How Listings and Vacancies Impact Salt Lake City Rental Property ROI

Most property investors agree that searching for the ideal property is an important task, but one that isn't always easy. There are plenty of factors to consider when choosing an investment property, with some being more obvious than others. 

Most investors realize the importance of a property's neighborhood when selecting a potential home to use as a rental property. However, the wrong neighborhood could ruin your ROIs! Additionally, investors look at the crime rates, property taxes, and more when making their decision. 

One neighborhood factor that might not come readily to mind is the number of vacancies or listings in a given neighborhood. When considering an investment property, understanding how the listing and vacancy data affect a community and your potential returns is vital for selecting the ideal investment.

The best property management Salt Lake City offers can assist you with securing a property that pumps out decent ROI by assessing all critical factors. Today our advisors have more details about how the number of listings and vacancies play a role in rental property investment success.

Looking at Neighborhood Trends

As you start your search for an investment property, keep your eyes open for anything that stands out in the real estate listings data. In other words, look for trends because this can give you an important clue as to what is happening in that neighborhood.

Left Facing For Rent Real Estate Sign In Front of HouseWhat type of trends do neighborhood listings experience? For example, you may see an ongoing trend of many properties for sale in the same neighborhood. Or you could see the opposite—several vacancies in a community with no one showing interest. You could also notice your real estate map has clusters of sales in one area or frequent turnover in another area. 

What does it all mean for your potential return on investment? Here's what to keep in mind. 

The Significance of a High Number of Rental Listings

What does it mean if you see several rentals available in one neighborhood? Typically, this could indicate one of two things:

  • A high number of available home rentals could be due to a seasonal cycle. For example, if the home is near a college, you might see many more vacancies during the off-season.
  • A high number of rental listings could also indicate that the neighborhood is declining. If businesses are closing or crime rates are increasing, these could be crucial reasons why a community takes a downward turn.

Property investors may see a change in rental and or property prices when high vacancy rates exist. A high number of rentals can cause an imbalance in supply and demand. This may force property owners to decrease the rent to be more competitive. Since the area is flooded with more rentals, this trend often reduces rental prices.

How a Low Number of Rental Listings Affect the Market

As you investigate other neighborhoods, you may notice some have a minimal number of listings, indicating a shortage of rentals or available homes. What could this indicate? For one thing, it could mean the neighborhood is hot, and properties are renting and selling fast.

As you can imagine, low vacancies mean the supply is limited, which increases demand. The more demand you have for houses in a neighborhood, the higher the prices.

Sorting It All Out

Now that you know some of the causes of high or low rental listings and how it affects vacancy rates (and potentially the price), you can take the appropriate steps to ensure you seek out the best areas to find rental properties that help you meet your ROI goals. 

Should you avoid the areas with many listings, or should you seek out places with low vacancies? Or should you swoop in on the area with a high number of listings and get properties for less money? The answer is complex because every property investor has varying needs. Weighing the pros and cons of your specific situation and working with a property manager will help you make the best choice.

New empty room with beige carpetIn many cases, it's smart to vary your investment portfolio. However, it's critical to do plenty of research when considering properties in areas with high vacancy rates to avoid challenges with finding good renters to deliver consistent rental payments every month.

As long as you have a thorough tenant screening process in place and quality rental properties, you'll experience better resident retention and ROIs!

"Property Managers Near Me" Help Investors Analyze Potential Properties

By searching "property managers near me," you'll discover the right experts to help you analyze vacancy rates and listing data when choosing a new rental property. You can also reach out to the best Salt Lake City property management company by contacting the experts at Reeder Asset Management! Our team is familiar with the area and can help you maximize ROI by identifying potential properties that deliver the returns you need. Learn more about our property management services when connecting with our team!

What does an ideal rental property look like? Find out with a free copy of "The Biography of the Perfect Investment Property."

Perfect Investment Property

Posted by: Reeder Asset Management on June 23, 2022