Salt Lake City (SLC) continues to be a growing market. Home prices rose 31% over the last two years and the Greater Salt Lake area ranked #1 in the nation for multiple offers. The last few years became a bidding frenzy and houses were hard to come by. Now that we have entered Q2 of 2022 pricing increases are now stabilizing, and inventory is rising, it is truly the perfect time to revisit real estate investment in and around Salt Lake City. Below are 4 reasons why we think SLC is still a great place to invest in real estate.
What Makes Salt Lake City a Smart Place to Invest?
1. It’s a “20-year” market.
Future job growth over the next 10years is predicted to be 39.9%, which is above the national average of 33.5%. Salt Lake City has even earned the nickname “silicon slopes” after adding more than 47,000 tech jobs over the last 10-years.
The city’s government is steadily trying to keep up with growth and manage it effectively (see initiatives here). As a result of SLC hosting the 2002 Winter Olympics, the city has a robust public transit system in place that makes it well suited for future population growth.
2. Housing Appreciation
Since more and more people are moving to SLC, there is an increasing demand for real estate. Right now, home appreciation is soaring in the city, making it one of the best times to invest. Home appreciation has increased 10.4% every year over the past 10 years and Zillow is predicting a 15.1% increase for 2021.
Due to homes increasing in value, SLC is becoming less affordable, so many people are choosing to rent for longer periods of time creating, an increased demand for rentals. The average price of rent is trending upwards compared to previous years—a good sign for real estate investors looking for steady, substantial cash flow.
3. Increased Cash Flow
Real estate investors have discovered that SLC is a great market for increasing their cash flow, which is the gross revenue that is made after property expenses are subtracted from income made on the rental property.
John Burns stated that the single-family rent index grew 3.8% in 2020 and is forecasted to increase another 5.8% in 2021. Rent growth has skyrocketed. The median rent is approximately $1,603 and the price to rent ratio is 22.99. This suggests that high home prices will increase rental demand and that it is currently more affordable to rent vs. purchase. The home occupancy rate is at 94.4% and the apartment occupancy rate is at 94.1%.
Cap rates in the area are slightly below average. Salt Lake City rental properties tend to hover around 3.5-4% and it is difficult to find anything above 4%.
When it comes to property taxes it doesn’t get much better than Utah. In August of 2020, the U.S. Census Bureau stated that the average property tax rate within the state was .62%. This makes it the 42nd cheapest state (#50 being the cheapest state). There are also no taxes on rental income in the state of Utah.
Property Insurance is affordable. Trusted Choice Insurance came out with a survey in 2020 stating that Utah is 50th for cost of homeowners insurance in the U.S.
4. Landlord-friendly legislation
Buildium has ranked SLC as one of the most landlord-friendly markets. The city has a landlord-tenant initiative that raises the standard of rental homes. Landlords in this program volunteer to follow an enhanced set of dwelling management standards that are stricter than those laid out by the state. To view a complete overview of landlord/tenant laws in Utah visit the national landlord association.
As property owners ourselves, we at Atlas Real Estate know that finding the right deal is half the equation. The other half is managing it well. Our team ensures we can adequately manage properties in any city in which we buy/sell properties.
Whether you are looking for the perfect place to rent, a good investment deal or a Salt Lake City property manager, the local Atlas team can help! Reach out to one of our knowledgeable agents or property managers today to talk through your long-terms goals and how we can help you achieve them.
Meet the Salt Lake City team:
About Atlas Real Estate
Atlas Real Estate is a full-service real estate company specializing in investment services, property management and institutional acquisitions. A buy/sell brokerage, Atlas is also a Zillow Flex Partner Agent. Since its inception in 2013, Denver-based Atlas Real Estate has made a commitment to Uplift Humanity Through Real Estate. With offices in nine markets nationwide, Atlas transacts over $1 billion in real estate annually and manages more than 7,000 residential units. Atlas has been recognized by leading media outlets as a one of the Best Places to Work in Denver, the Best Property Management Company and a Top Company in Real Estate. To learn more about Atlas, visit www.realatlas.com.