If you are looking for a comprehensive guide to start flipping houses in the state of Utah, you’ve come to the right place.
Flipping houses is one of the best ways to get started investing in real estate. It might be a lucrative business venture. However, since it is a high-risk investment, you must take into account a number of factors.
But don’t worry, I’m here to help you with your research and decisions. This detailed guide breaks down market research, assessment, and techniques for flipping houses in Utah.
Flipping Houses in Utah
Utah has one of the hottest housing markets in the country. For house flippers, it’s a once-in-a-lifetime opportunity to make money. Despite the expensive housing market valuation, investors who choose the appropriate properties and flip houses in Utah win handsomely.
Houses in Utah are no exception to the rule that every investment, including real estate, is very niche and local area dependent. Paying attention to current market events and learning how to react swiftly can help you figure out whether you made a profit or a loss. To grasp the trends in these local markets and locate investment opportunities, you should always deal with a local specialized real estate agent. Their in-depth knowledge of the ins and outs of these specific housing markets may help you at every stage.
Related: Metal Detecting in Utah: A Comprehensive Guide 2022
Analyzing the Utah Housing Market in 2022
Utah is the 10th most expensive housing market in the US. Utah’s average house value is $574,570 as of April 2022, which is significantly more expensive than the national average home value of $344,000. Furthermore, house values in Utah climbed by a little more than 13.53 percent in 2021, and are expected to rise by a stunning 27.7% in 2022. These prices, on the other hand, vary even within the state, indicating how regional and localized housing markets are.
Utah’s housing market trend has attracted real estate investors from all across the country. Houses in Utah are in more demand than they are available. In Utah’s housing market, this has resulted in a strong seller’s market. It’s easy to see why investors are flocking to the real estate market in Utah. The rising population and improved employment and education sectors are two of the most important drivers of progress. Utah has a 92% high school graduation rate and a $72,000 median household income.
Utah’s nonfarm payroll employment expanded by 3.9 percent over the previous 12 months in April 2022, with the state’s economy creating a total of 62,400 jobs since April 2021. The state of Utah currently has 1,664,800 people employed. Overall, Utah’s job sector is likely to have another prosperous fiscal year.
Furthermore, Utah’s super expensive housing costs make houses less accessible to first-time homebuyers or investors. You’ll need more money to get started, which means there will be fewer novice investors and, as a result, less competition in this business.
How to know if the house in Utah is a good investment?
After studying Utah’s housing market and economy in general, you’ll most likely want to look into a more specific area and neighborhood to find possible homes. Keep in mind that not every local real estate market has the same kind of investment opportunities.
In general, a variety of factors go into assessing whether or not a property is a good investment. When you’re just getting started, avoid local marketplaces with a lot of inventory and postings that have been active for a long time. Houses in Salt Lake City, Utah, sell after an average of 41 days on the market. This means that if the house in the zone is still actively listed after 41-55 days, it is a no-go.
If the price of a house in Utah is less than the local market average, it is another sign that it is a good investment. Looking for houses that are significantly less costly than past sales in the region is one of the simplest ways to detect potential value. Remember that the less expensive homes will require significantly more changes than the more expensive ones.
How much should I pay for a house in Utah?
It’s usually a good idea to stick to the 70% rule when deciding how much to spend on a home in Utah. According to this rule, you should never spend more than 70% of the house’s after-repair value, less repair and renovation expenses. Let’s say you buy a house in Utah and want to spend $35,000 on repairs and remodeling. Keep in mind that upgrades raise the property’s market value. Let’s say your house is worth $600,000 after repairs.
According to the 70 percent rule, you shouldn’t have spent more than 70% of the after-repair value minus repair expenditures on this property. When you add up the numbers, it only amounts to $385,000.
It’s critical to keep in mind that the 70% rule is discretionary. It’s only an estimate of the house’s genuine worth. This rule aims to create a profit margin that is substantial enough to pay all other costs while flipping houses in Utah while still leaving you with a good profit margin.
Do you need a real estate license to flip houses in Utah?
In Utah, you don’t need a real estate license to flip houses. Getting both a realtor and a contractor’s license is typically a smart idea if you want to start flipping houses in Utah full-time.
It’s OK if you don’t want to cope with the difficulties of obtaining a real estate or contractor’s license in Utah. In this case, I strongly suggest you deal with a seasoned realtor and contractor with whom you can build a good working relationship.
Finally, locating a reliable contractor or repairman might be difficult if you are new to Utah. In addition, zoning regulations and requirements differ by city, and market trends change often. Working with a reputable agent or contractor might help you anticipate issues.
How to start flipping houses in Utah and make a profit?
