Whether you’ve purchased an income property before or this is your first time venturing into real estate investments, there are a few things to keep top-of-mind during your journey. Park City and Salt Lake City are two areas where the fundamentals for ROI are strong. Keep reading to hear our top 5 considerations.
1. Work With An Experienced Local Realtor
You should always interview at least 2-3 agents so you know you’re working with the right one. Consider a realtor who is:
- Well-versed in helping buyers purchase investment properties in Park City and Salt Lake City
- Knowledgeable about the rental market, as it differs from the primary residence market
- Knowledgeable about the various property types
- Understands the potential for ROI
- Well-connected, with a network of relevant professionals and services, e.g. financial professionals, contractors, etc. who may be needed to complete your transaction or elevate your investment
- Up-to-date on local regulations and restrictions around zoning, operating rental properties, etc.
The right agent will act as your one-stop-shop for educating you about the market, helping you find the right real estate solution, managing your transaction, and connecting you with trusted referrals.
2. Determine Your Overall Investment Goals
To know where you should invest, you need to know what your end goal is. Ask yourself:
- Is this a longterm retirement investment?
- Is it a short term investment to save for a particular need?
- Is the purchase to diversify your financial portfolio?
- Do you want to manage the property yourself, or hire someone to oversee the property on your behalf?
Understanding your overall goals will help your realtor distill the investment opportunities that align with your plans.
3. Understand Your Costs
The costs around buying an investment property from out-of-state can vary compared to purchasing a primary residence. Before you start looking at potential properties, consider your potential costs:
- Capital gains tax
- Property tax
- Insurance payments
- Financing options
- Property management fees
Crunch the numbers using a real estate calculator, like the one below, so you have an accurate estimate of your costs before you start your search. When it comes to financing your purchase, you may be able to leverage existing real estate or financial products to buy your investment property. Your agent will help you fully understand your financial responsibilities, and connect you with the right professionals to secure your financing.
4. Understand The Market & Communities
Park City and Salt Lake both provide elevated lifestyles for homeowners and residents. But their communities and markets do vary in important ways.
- Park City sees an influx of visitors during winter and summer, for ski season and golf/outdoor recreation. It’s also known for its availability of ski-in/ski-out residences and luxury ski-related amenities.
- Salt Lake has a more consistent population because of the presence of year-round residents, its professional hub, and the urban landscape. The city is also well-suited for diverse recreation.
The differing communities, real estate, and lifestyles in each area mean the type of tenant searching in each will vary.
5. Identify Your Ideal Tenant
Beyond finding the right property in the right area, you need to find the right tenant. You should have a tenant wish-list much like a new-home wish-list, so you find someone who is the right fit. Do you want to rent to families interested in long-term rentals? Would you prefer individuals seeking short-term rentals? Do you want to list your property on AirBnb?
Make a list and share it with your realtor. They’ll be able to tap their network and source reliable, trustworthy tenants.
However you envision your venture, it’s important to consider how each factor fits in with your overall investment, real estate, and life goals. Working with an established local realtor will ensure your priorities are met and your investment is successful.
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