What To Expect When You Invest in Utah Real Estate
Investing in Utah real estate presents a compelling opportunity for those seeking a stable and profitable adventure. With a robust economy, population growth, diverse property options, stable values, and a stunning natural environment, Utah has positioned itself as a prime destination for real estate investors.What to Expect: People who invest in Utah Real Estate are typically doing it for the appreciation potential and the fact that it's a relatively landlord-friendly state.There are other states where you can buy properties that have cash flow better than Utah, but Utah kills it with long term appreciation. Because mortgage rates are so high right now, if you can find a property where you can cash flow at all at current rates, is a huge win. Keep in mind that cash flow is actually the smallest way you are making money by owning real estate. Here are the other ways you make money: Value Appreciation: The state's consistently low unemployment rate and a business-friendly environment attract a steady influx of residents, contributing to a strong demand for housing. Additionally, Utah's stunning natural landscapes and recreational amenities make it an attractive destination for both residents and tourists, further enhancing the appeal of real estate investments. As the population continues to grow, the limited supply of available land ensures that real estate values are likely to appreciate over time. Tax Benefits: Rental properties offer a plethora of opportunities for tax advantages. A good accountant can utilize your rental properties to create a HUGE tax shield for you through things like accelerated depreciation and deducting interest, property management costs, and overhead. By leveraging this method, investors can write off the cost of their property at an accelerated rate, providing significant tax benefits in the early years of ownership. Tenant Paying Down your Principal Each Month: One of the compelling aspects of real estate investment is the way in which tenants contribute to building equity by paying down the principal balance of the loan each month. Every rental payment from the tenant serves as a dual-purpose financial move for the property owner. Not only does it cover the cost of mortgage interest, property taxes, and maintenance, but a significant portion also goes towards reducing the outstanding loan amount. Over time, this consistent repayment by tenants results in an incremental increase in the property owner's equity. Essentially, each monthly payment serves as a form of forced savings, steadily growing the investor's ownership stake in the property. This unique feature of real estate investment not only builds wealth but also positions property owners for potential future financial opportunities as their equity continues to accumulate. Strategies that are working for our clients:Single Family HomesBenefits: Securing long-term tenants with stable incomes not only brings immediate financial benefits but creates a long-term range of advantages for property owners. The presence of tenants with good income often translates into a heightened commitment to property maintenance and care, resulting in lower overhead costs for repairs and renovations. The continuity of occupancy reduces turnover rates, minimizing the time and expenses associated with finding new tenants. This stability contributes to a low vacancy rate, ensuring a consistent stream of rental income. Additionally, attracting long-term tenants often enables property owners to command higher rental rates due to the reliability and quality of their tenant base. As tenants stay for extended periods, the property is likely to experience long-term value appreciation, aligning with market trends and creating a solid foundation for sustained real estate investment success. Downsides: Managing higher-cost properties often comes with increased expenses per door, from property taxes to insurance and other associated fees. Additionally, exterior maintenance costs can be elevated, as maintaining a property's curb appeal and structural integrity may require more substantial investments. Another consideration is the responsibility for lawn care, which falls on either the property owner or the tenant. If not managed effectively, this can lead to potential disputes or additional costs. Condo/Townhomes:Benefits: Lower cost per door compared to standalone houses makes condo/townhome investments more accessible for many investors. One significant benefit is that the Homeowners Association (HOA) typically assumes responsibility for exterior maintenance. This not only reduces the financial burden on individual owners but also simplifies property management by outsourcing tasks such as landscaping, building repairs, and common area upkeep. The shared costs within the HOA contribute to economies of scale, allowing property owners to enjoy well-maintained exteriors and amenities without the hassle of coordinating maintenance efforts. Overall, condo and townhome investments offer a streamlined and potentially more cost-effective approach for real estate investors looking to minimize the time and expenses associated with property upkeep. Downsides: One significant