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Should I buy this house as an investment property? Part 3
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In other markets, buying with the intention to rent makes sense. You have to look for a good price/ rent ratio. Today, in 2005, the Salt Lake area in Utah is such an area.
Some interesting demographics about Salt Lake valley:
- Only 6% rental vacancy rate. I bought a place there and rented it out in the first week
- You can buy a house for $150,000 and get $995 in monthly rent. You can break even immediately, even if you have use a property management company (who may take $100 a month from you)
- People in Salt Lake have good family values (as opposed to Las Vegas) and you have a better chance to find long-term renters. This is a bit of a stereotype but I've got rental properties in both towns and so far the stereotype has been confirmed.
- High-tech companies settling down in West Valley City, the biggest development in Salt Lake. They want to capitalize on the lower cost of living there. The population has been growing steadily for 20 years.
- Salt Lake City or the greater Salt Lake area are in a valley surrounded by mountains and the lake, so there is some natural limit how much the city can grow. In the long-term you might even see some nice appreciation. Don't expect the 10 or 20% numbers of the Bay Area or Las Vegas, rather enjoy a steady 7% year after year.
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