First Published in the Salt Lake Tribune
Salt Lake City once again ranks among the best U.S. cities for investing in rental properties.
All Property Management, a trade group for those who own and manage apartments and single-family rental homes, says Utah’s capital is the sixth best urban market for rental investments among Western cities.
And it rates as the ninth best market in the nation, the group says in its Rental Ranking Report reflecting the first three months of 2015.
As it did in 2013, when Salt Lake City placed high on its list, Seattle-based All Property Management credits the city’s healthy yearly job growth — which the group puts at 2.75 percent — and historically low vacancy rates for rentals, pegged at 5.2 percent.
Other metrics include property-appreciation rates and the average number of days it takes to lease a vacant rental.
The trade group also says Utah’s relatively low property tax rates and annual homeowners insurance premiums let rental owners keep more of what they earn from their properties than investors in other parts of the country.
The study says Western states in general rank better for returns on rental investing than other regions, accounting for seven of the list’s 10 best U.S. rental markets. Among other Western cities with high returns are Seattle, Portland, San Francisco, San Jose and Denver.
Salt Lake City’s ranking is part of a well-documented surge in rental markets here and across the U.S., driven by demographic trends including a large generation of young, frequently cash-strapped adults choosing for now to rent instead of buy.
With homeownership rates approaching their lowest levels in a generation and rents rising, All Property Management says, “it’s a wonderful time to own rental housing.”
That news won’t surprise investors in Utah’s rapidly expanding stock of apartments as new complexes rise across the Salt Lake Valley and surrounding counties. But if you’re a renter or looking for an apartment, some of the trends might give you pause.
With vacancy rates down, average monthly apartment rents jumped 4.9 percent in Salt Lake County in 2013 and 2014, ending last year at $892 per unit. That’s according to a January 2015 report from Equimark, a Salt Lake City firm that tracks multifamily residential real estate along the Wasatch Front. More recent numbers, circulated by the commercial real estate firm Berkadia, put average rents in the wider metropolitan area at $933 a month as of March.