drawback is the adherence to Homeowners Association (HOA) rules and regulations, which can limit the flexibility and autonomy of property owners. HOA restrictions may impact everything from exterior appearance to rental policies, potentially influencing the investor's ability to make decisions aligned with their preferences. You should also know that condos, in particular, may experience higher turnover rates compared to townhomes. The nature of condominium living, with shared walls and common areas, can lead to a more transient resident population. This turnover could result in more frequent vacancies and the associated challenges of finding new tenants regularly. Multi-Unit:Benefits: Investing in multi-unit properties offers compelling advantages, particularly in terms of cost efficiency and cash flow potential. Multi-unit properties, such as apartment buildings or multifamily dwellings, often provide the lowest cost per door compared to individual units. This cost-effectiveness becomes more pronounced as the number of units increases. Because it’s harder to get financing on bigger (4+) units, the pool of buyers (demand) is smaller. Since you won’t be competing with as many owner occupants or newer investors on these, you can get a better deal on them. If you can come up with the large down payment needed and qualify for financing, you will enjoy a higher ROI on big, multi-unit properties. Additionally, the ability to diversify rental income across multiple units helps mitigate risks associated with vacancies, offering a more stable and resilient investment strategy in the real estate market. Downsides: Managing multiple units entails higher overhead, as property owners must coordinate maintenance, repairs, and other operational aspects for each unit. This elevated level of management complexity can lead to increased expenses and demands on the owner's time and resources. Turnover in multi-unit properties may be more frequent compared to single-unit investments, as the turnover of one tenant in a multi-unit setting can impact multiple rental incomes simultaneously. Vacancies and the associated turnover costs, such as marketing, screening, and potential property upgrades, can pose challenges in maintaining a steady and consistent cash flow. Careful property management strategies and proactive measures are crucial to mitigate these downsides and maximize the benefits of investing in multi-unit properties.If you’re just getting started with investing, multi unit properties might be out of reach and that’s ok! Eventually, you’ll have enough equity to move it into something like this. The most important thing is to get your foot in the door and own some Utah real estate!Student Housing: Benefits: Investing in student housing presents unique benefits, particularly when focusing on renting by the room. This approach can yield a substantial return on investment (ROI) as each room in a student property can be individually leased, maximizing rental income. Real estate located near major universities like BYU, UVU, and the University of Utah are likely to hold its value over time. The consistent demand for student housing near educational institutions ensures a reliable tenant pool, providing a steady stream of rental income. The stability of this market is often bolstered by a continual influx of students, faculty, and staff associated with the university, creating a resilient investment opportunity. Downsides: One significant drawback is the potential for the highest overhead costs among various real estate investment types. Managing multiple rooms or units, catering to the needs and demands of a transient student population, can lead to increased operational expenses. Student housing is often associated with higher turnover rates. As students complete their studies or move between semesters, property owners may face more frequent vacancies, requiring consistent efforts and resources for finding new tenants. Another challenge is that student tenants may be less likely to address maintenance issues themselves due to financial constraints. This could result in increased responsibilities for property owners to handle repairs and upkeep, further contributing to higher operational costs. Utah locations to watch due to recent or planned investments in infrastructure/business: Daybreak Vineyard North Salt Lake Bountiful Draper Anywhere with highly rated schools Utah and Salt Lake County in general have the highest job growth projections so you probably can't go wrong buying anywhere in these counties- a rising tide lifts all ships.Locations to watch due to high population growth projections: Washington County (HUGE GROWTH PROJECTED HERE) Wasatch County Toole County Juab County Morgan County Ways to Get Properties that Work: Buy Fixer Uppers Find off market/pre-market properties (our team always has a list) Write low ball offers House Hack Seller Financing Create a syndicate group -we can help with this as we have a list of people interested in doing thisNew Construction: Builders are offering some crazy incentives right now to get rid of inventory, but this may end soon as the market picks back up in the spring.Call or Text our team at 801.389.8975 or start your property search here.
