In case you’ve missed it, Utah is booming, as is Utah real estate. Based on the Census Bureau’s annual estimates of resident population, from July 2010 to July 2018, Utah’s state population increased by 13.9%, second only to the District of Columbia, and No. 1 out of all 50 states in terms of growth.
Utah is an interesting state when it comes to buying and owning investment property. People and businesses have been flocking to the state, and many of its major cities have seen swelling numbers of renters. Major universities, healthcare companies and financial firms like Ally Bank can be found in Utah’s main cities, all of which help boost the economy, and increase the number of residents and appeal of the city to potential investment property owners.
Here’s a look at the best cities in Utah to own investment property and turn a solid profit.
1. Logan, Utah
With 61% of its occupied housing filled by renters, Logan is a fast-growing city whose population is expected to double by 2050.
A key feature that makes Logan conducive to investment property owners is the presence of Utah State University, with a student population of nearly 28,000, many of which are renters or looking to rent in off-campus residences. In addition to them, professors, university staff and employees, as well as employees of businesses closely associated with the university, add to a large supply of renters and potential renters in the city. Logan also has the highest gross rental yield of major cities in Utah, i.e. cities with more than 10,000 total occupied housing units.
Percentage of renter households: 61%
Number of renter households: 10,039
Median property price: $235,000
Median rent: $1,588
Annual rental income: $19,056
Gross rental yield: 8.1%
2. Ogden, Utah
Located north of Salt Lake City, about a 30-to-40-minute drive up Interstate 15, Ogden is another great place for potential investment property owners. Property prices are affordable in terms of buy-in, and rents are comparatively high enough to produce a gross rental yield of 6.3%, behind only Logan’s 8.1%.
Like Logan, Ogden is a college town, home to Weber State University, which has an undergraduate population of 27,111, according to U.S. News and World Report. The university’s students and staff provide a large pool of potential renters of your investment property in Ogden. In fact, according to the city’s Comprehensive Annual Financial Report, Weber State University is the No. 4 largest employer in Ogden, behind the Department of Treasury, Weber County School District, McKay-Dee Hospital Center, and ahead of Autoliv, the world’s largest automotive safety supplier, according to their website.
Percentage of renter households: 44.6%
Number of renter households: 13,442
Median property price: $229,900
Median rent: $1,207
Annual rental income: $14,484
Gross rental yield: 6.3%
3. Midvale, Utah
A majority of occupied homes in Midvale are renters, which bodes well for rental property owners. According to Census data from the 2017 American Community Survey, the number of renter-occupied housing units has risen by over 29% from 2010 to 2017. Compare that to the U.S. overall, which has seen an increase of 12.7% over the same period of time.
Several major companies have operations in Midvale, with some of the largest employers including Overstock.com, the staffing agency TEKsystems and the financial company SoFi, according to the city’s Comprehensive Annual Financial Report for 2018.
Percentage of renter households: 58.5%
Number of renter households: 7,293
Median property price: $308,900
Median rent: $1,503
Annual rental income: $18,036
Gross rental yield: 5.8%
4. South Salt Lake
South of Interstate 80, and bisected by the north-south Interstate 15, South Salt Lake is cheaper than Salt Lake City proper, and has a better gross rental yield than the latter city. This is because the median property price is less than $300,000 — whereas in Salt Lake City, it’s $425,000 — while the median rent is still high enough to yield solid rental income over the course of the year.
According to South Salt Lake’s Comprehensive Annual Financial Report for 2018, the biggest private employer is Marriott Vacations Worldwide, a leading timeshare company and publicly traded, which was originally a division of Marriott International before being spun off into its own firm.
Percentage of renter households: 58.6%
Number of renter households: 5,185
Median property price: $291,900
Median rent: $1,394
Annual rental income: $16,728
Gross rental yield: 5.7%
5. Orem, Utah
Orem is an interesting case for potential investment property owners looking to get into the Utah market. According to Census data, from 2017 to 2017, the number of renters increased by 16.4%, while at the same time, the number of owner-occupied homes actually declined: From 17,013 in 2010 to 16,200 in 2017.
Like other Utah cities on this list, Orem benefits from being home to Utah Valley University. This public university has an undergraduate population of close to 37,000, according to U.S. News. Besides this vast pool of potential student renters, Utah Valley University is the largest employer in Orem, according to the city’s Comprehensive Annual Financial Report.
Percentage of renter households: 41.1%
Number of renter households: 11,318
Median property price: $315,038
Median rent: $1,449
Annual rental income: $17,388
Gross rental yield: 5.5%
6. Provo, Utah
Along with Orem, Provo comprises the Provo-Orem metropolitan area, which has a combined population of 617,678, according to Data USA. The Provo metro area boasts an impressively low unemployment rate of 2.8% in Feb. 2019, according to the Bureau of Labor Statistics. In fact, from Feb. 2014 to Feb. 2019, unemployment in the Provo metro are has averaged 3.1%. Over that same period, the national unemployment rate averaged 4.8%.
For investment property buyers, Provo benefits from a high percentage of renters, due no doubt in part because it’s home to Brigham Young University, one of the largest private universities in the country.
Percentage of renter households: 59.2%
Number of renter households: 19,475
Median property price: $309,000
Median rent: $1,334
Annual rental income: $16,008
Gross rental yield: 5.1%
7. Salt Lake City, Utah
The population of Utah’s capital has grown from 184,488 in 2010, to 194,188 by 2017. That’s a little over a 5% increase, and similar to the increase in renter-occupied housing units over the same period: 5%, from 37,735 to 39,626. In the meantime, however, the number of owner-occupied units barely budged, from 37,223 in 2010, to 37,250 in 2017. This trend, along with the majority of the city’s residents being renters, bodes well for potential investment property owners in Utah.