dividing it by your cash investment. The resulting percentage is your cash-on-cash return. High cash-on-cash return demonstrates that you will regain your cash faster and the investment will have a higher return. If you take a loan for a portion of the investment budget and use less of your capital, you will realize a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

One metric shows the market value of a property as a cash flow asset — average short-term rental capitalization (cap) rate. High cap rates show that rental units are accessible in that region for reasonable prices. When properties in a location have low cap rates, they typically will cost too much. Divide your estimated Net Operating Income (NOI) by the property’s value or listing price. This gives you a ratio that is the annual return, or cap rate.

Local Attractions

Short-term tenants are often people who visit an area to enjoy a yearly special activity or visit places of interest. If a region has places that annually hold interesting events, like sports coliseums, universities or colleges, entertainment centers, and amusement parks, it can attract visitors from outside the area on a recurring basis. Notable vacation attractions are situated in mountainous and coastal points, near waterways, and national or state nature reserves.

When an investor purchases a property under market value, fixes it so that it becomes more valuable, and then sells it for a profit, they are known as a fix and flip investor. The secrets to a lucrative investment are to pay a lower price for the home than its as-is value and to carefully calculate the amount you need to spend to make it sellable.

You also need to evaluate the resale market where the house is positioned. Select a community that has a low average Days On Market (DOM) indicator. Liquidating the home immediately will keep your costs low and guarantee your returns.

So that real property owners who have to sell their property can effortlessly locate you, showcase your status by using our directory of the best real estate cash buyers in Utah County UT along with the best real estate investors in Utah County UT.

Additionally, hunt for top real estate bird dogs in Utah County UT. These professionals concentrate on skillfully locating promising investment opportunities before they come on the open market.

Factors to Consider

Median Home Price

The area’s median housing price should help you spot a suitable neighborhood for flipping houses. Lower median home values are a hint that there is a steady supply of houses that can be bought for lower than market value. You must have inexpensive houses for a lucrative fix and flip.

If your review entails a fast decrease in housing market worth, it could be a heads up that you will discover real estate that fits the short sale requirements. You will be notified concerning these possibilities by joining with short sale processors in Utah County UT. Discover more concerning this kind of investment explained in our guide What to Know When Buying a Short Sale House.

Property Appreciation Rate

Are home prices in the community moving up, or moving down? You are looking for a constant growth of the city’s home prices. Rapid property value increases could indicate a market value bubble that isn’t reliable. Acquiring at an inconvenient time in an unreliable market condition can be devastating.

Average Renovation Costs

Look carefully at the potential repair spendings so you will find out if you can reach your goals. The time it will require for getting permits and the municipality’s regulations for a permit request will also influence your decision. If you need to have a stamped set of plans, you will need to incorporate architect’s rates in your costs.

Population Growth

Population increase statistics allow you to take a look at housing need in the region. Flat or declining population growth is a sign of a sluggish environment with not an adequate supply of purchasers to validate your risk.

Median Population Age

The median citizens’ age can additionally tell you if there are qualified home purchasers in the area. It better not be less or more than the age of the regular worker. Workforce are the individuals who are possible homebuyers. The requirements of retirees will probably not suit your investment venture strategy.

Unemployment Rate

While evaluating a market for investment, search for low unemployment rates. The unemployment rate in a potential investment community needs to be lower than the nation’s average. If it’s also lower than the state average, that is much more desirable. Non-working individuals cannot acquire your homes.

Income Rates

Median household and per capita income numbers advise you whether you will get adequate buyers in that city for your houses. When home buyers purchase a home, they normally have to get a loan for the home purchase. Home purchasers’ eligibility to get approval for a loan hinges on the size of their salaries. Median income will let you analyze if the standard home purchaser can buy the houses you plan to sell. You also want to see incomes that are increasing continually. To keep up with inflation and rising building and supply costs, you need to be able to regularly mark up your prices.

Number of New Jobs Created

The number of employment positions created on a steady basis shows if wage and population increase are feasible. More people purchase homes if the city’s economy is generating jobs. With additional jobs generated, more prospective home purchasers also come to the community from other cities.

