Utah Real Estate-- How Do I Find a Good Deal?!

[Timothy Roberts]

Good morning everyone,

My wife and I just bought our first home in a good area of South Ogden, Utah and intend to house hack it and move into another property in a year or so. The home we purchased already has a basement apartment with its own entrance as well as tenants paying $800 a month. The tenants are leaving when we move in (Their choice) and I'm thinking we may increase the rent to $900 (1 BD, 1 BTH about 1,000 Sq. Ft. with laundry, newly renovated bathroom, decent sized bedroom, good driveway parking for 2 vehicles, and nice, new flooring throughout). The upstairs is also about 1,000 Sq. Ft. and my wife and I will be living there for the time being. We think we could rent the top out for $1,100-$1,200 when we move out. There is also a 400-500 Sq. Ft. detached structure that has it's own electrical, heating and air, and plumbing that we hope to renovate and rent out as a studio apartment for $500-$600 a month.

All in all, our mortgage (With PMI) is around $1,700 a month. The home did not meet the 1% rule even when considering that we'll be renting out all 3 units. Once we've moved on, we'd hopefully be bringing in $2,600 a month to pay the mortgage and put some aside for repairs/reno. I'm hoping we can cash flow around $500 a month and maybe a bit more once PMI is gone.

Even though it doesn't meet the 1% rule, I feel it was a good investment on our part. My question though is, does anyone know much about the Utah real estate market? It's growing like crazy and not slowing down from what I can tell... How do you find good house hacking properties or good BRRRR properties in this market? Any advice or thoughts?

Also, does anyone know of any up and coming markets within Utah that would be wise to get into now when we're young and hold on to? We're in our early years and just starting out with this so I feel it would be wise to invest in an area like that.

I'm happy to get advice from anyone, regardless of whether or not you are in the Utah market or not.

Thanks!

-Tim R.

[Garrett Christensen]

Hi Timothy, yes, just because it doesn't meet the 1% rule doesn't mean it's a bad investment. It's actually pretty tough to meet that here in Utah. Not to say it's impossible though. With all markets there is a balance of cash flow and appreciation. Utah properties are going up in value, but not necessarily cash flowing well compared to other markets. 

With that being said, rents are already starting to increase due to the high demand we're seeing right now, and that's probably just going to continue. I personally think that southern Utah County is a good "up and coming market". Utah Valley doesn't have much room to expand except south, or Lehi area, which is already priced very high.