Rental property investing in Utah: cash flow, taxes, and what to expect

The Utah setup, at a glance

Utah sits at roughly 0.58% effective property tax, which matters more than most new investors realize. On a $510k-$670k Salt Lake City property, that's about $2,958/year in taxes alone - call it $247/month before you've paid anything else. Run the rental cash flow calculator with that line item baked in or your projection will look better than reality.

Eviction stance here is landlord. Landlord-friendly. 3-day pay-or-quit, hearing in 7 days. Fast - often <30 days. That timeline directly affects your vacancy assumption: in landlord-friendly states like Utah, you can underwrite 5-7% vacancy on B-class properties; in slower states you'd want 8-10%.

Where the math actually pencils

Salt Lake City - $510k-$670k for typical SFR, $1,850-$2,400/mo for 2-3BR rents. tech + outdoor + Mormon-economy stability.

Ogden - $380k-$510k for typical SFR, $1,550-$2,050/mo for 2-3BR rents. SLC spillover, better cash flow.

Provo - $490k-$640k for typical SFR, $1,800-$2,300/mo for 2-3BR rents. BYU + tech corridor, young renters.

The 1% rule (monthly rent >= 1% of purchase) is a smoke test only, but it filters fast: a $490k-$640k property in Provo renting at the high end (2,300/mo) clears 0.8-0.9% in most cases, so you're already in the "needs the rest of the math to be tight" zone before vacancy + capex + management.

Utah-specific things that bite

Tight inventory has driven appreciation hard. Cash flow is rarely the play but population growth + landlord-friendly law makes it attractive.

A few cash-flow-killer line items that catch out-of-state buyers in Utah:

Property tax escrow. Lower than the national 1% average, but the homestead exemption you'd get as an owner-occupant doesn't apply to rentals.
Insurance. Standard hazard policies are still reasonable here, but ask about wind/hail riders depending on the specific zip.
PM costs. 8-10% of collected rent is typical. On a $1800/mo property that's $162-180/mo - works out to about a month of vacancy each year.

What "good enough" looks like in Utah

For a stabilized buy-and-hold in Utah, the rule-of-thumb deal targets most investors I see are:

Cap rate: 6%+ on the actual NOI (not the broker's pro forma). Below 5% and you're paying for appreciation, which is fine if that's your thesis.
Cash-on-cash: 8-10% minimum at year 1 with 20-25% down. 12%+ is solid for the work.
DSCR: 1.25+ if you're using a DSCR loan. Lenders increasingly want 1.2 as a floor, 1.25 to clear comfortably.
Reserves: 6 months of PITI. Even with Utah's fast eviction, you'll burn 1-2 months on turnover + repairs in a bad year.

The play that works here

Utah has tilted toward appreciation rather than cash flow in most major metros. Cash-flow seekers usually need to look at secondary cities or accept lower CoC for the appreciation thesis.

Run your specific deal through the rental calculator with the state's effective tax rate (0.58%), realistic Utah insurance quotes, and 8-10% PM. If it still pencils after that, you've got a deal.