Homes for rent in Salt Lake County are in high demand, thanks to a growing population, robust job market, and strong economy. If you want to invest in rental property in Utah, here’s a short guide to choosing the right property, as well as some tips for renting a house in this desirable area.
Getting ready to buy rental property in Utah
Pay down existing debts. Take care of your finances and pay down as much debt as possible to qualify for a loan. If you have multiple loans, consider consolidating your debts to make them more manageable. You can also work with a financial advisor to come up with a debt repayment plan that can speed up the process.
Save up for a down payment. When buying investment property, you will typically need to come up with a hefty down payment of at least 20% since mortgage insurance isn’t available for most rentals.
Crunch the numbers. Before you take the plunge, make some estimates and projections to find out how much you can expect to make from rental properties in Utah. Factor in any expenses that can cut into your profits, such as commissions, maintenance, repairs, paperwork, staff salary, and so on.
Investopedia advises property investors to put annual maintenance costs at about 1% of the property’s overall value while operating expenses might take up 35% to 80% of gross operating income.
They also recommend aiming for returns of about 10% when deciding how much to pay (and charge) for rental property.
Finding the right rental property
Determine your price range. Are you looking to buy entry level rental property or a high end development? The bigger and more expensive the rental, the higher your operating and maintenance costs will be. If you’re new to real estate investments, experts generally recommend starting with a low cost rental in an up and coming area before working your way up to high end properties.
Find a contractor. It might be tempting to buy a fixer-upper because of the idea that you’re getting a great bargain. But if this is your first rental property, it might not be the best move unless you’re knowledgeable on extensive improvements. Otherwise, buying a fixer-upper could be money down the drain. Avoid this scenario by talking to a contractor ahead of time.
Choose the right location. Real estate is about location, location, location. In order to be profitable, a rental property must be located in a good school district and within reasonable distance of shops, restaurants, parks, and public transportation.
Salt Lake City Metro Area is known for having good schools, green spaces, world-class restaurants, and great shopping. It’s also a wonderful place to invest because of dwindling inventory and the growing demand for quality housing.
Managing a rental property
Know your obligations as a landlord. Landlords must follow state laws pertaining to managing rental properties and screening and evicting tenants. Click here to read about your rights and responsibilities as a landlord in Utah.
Hire a property manager. Running and maintaining a rental is a 24/7 job. If you don’t feel capable or comfortable with the idea of being a landlord, consider working with a property management company.
Capital Real Estate is here to help you locate your next investment. Get in touch with our team today to jumpstart the search process. Contact us at 801.330.8986 or info(at)capitalrealestate(dotted)co.