Hard Money Loan Rates

Real estate investors who work with renovated real estate regularly use hard money loans rather than traditional mortgage. This allows them to quickly purchase undervalued real property. Find the best private money lenders in Utah County UT so you may match their charges.

People who aren’t knowledgeable concerning hard money loans can learn what they need to know with our detailed explanation for newbies — What Is a Private Money Lender?.

Wholesaling is a real estate investment strategy that entails scouting out houses that are interesting to real estate investors and putting them under a purchase contract. When a real estate investor who wants the residential property is spotted, the contract is assigned to them for a fee. The property is sold to the real estate investor, not the real estate wholesaler. You’re selling the rights to the purchase contract, not the home itself.

This strategy includes employing a title firm that’s knowledgeable about the wholesale purchase and sale agreement assignment operation and is able and predisposed to coordinate double close purchases. Search for title companies for wholesaling in Utah County UT in HouseCashin’s list.

To know how real estate wholesaling works, study our insightful article What Is Wholesaling in Real Estate Investing?. As you select wholesaling, include your investment venture in our directory of the best wholesale property investors in Utah County UT. That way your desirable audience will know about your availability and reach out to you.

Factors to Consider

Median Home Prices

Median home prices in the region will inform you if your required purchase price point is possible in that city. Reduced median purchase prices are a solid indicator that there are enough properties that could be acquired under market value, which real estate investors need to have.

A quick decrease in the value of real estate might generate the abrupt availability of houses with negative equity that are desired by wholesalers. Wholesaling short sale houses frequently carries a collection of unique benefits. Nonetheless, it also creates a legal risk. Obtain more information on how to wholesale a short sale house in our thorough article. When you’ve decided to attempt wholesaling short sale homes, be certain to engage someone on the list of the best short sale legal advice experts in Utah County UT and the best foreclosure lawyers in Utah County UT to assist you.

Property Appreciation Rate

Property appreciation rate enhances the median price data. Investors who plan to keep real estate investment assets will need to see that housing prices are regularly appreciating. A declining median home price will indicate a poor rental and home-buying market and will turn off all sorts of investors.

Population Growth

Population growth data is essential for your prospective contract assignment purchasers. If the community is expanding, more housing is needed. Real estate investors realize that this will involve both leasing and owner-occupied residential housing. A community with a dropping community will not attract the real estate investors you need to buy your purchase contracts.

Median Population Age

A strong housing market necessitates people who start off leasing, then transitioning into homeownership, and then buying up in the residential market. This requires a strong, reliable labor force of individuals who are optimistic to move up in the residential market. When the median population age equals the age of working people, it signals a strong residential market.

Income Rates

The median household and per capita income will be on the upswing in an active real estate market that investors prefer to participate in. When renters’ and homeowners’ salaries are going up, they can contend with surging lease rates and home prices. Investors stay away from communities with poor population wage growth indicators.

Unemployment Rate

Real estate investors will take into consideration the market’s unemployment rate. Tenants in high unemployment markets have a challenging time making timely rent payments and a lot of them will skip payments completely. This negatively affects long-term investors who need to rent their real estate. High unemployment causes problems that will prevent people from purchasing a property. This can prove to be challenging to locate fix and flip investors to acquire your purchase agreements.

Number of New Jobs Created

The number of jobs produced each year is a crucial part of the residential real estate picture. New citizens move into a community that has additional jobs and they require a place to live. No matter if your buyer supply is made up of long-term or short-term investors, they will be attracted to a city with stable job opening production.

Average Renovation Costs

An indispensable consideration for your client real estate investors, specifically fix and flippers, are rehabilitation expenses in the market. When a short-term investor renovates a building, they need to be prepared to unload it for more money than the total expense for the acquisition and the improvements. Give priority status to lower average renovation costs.

Note investing means purchasing a loan (mortgage note) from a lender for less than the balance owed. By doing so, you become the mortgage lender to the initial lender’s debtor.

