When you watch the sun swing low and cast its radiant glow across the red cliffs of St. George, UT, you’ll understand why it’s one of the state’s fastest growing cities. It’s a truly spectacular place to call home, but for real estate investors, there’s more to St. George than wild natural splendor. There’s an opportunity to stake your claim in a market that offers amazing potential.
It only takes a quick glance to recognize that potential, but if you’re serious about investing in St. George rental properties, you’re going to want to take a long, hard look. From exploring the local market to running the numbers, here’s what you need to know about buying rental properties in St. George UT.
Start With the Stats
It’s easy to look at the facts and stats surrounding St. George, UT and get excited about the possibilities. The U.S. Census Bureau ranked it fifth among the nation’s fastest-growing metro areas this year. That growth has led to increased demand for housing, which includes both home sales and rentals. The population of St. George has risen by at least 3% each year for the last four years and has added over 44,000 new residents in the last decade. That’s a lot of people who need a place to live, and those numbers show no signs of slowing down.
St. George also has a low cost of living, a crime rate well below the U.S. Average, an abundance of quality schools, and an expanding job market. It’s a stone’s throw from Snow Canyon State Park, Red Cliffs National Conservation Area, and Zion National Park. To really get a feel for what makes a good investment in St. George, you have to go beyond the stats.
Get to Know St. George
Just like any city, location is a huge factor in determining the quality of a real estate investment in St. George. The first question you should ask when you look at a rental home for sale in St. George is, “where is it located?” A property in the Entrada neighborhood is very different from one in Bloomington Ranches, for example. While it’s nice to put boots on the ground and get to know the city firsthand, that isn’t always possible, so it’s best to work with a real estate agent that offers the ability to look more closely at a city like St George. (Ahem, like Homie!)
One of most important steps when you investigate a potential rental property is to check out similar properties in the same neighborhood. Take notice of the types of rental properties nearby and how much they rent for, but don’t neglect another important detail: vacancy rates. If you see high vacancy rates, it could just be part of a seasonal cycle, but it could also reflect a neighborhood in decline. It’s important to know which it is! For what it’s worth, the future of the St. George market, much like the rest of Utah, looks very promising.
Identify Your Ideal Renter
Knowing you want to buy a rental home in St. George is all well and good, but do you know who you want to rent to? Deciding on your target audience will steer you in the right direction when you’re trying to choose between different properties, and will also help you focus your marketing when it comes time to fill your property with renters further down the road.
Many top property investors consider vacation rentals to be where the money is in St. George. With an abundance of state and national parks in the immediate vicinity, and nearby opportunities for hiking, cycling, skiing, rock climbing, and boating, St. George is a major hub for vacations and adventures. It doesn’t hurt that Las Vegas is just a short drive away. Plus, St. George is increasingly being seen as a city with a lot of great retirement potential, which is creating a growing opportunity to rent to seniors.
The city also has a growing range of employment and occupations, which is partly behind its rapid population growth. All those new people have to live somewhere, so there are great opportunities to invest in full-time rentals as well as vacation properties. Whichever path you choose, you need to look for properties that have the types of features and amenities that would appeal to your target demographic.
Know What Makes a Good Investment
St. George real estate offers endless opportunities to make a killing—it was recently named by GOBankingRates.com as the best place in Utah to buy a vacation rental—but it’s important to understand that not every investment is a good one. How do you identify the rental property that has the greatest potential to bring in a high return on investment?
It depends on some of the factors we’ve already discussed, like location and amenities, but even if you find what looks like the perfect investment, you still need to run some numbers before you make the leap.
There are a lot of terms and equations real estate professionals use to figure out if a property might be a good investment. One of the simplest is what’s known as the one percent rule. This rule essentially states that a property has to rent for at least 1% of its purchase price every month to be profitable. So if a property costs $200,000, you need to get $2,000 in rent every month. This shouldn’t be your only consideration, but it’s a good starting point. If a house doesn’t at least meet this criteria, then it’s usually best to move on and look elsewhere.
Don’t Go It Alone
It’s easy to feel lost and overwhelmed while exploring rental homes for sale in St. George, UT. With so many options, it’s possible to let your real estate fears get the best of you. Since buying any property is a huge investment, you should always be able to rest easy knowing that you’ve made the best decision. It helps to work with a team of real estate pros who can bring years of experience and an in-depth understanding of the local real estate market to the table. That’s where Homie comes in.
The Homie team has a passion for home buying and selling and a commitment to saving you money and helping you make the smartest real estate moves. Contact us today to learn more about how it works, and let Homie help you find the perfect homes for sale in St. George.
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