After recovering from the crash, Utah is fast becoming the hottest market for single-family home investments. While home prices are still going up across the board, Utah’s local economic climate is showing potential income for would-be investors and sellers, and even buyers.
In a report published by a leading investment property management company in Salt Lake City, single-family homes will be the hottest investment and rental markets starting this year. Single-family residence (SFR) values have been appreciating over the past few years, which also improve their rental value. Real estate experts attribute the rise of SFR investments to the following.
Millennials Enter Peak Nesting Years
The impact millennials have on real estate becomes bigger by the second. Quite a number of older millennials are choosing to spend their peak nesting years in single-family detached homes. A HousingWire article writes that the SFR market, which comprises 37% of the total SFR market, is poised for more growth in 2017.
Utah County is one of the top places where millennials are buying and renting homes. Unsurprisingly, the county also enjoys the fastest employment growth among the 342 largest counties in the U.S. Investors should watch out, as Utah will continue to attract prospective millennial workers and homeowners.
Quality Tenants and Buyers
What makes SFRs a generally better investment is that the neighborhoods to which they belong are usually safer and more pleasant. Investing in SFRs in acceptable neighborhoods attract high-quality tenants.
For this reason, turnover and vacancy rates are much lower compared to other rental and property markets. Consequently, rent collection is also much easier in SFR rentals in good neighborhoods.
Long-Term at Low Risk
SFRs offer great long-term returns at low risk because these types of properties usually appreciate in value. While short-term rentals offer immediate revenue, SFRs provide yearly returns based on the annual increase in home value. It’s a great supplemental income for part-time investors and people saving for retirement.
Veteran investors add SFRs to their portfolio to supplement riskier investments to short-term choices. Beginners can also take advantage of this opportunity, especially now that there are tons of tools to help them navigate the market.
In the past couple of years, Utah’s rental climate for single family homes has become stronger compared to national averages, coupled with affordable average house price. It’s attracting both the millennial workforce and investors.