When a mortgage loan is being repaid on time, it’s thought of as a performing loan. Performing loans are a steady provider of passive income. Non-performing loans can be re-negotiated or you can buy the collateral for less than face value through a foreclosure process.

One day, you could have multiple mortgage notes and necessitate more time to handle them without help. In this case, you may want to hire one of loan servicers in Utah County UT that would basically turn your investment into passive income.

If you decide to adopt this investment model, you should place your business in our directory of the best mortgage note buying companies in Utah County UT. This will make your business more noticeable to lenders offering desirable opportunities to note investors like yourself.

Factors to consider

Foreclosure Rates

Note investors searching for valuable mortgage loans to acquire will prefer to find low foreclosure rates in the region. If the foreclosures are frequent, the place could nonetheless be profitable for non-performing note investors. The neighborhood should be strong enough so that investors can complete foreclosure and unload collateral properties if necessary.

Foreclosure Laws

Successful mortgage note investors are fully aware of their state’s regulations concerning foreclosure. Some states utilize mortgage documents and others use Deeds of Trust. You may need to receive the court’s okay to foreclose on a house. You don’t have to have the judge’s approval with a Deed of Trust.

Mortgage Interest Rates

Acquired mortgage notes come with an agreed interest rate. This is a major determinant in the profits that lenders achieve. Interest rates impact the plans of both types of note investors.

The mortgage rates quoted by conventional lenders are not the same in every market. The stronger risk accepted by private lenders is reflected in bigger interest rates for their loans compared to traditional loans.

Successful mortgage note buyers regularly review the interest rates in their market offered by private and traditional mortgage lenders.

Demographics

A market’s demographics stats help note buyers to target their efforts and properly distribute their resources. Mortgage note investors can learn a lot by reviewing the size of the population, how many citizens are working, how much they earn, and how old the people are.
Mortgage note investors who invest in performing mortgage notes hunt for regions where a high percentage of younger people maintain good-paying jobs.

Non-performing mortgage note buyers are reviewing similar elements for other reasons. If these note investors want to foreclose, they’ll require a stable real estate market in order to liquidate the REO property.

Property Values

Note holders need to see as much home equity in the collateral property as possible. This enhances the likelihood that a possible foreclosure liquidation will make the lender whole. The combination of mortgage loan payments that lower the loan balance and annual property market worth appreciation expands home equity.

Property Taxes

Escrows for house taxes are most often paid to the mortgage lender simultaneously with the loan payment. So the lender makes certain that the real estate taxes are paid when payable. If the homeowner stops performing, unless the lender remits the property taxes, they won’t be paid on time. If a tax lien is filed, the lien takes a primary position over the your loan.

If property taxes keep rising, the client’s loan payments also keep increasing. Homeowners who are having difficulty making their mortgage payments could drop farther behind and eventually default.

Real Estate Market Strength

A vibrant real estate market with consistent value appreciation is beneficial for all types of mortgage note investors. As foreclosure is a critical component of note investment planning, appreciating real estate values are critical to discovering a profitable investment market.

A vibrant market might also be a good community for initiating mortgage notes. This is a profitable stream of income for experienced investors.

A REIT, or Real Estate Investment Trust, means a company that makes investments in income-generating real estate. REITs are invented to empower everyday people to invest in properties. The everyday person is able to come up with the money to invest in a REIT.

REIT investing is called passive investing. Investment risk is diversified across a portfolio of properties. Participants have the right to liquidate their shares at any moment. Something you can’t do with REIT shares is to determine the investment properties. The assets that the REIT chooses to purchase are the assets your money is used for.

A Real Estate Investment Fund is a mutual fund that possesses stocks of real estate businesses. The investment real estate properties are not held by the fund — they are held by the companies the fund invests in. These funds make it doable for additional investors to invest in real estate. Whereas REITs are required to disburse dividends to its members, funds don’t. The profit to you is produced by appreciation in the worth of the stock.

You can locate a fund that focuses on a particular type of real estate firm, like residential, but you cannot choose the fund’s investment assets or markets. You must depend on the fund’s managers to choose which markets and properties are chosen for investment.