Investing In Draper
With almost the highest ownership rate in the state, Draper is one of the hottest cities in the last decade with explosive growth and demand to be close to both downtown Salt Lake as well as Silicone Slopes and Utah County cities such as Provo/Orem.
Draper is known to have one of the highest median house prices in the area. This can deter investors from investing in this area since the homes are typically larger and the rent is less than ownership costs, which means a lower return on investment.
New developments of townhomes and smaller single family homes provide the best strategy, along with a long term hold for above average price appreciation. The Utah State Prison is relocating in 2022, which will open up more than 600 acres of prime real estate for mixed use in the Draper and Bluffdale area.
Investors should look for opportunities and approach a buy and long term hold strategy.
- Exceptionally ranked schools
- Affluent Community
- Lower than average crime rate
- Future growth
- Higher median house cost makes housing affordability a challenge for most
- CAP rate (investment rate of return is lower than other areas)
- Traffic congestion along I-15 at rush hour
Overall Draper Investment Rating
Investing In Saratoga Springs
As a city with one of the highest home ownership rates in the state, Saratoga Springs has much opportunity for future growth.
The city is anticipated to expand to more than 5x its current size. New commercial construction, schools and infrastructure projects were recently completed; with more planned. Increased job growth and additional expansion is projected over the next decade.
The landlocked geography helps home values appreciate as the scarcity of land becomes greater and more vacant land is developed. Parts of the city will need expensive water systems to develop future development which could increase the cost of living.
Our investment advice is to cautiously explore areas and development while focusing on single family homes with a 5-15 year buy, hold and re-evaluate strategy.
- Convenient access to metro areas
- Strong demand for housing with scenic setting
- Future job growth, new infrastructure and business development planned.
- Lower than median home price compared to surrounding areas
- Growth related issues for the next few years - traffic and infrastructure
- Schools are newer with larger classroom sizes
- Slightly higher percentage of rentals vs homeowners in certain locations
Overall Saratoga Springs Investment Rating
Investing In Riverton
There was a time that the city council and planning was opposed to creative planned developments that would make more affordable housing. Some residents along with leadership want to see large lots - ½ acre or larger to preserve the rural feel and heritage.
In the late 1990’s and early 2000’s the city approved several developments of townhomes and higher density developments and most recently approved large apartment complexes to lure development away from Herriman and South Jordan which has seen explosive growth.
Today, Riverton has a diverse housing market from established homes that sit on ⅓ acre or larger along with newer builds which favor higher density housing. Since Riverton is landlocked, little large parcels remain to be developed.
Investors should be cautious to invest in single family homes that have large lots which create an ongoing maintenance expense for rentals and may lower cap rates. However the average income for the area is one of the highest in the area and the proximity to an east/west corridor and freeway system make it appealing.
- Average income high
- Low crime rate
- Convenient access to metro area
- Rural feel
- Cap rate (investment rate of return) may be lower than other areas
- Schools are aging and rated slightly above average
- Few retailers and more B Class commercial space
Overall Riverton Investment Rating
Investing In Sugarhouse
With the renovation and revitalization of one of the most sought after areas, the SugarHouse area is an area that what we like to say is just one business district away from the downtown area.
Demand for housing in this area is strong with University of Utah and Westminster College nearby along with access to freeway and city life.
Many homes are a little older and investors should be cautious about paying too much for a property in a hot market. Investors that see potential and are willing to invest into long term capital improvements into the property will continue to see appreciation long term.
- Local community amenities
- Proximity to Higher Education
- Redevelopment area
- Housing Affordability
- CAP rate (investment rate of return) is lower than other areas
- Higher CAPEX (Capital Expenditures may be required)