Breaking Down the New Realities of Selling a Home in Utah Amid NAR Changes
Anyone who has been a realtor in Utah for any significant amount of time has seen the ebb and flow of the real estate market, and while some things remain constant, recent changes due to the National Association of Realtors (NAR) settlement have introduced new push points to the home-selling process. However, despite these changes and all the media attention surrounding them, the core aspects of selling a home in Utah remain the same. Sellers will continue to seek professional representation, aiming to sell their homes for top dollar with minimal hassle, and buyers will still desire expert guidance. Yet, understanding what has and hasn’t changed is the question at hand for anyone looking to navigate Utah’s real estate market today. The Core of Selling a Home Remains the Same Let’s start with what hasn’t changed. Selling a home in Utah still hinges on the fundamentals: a strong marketing plan, local expertise, and skilled negotiation. Sellers who want to maximize their home’s value and minimize stress will continue to rely on experienced Realtors who know the market inside and out. From staging a home to crafting a compelling listing, ensuring that a property is positioned attractively and strategically, and then negotiating from a position of power remains as critical as ever. The goal is the same: to expose the home to the maximum number of potential buyers, thereby driving up demand and securing the best possible sale price. The Shifting Landscape of Realtor Compensation However, the landscape has shifted when it comes to how Realtors are compensated, particularly in relation to how buyer agents are paid. Traditionally, the listing agent would negotiate a commission from the seller that covered both their services and the buyer’s agent’s services. This approach worked well because it removed a significant cost barrier for buyers, who often have less cash on hand. By covering the buyer agent's fee, sellers and their agents could attract more buyers and streamline the process. The NAR settlement, however, requires that compensation for listing agents and buyer agents be decoupled. This means that the seller’s agent and buyer’s agent must now negotiate their fees separately, and sellers can no longer advertise a blanket offer of compensation to buyer agents on the Multiple Listing Service (MLS). The MLS, a database Realtors use to list properties and find potential buyers, will no longer have a field where agents can advertise in advance how much they are willing to pay a buyer’s agent. What Does This Mean for Utah Sellers? For sellers in Utah, this change means a shift in strategy. While you can still agree to cover some or all of a buyer agent’s costs, this will now be a point of negotiation rather than an expectation that is always advertised upfront. Working with your Realtor, you’ll need to decide how to position your home in a way that remains attractive to buyer agents and their clients. This could mean contributing to buyer agent fees to maintain a competitive edge or focusing on other aspects of your listing to draw in potential buyers. The Utah market has shown resilience and continued demand, even in changing times. The statewide median home price continued to increase. At $509,900, the median rose nearly 4% from last year in June. However, inventory remains tight, and buyer competition is fierce, making it all the more important to ensure your home is accessible and appealing to a broad audience, including both represented and unrepresented buyers. Adapting to New Realities with Your Realtor Your Realtor will play a critical role in navigating these new realities. A good one will help you assess market conditions, your personal goals, and how best to attract qualified buyers. Some sellers may choose to disclose upfront their willingness to cover buyer agent fees, while others might prefer to keep this information confidential and use it as a negotiation tool once offers start coming in. In any case, it’s essential to discuss how to handle buyers who contact your agent directly. If a buyer is unrepresented, your agent’s fiduciary duty remains solely to you, but this could also create a situation where the buyer may request dual agency, where your agent represents both parties. The Path Forward While the recent changes from the NAR settlement have altered some aspects of the home-selling process, the fundamentals remain the same. Sellers who work closely with an experienced Realtor will still be able to position their homes effectively in the market, attract a wide range of buyers, and negotiate the best possible deal. By understanding the new rules around agent compensation and adjusting your strategy accordingly, you can ensure that you’re still getting the maximum value for your home. Selling a home has always been a significant undertaking, but with the right guidance and a clear strategy with an educated Realtor, it will remain a successful process for both seller and Realtor — even in the face of change.
