The 5 Best Places to Buy Rental Property in Utah

By Alene Laney

Posted on June 28th, 2022

Provo | Salt Lake City | West Jordan | West Valley City | Orem

Photo of Provo, Utah

Photo Credit: Dylan The Photographer

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There’s no slowing down the growing, vibrant state of Utah. Boasting a strong economy and the fastest growing population in the U.S., Utah is no longer the closed-off pioneer colony it once was.

Today, Utah’s relatively low taxes, family-friendly environment and uniquely beautiful landscapes make this state an attractive place to call home. More than 3.3 million people live in Utah, and with an annual population growth rate at nearly 2% — the highest rate in the U.S. — the number of people seeking housing continues to climb.

For residential real estate investors, this means there's an abundance of stable renters in Utah. Ultimately, these factors make Utah one of the best places to buy rental property.

Yet the strong economy also presents a challenge for investors as Utah's popularity continues to rise. Investment apartments and other properties can be hard to come by and competition for them means landlords will pay a premium. Rental rates have yet to catch up to the recent spike in property values, so cash flow could become a problem for investors without strong reserves.

Whether you want to invest in Provo, Orem, or anywhere in between, our friends at Clever Real Estate can help you get started. Clever is a free, no-obligation agent matching service that will introduce you to qualified, pre-vetted realtors from trusted brokerages including Keller Williams, RE/MAX, and Coldwell Banker.

There's no risk or downside to starting your journey with Clever — you can meet as many agents as you like until you find the best one to advise you on your real estate investment journey.

Best of all, investors who find an agent through Clever can get up to 0.5% cash back after closing. In Utah, where the median price for a single-family home is $567,714, that's up to $2,800 back in your pocket!

👋 Contact Clever's licensed concierge team to meet top-rated real estate agents in Utah today!

1. The Best Place to Buy Rental Property in Utah: Provo

Provo, Utah is no longer an up and coming city — its status as a leader has been fully cemented. In 2022, Provo ranked #1 out of hundreds of cities in the Milken Institute’s Best Performing Large Cities across the U.S., beating out San Jose, Austin, and Seattle. This is in large part due to strong employment and wage growth in the area, which attracts talented employees to the area.

Provo also has a substantial student population that creates a constant need for rental properties. More than 75,000 students attend Brigham Young University and Utah Valley University, the two largest universities in the area.

Major tech companies including Adobe, Oracle, Vivint, and Qualtrics tap into the well-educated pool of graduates these universities produce. This results in great jobs, economic growth for the state, and strong demand for housing in the area.

Utah County has nearly 200,000 housing units, with many of those in Provo. In Provo, rental rates range from $920 for a studio apartment up to $1,695 for a four-bedroom home.

Property values are also on the rise. Since 2015, average home values have soared from $217,000 to more than $490,000 today — including a 27% increase for the city in the last year alone. Property investors here may not see great cash flow by investing in this market as it currently sits. However, they may see incredible price appreciation as demand continues to outpace supply in this scorching real estate market.

2. Salt Lake City

Salt Lake ranked #3 on the Milken Institute’s Best-Performing Cities index — and much like Provo, also experiences high job and wage growth. In addition to the strong economic environment, the city also has easy access to outdoor and recreational opportunities. Nearby Park City offers world-class skiing, not to mention some ultra luxurious hotels. Salt Lakers can also find trails that offer a quieter stroll without scores of people.

Salt Lake City is the state’s capital and largest city, with more than 400,000 housing units throughout the metro area. Average rental rates range from $1,199 for a one-bedroom to $2,672 for a 5+ bedroom home. The average two bedroom apartment in Salt Lake City costs $1,460.

Salt Lake City’s property values are likely to continue rising under the influx of new residents attracted by the area's strong economic outlook. For example, the average price for a home in Salt Lake City in 2015 was $274,000. In 2022, that number jumped to $612,000 — a number that makes early real estate investors look especially savvy.

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3. West Jordan

West Jordan is a suburb of Salt Lake City that offers a good mix of urban and suburban living. The Jordan River Parkway trail winds through the city and offers excellent walking and biking trails.

In West Jordan, rental rates range from $1,032 for a studioto $2,735 for a 5 bedroom home. These numbers are expected to increase as rental rates fall in line with recent home price spikes.

Price appreciation in West Jordan has been outstanding. In 2015, the average West Jordan home value was $251,000. In 2022, the average home value exceeded $570,000, an increase of over 100%.

4. West Valley City

West Valley City is another suburb of Salt Lake City, known for its large venues that attract concert-goers and sports fans alike. The Maverick Center in the heart of West Valley was the site of the 2002 Winter Olympic ice hockey games. Taking I-80 west of West Valley City will eventually land you in the Bonneville Salt Flats near the state border.

Since 2015, West Valley City's property values have soared from an average of $196,000 to more than $474,000 in 2022. This is a great value in Utah — far below the $600,000 prices that are common in other cities. Typical rent ranges from $1,100 for a one-bedroom apartment to $2,560 for a five bedroom house.

5. Orem

Much like neighboring city Provo, Orem is home to a large number of students and a thriving tech industry. Utah Valley University is conveniently located along the freeway, making it an easy destination for off-campus commuters who can rent throughout the city. Beyond student housing, Orem's suburban neighborhoods appeal to families.

Orem also hosts the annual Timpanogos Storytelling Festival, a unique event that draws storytellers, musicians, magicians, and puppeteers to Provo Canyon's gorgeous parks.

Investors will like Orem's property appreciation, too — property values have increased from an average of $229,000 in 2015 to $517,000 in March 2022.

Rental rates in Orem are strong, especially because of the demand created by the large number of students. Rental rates range from $1,212 for a one-bedroom apartment to $2,230 for a five bedroom home.

Next Steps for Your Rental Property Investment

From Provo's growing tech hub to West Jordan's scenic natural landscape, Utah offers plenty of promising real estate investment opportunities.

Before taking the plunge on a Utah investment property, we recommend shopping around for a local real estate agent. Our friends at Clever Real Estate — a free, no-obligation matchmaking service that pairs home buyers and sellers with pre-vetted agents — make it easy to meet knowledgeable agents, even from out of state.

With a great agent on your side, you'll be able to spot promising rental property opportunities, choose the smartest time to buy, and compete with other buyers in competitive markets.

Best of all, real estate investors who find an agent through Clever can easily take advantage of Utah's buyer rebate opportunities. You can receive up to 0.5% cash back at closing, helping you save thousands!

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FAQs

What is the best place to buy rental property in Utah?

Provo is the best place to buy rental property in Utah, followed by Salt Lake City and West Jordan. Learn how population growth, job opportunities, and home values impact rental property investments.

Is rental property a good investment?

In general, rental property is considered a sound investment, but a rental property's success or failure depends on both local market conditions and business strategy. Learn how to spot good investment opportunities — and save time, energy, and money — before buying a rental property in Utah.

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Posted in Buying a House, Real Estate Investing