Once you’ve done extensive research on the Utah housing market and are certain that the house is a sound investment, you’re ready to start your house-flipping journey in Utah. To start flipping houses in Utah and profit handsomely from this sort of real estate investing, follow these six steps.
1. Create a Budget and Secure Financing
The first thing to consider when flipping houses in Utah is your financial situation. It’s typically a good idea to perform the math before looking at potential qualities.
If you have cash on hand, you should already know how much money you have. By paying cash for your Utah house flips, you may avoid financing charges, mortgage payments, and any other closing expenses or fees. As a result, if you’re flipping houses in Utah and have cash on hand, you should always use it.
Taking out a loan or other forms of financing to buy and remodel a house might significantly affect your earnings. You’ll keep paying mortgage payments until the home is sold. Even if you took out a $600,000 loan to buy a house in Utah, a 10% down payment on a home might cost upwards of $60,000, to begin with. You’ll need to spend an extra $10,000 on top of the $35,000 for repairs and improvements.
Unfortunately, repairs and improvements take time. As a result, you may end up paying your mortgage for a longer length of time, perhaps resulting in a significant profit margin loss. Furthermore, you may not be able to earn any money after accounting for property taxes, building permits, utilities, marketing costs, closing fees, home insurance, broker commissions, and other expenditures associated with flipping houses in Utah.
As a consequence, having cash may help you save money on all of these things while also allowing you to keep as much of your earnings as possible.
But don’t worry if you don’t have any cash on hand. There are still a few more options for sustaining your house-flipping business on a tight budget.
2. Research the Cities and Neighborhoods
You may analyze the neighborhood’s desirability once you’ve located the properties that are listed below market value and taken into account other indicators such as active days on the market. When it comes to house flipping in Utah, the neighborhood’s quality is critical. In addition to the listing and sale price, other quantitative elements such as the quality of education, entertainment, parks and leisure, and the shopping experience in the area should be considered.
Existing housing stock in historic towns in Utah, as well as a quickly rising urban zone, may benefit from rehabilitation and repair. You may earn a good living flipping houses in Utah. However, you must learn to recognize suitable choices.
Here is a list of the 4 best cities to flip houses in Utah for 2022.
Flipping Houses in West Valley City, UT
West Valley City is one of the biggest cities in the state of Utah. This city is composed of 9 neighborhoods and offers multiple affordable duplexes, townhouses, and affordable multi-family homes. As of April 2022, the median listing price for houses in West Valley City was just $450,000, trending up 25% year-over-year. The median listing price per square foot was $229.
The city offers 63 public schools rated good or higher by GreatSchools and 7 private and charter schools. West Valley City also offers hundreds of grocery stores, restaurants, and cafes. For a healthier lifestyle, there are also many beautiful parks and gyms in West Valley City.
Of the 9 neighborhoods in West Valley City, Woodhaven is the most expensive one, with a median home price of $472,400. On the other hand, Chesterfield is the most affordable neighborhood, with a median listing home price of just around $360,000. There are also some other great neighborhoods, like West Granger, Hunter West, and East Granger.
Flipping Houses in Salt Lake City, UT
Salt Lake City is the capital city of Utah. It is composed of 37 neighborhoods and offers multiple affordable duplexes, townhouses, and multi-family homes. As of April 2022, the median listing price for houses in Salt Lake City was $549,000, trending up 20.6% year-over-year. The median listing price per square foot was $318. Furthermore, on average, houses in Salt Lake City sell after 41 days on the market.
The city offers 67 public schools rated good or higher by GreatSchools and 19 private and charter schools. Salt Lake City also offers hundreds of grocery stores, restaurants, and cafes. For a healthier lifestyle, there are also many beautiful parks and gyms in Salt Lake City.
Out of the 37 neighborhoods in Salt Lake City, Yalecrest is the most expensive one, with a median home price of $1,100,000. Conversely, Jordan Meadows is the most affordable neighborhood, with a median listing home price of just around $350,000. There are also some other great neighborhoods, like Liberty Wells, The Avenues, and Poplar Grove.
Flipping Houses in Provo, UT
Provo is a city in Utah that consists of 34 neighborhoods and offers multiple affordable duplexes, triplexes, and multi-family homes. As of April 2022, the median listing price for houses in Provo was $428,000, trending up 17.1% year-over-year. The median listing price per square foot is $267.
The city offers 38 public schools rated good or higher by GreatSchools and 6 private and charter schools. Provo also offers hundreds of grocery stores, restaurants, and cafes. For a healthier lifestyle, there are also many beautiful parks and gyms in Provo.