Buyer and Seller Representation and All the Things McEwen Realtors Does to Support Our Clients
When buying or selling a home, having the right representation makes all the difference. The truth is, it’s hard to suss out whether an agent is worth your time and money if you’ve never worked with them before, especially if you’re a first-time home buyer or seller. But in today’s tough market, where inventory is limited and prices are high, it’s crucial to find a skilled and experienced agent — and recognize when you’ve hired a dud. Speaking of which, we just had a great conversation with reporter Leslie Cook at Money Magazine about signs you may need a new agent. Check it out here for more! From the initial property search to the final key exchange, McEwen Realtors offers a wide range of services designed to make the buying and selling experience as smooth and successful as possible. Why? Because having the right professional in your corner is worth its weight in gold. Here's how we go above and beyond to support their clients every step of the way.1. Connecting Clients with Trusted Professionals One of the first steps in the home buying or selling process is assembling the right team. We don’t just recommend any third-party professionals; we connect our clients with reputable lenders, title companies, home inspectors, movers, and home warranty companies. These are professionals that past clients have had great experiences with, ensuring that each transaction is handled with care and expertise. By providing these connections, McEwen Realtors helps build a reliable network that clients can trust.2. Providing In-Depth Property Insights Understanding the market is imperative in real estate, and we excel in gathering detailed information about properties and our sellers. We arrange showing schedules, maintain open lines of communication with listing agents, and conduct thorough comparative market analysis (CMA) on homes. This data-driven approach ensures that clients are well-informed about the value of a property and can make decisions confidently. 3. Expert Market Analysis Market trends can vary significantly, even within the same city. We go beyond the surface-level data, analyzing market trends down to hyper-specific markets and price ranges that clients are interested in. Our insights don't stop at what’s publicly available; we provide clients with the latest trends and changes that they observe in their daily business, even before they show up in broader market reports. This approach allows clients to anticipate market movements and make informed decisions. 4. Uncovering Off-Market Opportunities In a changing market, finding the right property can sometimes mean looking beyond the MLS. McEwen Realtors taps into their extensive network of potential sellers and real estate agents to help clients find off-market properties. This ability to uncover hidden gems gives our clients a significant advantage, especially in high-demand areas. 5. Navigating Contracts and Legalities The real estate contract is no doubt daunting, but we are there to guide clients through every clause. We prepare contract paperwork, helping clients understand how to utilize contract terms for their benefit. Whether it's assessing risk, negotiating prices, or managing legal paperwork, we ensure that every detail is covered. We will always take the time to review tax records, reconcile them with MLS listings, and point out any red flags in seller disclosures. 6. Comprehensive Negotiation Support Negotiation is a critical aspect of any real estate transaction. We handle negotiations on behalf of our clients, whether it's the price, concessions, timelines, or seller leasebacks. We find a balance that benefits our clients while keeping the deal on track. Our negotiation expertise extends to inspections and appraisals, where we help clients navigate and resolve any issues that arise. 7. Managing the Entire Transaction Process From start to finish, we manage the entire transaction process. We arrange inspections, provide disclosures to inspectors, and ensure that earnest money is deposited safely in our brokerage's trust account—a service not all brokerages offer. This protects clients' funds and allows for a quick return if a transaction falls through due to contract contingencies. We also keep track of all contract dates, making sure that every party involved—lenders, title companies, and the other side—performs on time. 8. Finalizing the Sale As the transaction nears completion, we continue to support clients by reviewing the title report, pointing out any red flags, and assisting with resolving any issues. This ensures that the settlement statement is accurate and schedules the settlement. In the final stages, we coordinate the final walk-through, gather essential information about utilities and services, and arrange for the key exchange. 9. Ongoing Support After the Sale Our commitment to clients doesn’t end at closing. We want to continue to be a valuable resource, keeping clients updated on the market value of their property and connecting them with reputable movers, contractors, interior designers, landscapers, and roofers. This ongoing relationship ensures that clients always have the support they need, long after the sale is complete. If you’re looking for a new home or hoping to sell yours this summer, please reach out to McEwen Realtors. We are a team of award winning, full service Realtors, serving sellers and buyers along the Salt Lake City and Utah Wasatch Front. Led by Alex and Mike McEwen, a third generation Realtor and husband and wife team with 13+ years of experience, we aim to create the happiest clients in Utah. Our clients can expect a personalized experience, world class representation, and expert guidance. Text or call us today and put our experience and expertise to work toward your real estate goals at 801-389-8975.
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