What works in Davis county

[Todd Summers]

I have spent the last few days analyzing rental properties in and around Logan, Utah. From everything I have found (maybe I'm doing the math wrong because I'm new to this) is that trying to use the 2% test or even the 1% test wont work. It is more like .7 or .8 of the purchase price. You can still get decent cash flow but you have to be willing to buy houses 80 to 100 years old and doing a ton of work.  I have also looked at town homes where the hoa fees eat up a good portion of cash flow. I came to these conclusions using $1100 a month rent for a 3 bed 2 bath sfr and $800 for a townhome of 2-3 bedroom. The highest cash on cash return ive seen in my analysis is 9.7% and that was on a home 100 years old that needed $35000. worth of work and that's assuming that the after repair value of a 100 year old home would be the same as a house built in 1996 that has been updated pretty similarly. Is that possible for a home of that age to have a market value as something built in the last 20 years even if it is renovated and updated? What type of properties are people buying in Davis county to use as rental properties? I know Utah state is there do most people do college rentals? Those are something I'm trying to avoid. I have found in my research that Logan has a 5-8%vacancy rating which I feel is pretty good. Is there a demand there for better quality sfr rentals that bring in rents that justify that type of investment or should I be looking for c quality rentals in b quality neighborhoods. Any information would be helpful. Thank you