In state or out of state. Based in Utah

[Brandon Ngo]

I've recently been looking into properties in my area for the past few weeks and I realized that the average prices are pretty high. A SFH can easily exceed $200k with rehabbed ones going for much higher. In my plan for a first property would most likely be househacking a 3-4 unit property. But the prices here in Utah are pretty high for multifamily properties and I can easily see myself dropping 80k+ on just rehab and down payment onto a single property. In the numbers I ran, I found it a little bit hard to get a significant cashflow and CoCROI especially with SFHs but it's definitely possible. Since, the prices were so high, I started looking out of state and I found that both Colorado and Nevada are fairly good states to invest into and since they are neighboring states, I was thinking of maybe moving out of state since it's fairly close to home. I really don't want to move away from all my family and friends so does anyone have any advice or are in similar situations?

[Will Fraser]

Hi @Brandon Ngo! Last year I came out to SLC with the intention of picking up an investment property and the deeper I dug into it the more nuanced I noticed the local market being.  

On the strong side: Utah on the whole experiences top-tier appreciation each year, with several submarkets of the Salt Lake MSA outperforming the state on the whole.  Rents are fairly strong, but it seems like you'll have to play a bit of speculation game (finding those outperforming submarkets and picking up rentals there to cashflow now, and ride the appreciation wave upwards).  In general I'm not a fan of speculation, so I'll put this in my "Weak side" bucket. 

On the weak side:  prices are relatively high compared to rents throughout the most desirable areas of SLC.  As an outsider I couldn't tell you the difference in South Provo and Lehi, so I've pretty much got to stick to SLC proper and the pockets of the city my team and I are most comfortable with.  If you have a better feel for the semi-rural areas throughout the state you could make a much better run of it.

Out-of-state investing -- my eventual conclusion was that house-hacking is the power-plow in SLC, and other than that most of my investing dollars will go to other markets OR to multi-family investments in SLC.  Evaluating other markets, though, I would not personally look at CO and Nevada, but would rather want to participate in the healthy appreciation of my home state, or get some geographic "plus points" of milder winters (CO) and strong economies (NV).

Be well, and have fun!