Salt Lake #3 for Lowest Rents in Western Region

Provo Faces Price Decline Risk in 2025; Salt Lake City 16-Unit Listed for $250k/Unit; Logan Triplex Sells for $136/unit.

Author

David Robinson
February 19, 2025

Featured Listings

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Canovo Group may not be the listing brokerage for the above properties. The information provided is not guaranteed and should not be relied upon to make investment decisions. Buyers should complete their own analysis and due diligence before making any investment.

Utah Market Snapshot

> Multi-Unit (2+ Units) - YTD Median Sold $/SqFt and Total Sold

Multi-unit property sales have had a slow start this year, totaling only 7 sales—a decrease of 18% compared to the same period in 2024. While it's early in the year, this decline is noteworthy and worth monitoring. Additionally, the year-to-date median sold price per square foot has decreased from $261 to $243, marking a 7% decline from the same period in 2024.

> Single Family - YTD Median Sold $/SqFt and Total Sold

Single-family property sales have also started slowly this year, totaling 3,679 sales—a decrease of 9.5% compared to the same period in 2024. While it's early in the year, this decline is noteworthy and worth monitoring. In contrast to multi-unit properties, the year-to-date median sold price per square foot for single-family homes has increased from $226 to $233, marking a 3.5% rise from the same period in 2024.

Sold Multi-Unit This Week

Rates & Financing

> Mortgage Rates as of 2/18/2025

Deal Review

> Provo 18 Units

  • 18 Units

  • Built in 1970/2003

  • 14,550 Square Feet

Listing price: $4,370,000

Underwritten purchase price: $3,200,000

For now, this deal is overpriced. The Y1 cap rate is 5.22% with a $4.37m purchase price. In order for this project to achieve a levered IRR of 16.5%, the purchase price would need to be closer to the $3.2m.

Key assumptions:

  • Unit renovations of $6k/unit to all 18 units

  • Rent premium of $100/unit for all units (payback period of 5 years)

  • Renovation timeline of 1 year

  • Exit cap rate of 6.22% per submarket data from Costar

  • Expense ratio of 32%

5- Year Hold Return Projections: 

  • Levered IRR: 16.5%

  • Levered Equity Multiple: 2.03x

  • Average Cash-on-Cash: 6.53%

  • Net Profit: $1,265,439

Underwritten By:

For any underwriting needs, contact Tyler at [email protected] or message him on LinkedIn

Headlines & Insights

Featured Story

Out of 14 major West region markets, only five—Las Vegas, Phoenix, Salt Lake City, Portland, and Denver—have rents below the U.S. average of $1,818 per month. These cities offer a more affordable alternative to pricier markets like San Francisco and San Jose, with Salt Lake City in Utah standing out for its competitive rental rates.

Main takeaways:

  • Las Vegas leads the West with the lowest rents at $1,439 per month, setting a trend for affordability.

  • Salt Lake City, Utah, registers rents at $1,514, marking it as one of the few West region markets with prices near or below the $1,500 mark.

  • Other affordable markets include Phoenix, Portland, and Denver, where recent rent cuts have helped pull prices below the national average despite significant increases over the past decade.

What this means for Utah investors:
Utah investors can take advantage of Salt Lake City's competitive rental market, where affordability meets steady demand. This balance may lead to reliable rental income and long-term property value growth, making Salt Lake City an attractive option for diversifying local real estate portfolios.

More News & Reports

Utah

Provo Faces Price Decline Risk – CoreLogic projects a 70%+ chance of falling home prices in Provo, UT—the highest risk among five Sun Belt markets including Tucson, Albuquerque, Phoenix, and West Palm Beach—amid cooling demand and rising inventory, even as national prices grow modestly.

Salt Lake Rent Drops – The median asking rent in Salt Lake City fell 6.5% year-over-year to $1,476, ranking fourth in the nation for rent declines. Redfin attributes the drop to increased supply and reduced demand, but warns rents could rise again as construction slows.

National

Mortgage Market Shake-Up? – If Fannie Mae and Freddie Mac are privatized, experts warn that mortgage rates could rise by 60-90 basis points due to the loss of government backing, though some suggest increased efficiency might lower rates. This shift could fundamentally alter the U.S. mortgage finance system and impact homebuyers and taxpayers alike.

Builder Confidence Dips – Builder sentiment hit a five-month low at 42 in February amid rising tariffs, high mortgage rates, and escalating housing costs, resetting 2025 expectations and slashing sales incentives.

Cash is Losing Its Clout – Only 32.6% of U.S. home purchases in 2024 were made with cash, marking a three-year low as investor activity declines, though cash deals still exceed pre-pandemic levels.

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David Robinson

Principal Broker/Managing Partner

Whenever you’re ready, there are a couple of ways I can help you:

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