Of the 34 neighborhoods in Provo, Sherwood Hills is the most expensive, with a median home price of $969,300. On the other hand, Rivergrove is the most affordable neighborhood, with a median listing home price of just around $250,000. There are also some other great neighborhoods, like Joaquin, Maeser, and Franklin.
Flipping Houses in West Jordan, UT
West Jordan is a city in Utah and is composed of 17 neighborhoods. It offers multiple affordable duplexes, townhouses, and multi-family homes. As of April 2022, the median listing price for houses in West Jordan was $520,000, trending up 31.3% year-over-year. The median listing price per square foot is $235.
The city offers 48 public schools rated good or higher by GreatSchools and 5 private and charter schools. West Jordan also offers hundreds of grocery stores, restaurants, and cafes. For a healthier lifestyle, there are also many beautiful parks and gyms in West Jordan.
Of the 17 neighborhoods in West Jordan, Copper Hills is the most expensive one, with a median home price of $647,500. On the other hand, Prairie-Park is the most affordable neighborhood, with a median listing home price of just around $401,300. There are also some other great neighborhoods, like Westbrook, Oquirrh Point, and East River.
3. Assemble your team
Whether you’re flipping houses full-time or part-time in Utah, you’ll need a crew to make each flip a success. There will very probably be a need for a real estate lawyer, a lender, a real estate agent, a general contractor, a few laborers, and an accountant.
If you want to make house flipping a regular part of your investment strategy, working with a trusted team rather than a new specialist for each job is also a good idea.
4. Select and Purchase your Utah House
After you’ve sorted out your finances and assessed whether or not it’s a good investment, it’s finally time to buy your Utah home. Another thing to keep in mind when purchasing a home is that homes that require more upkeep and maintenance are typically less expensive to purchase. As a result, reselling them will be more time-consuming.
Houses in good condition that do not require extensive repairs and modifications, on the other hand, are substantially more costly. If you invest more money upfront, you will save a lot of money in the long term and will not have to worry about home upgrades.
As a result, while shopping for a home in Utah, aim to strike a balance between these concerns. Choose a house that fits your needs, price, and timeline.
5. Repair and Renovate the House
Consider the cost of repairs and improvements, as well as the time it will take to complete them. Determine which improvements will add the greatest value and if they will appeal to prospective purchasers. For homeowners who wish to escape the hot and humid Utah summers and severe Utah winters, adding air conditioning and energy-efficient upgrades to a property may quickly boost its value.
Furthermore, power washing the exterior of the house, painting the inside, repairing a leaking faucet, reglazing and caulking bathtubs, and cleaning the floors are all minor but necessary tasks that will help your home sell faster.
6. Resell the Renovated Utah House for a Profit
After you’ve completed mending and restoring the house, it’s time to re-list it. In Utah, you have two alternatives for reselling your house. Selling as a for-sale-by-owner (FSBO) is the first option while selling through a real estate agent is the second.
One of the many advantages of selling your house without the assistance of a real estate agent is the cost savings on commissions. Even if you sell your Utah home on your own, you must pay a fee to the buyer’s agent (3 percent ). If you want to sell your home quickly, you’ll need to be prepared to haggle like a pro and fill out all of the paperwork appropriately.
You may always employ a professional real estate agent if you don’t want to deal with the inconvenience of selling your house yourself. The process of creating, debating, signing, and closing contracts will all be streamlined. You will, however, be compelled to pay them a charge of 3% for their services.
How much money do house flippers make in Utah?
The average revenue per flip in the United States is $60,000, whereas it’s around $73,000 in Utah. As a result, the average revenue per flip in Utah is just $13,000 higher than the national average. To put it another way, it makes sense. Affordable housing and a rising standard of living in this state attract a large number of real estate investors, resulting in increased resale value per flip.
It’s also important to remember that revenue per flip isn’t the same as net profit. You’ll also want funds for repairs and restorations. A wide range of repairs may be necessary depending on the current state of the house. But if you invest $30,000 in repairs, you’ll have a net profit of $25,000 to $30,000 to deal with after subtracting all additional fees and levies.
As a result, it’s normal to expect to make at least $25,000 from flipping a single house in Utah. Furthermore, the typical real estate investor flips four houses each year in Utah. That means you can expect to make around $100,000 per year if you flip houses full-time in Utah.
Overall, flipping houses in Utah is a great way to get started in real estate investment. Utah is one of the most profitable states for flipping houses. It is rapidly developing and has a lot to offer for both long-term and short-term real estate investors. Furthermore, finding profitable flips in the Beehive State requires a combination of your talents, competence, and luck. If you find a great deal on a house in Utah, make sure you follow a well-thought-out strategy, remodel the house if necessary, and sell it to a high-end buyer.