Renters in downtown Salt Lake City may have more choices for properties due to an increasing number of apartment projects, but rents are also on the rise.
The boom in apartment construction stems from more people moving into the downtown area, according to Kip Paul, executive director of investment sales for Cushman Wakefield Commerce. The growing demand for apartments has caused a 6.5% increase in rents over the course of 2016, Paul said.
Paul noted that the increase in rents last year is on top of rental growth of up to 5% in the last seven or eight years. As of mid-September, as much as 6,500 units are being constructed in Salt Lake County. Despite some units being marketed on the low-priced range, some renters believe that there no such properties.
These renters have struggled with the decision to find a cheaper place that is farther away from work or a more expensive unit yet closer to their jobs. Despite the situation, renters in the city still pay more affordable rates compared to their counterparts in Denver, Phoenix and Los Angeles, according to Paul.
By 2020, there would be an additional 10,000 units in Salt Lake City, although the question remains if these will be affordable. The high price of rents could be a good reason to buy a house instead. American Loans notes that first-time buyers, in particular, should apply for a mortgage in Salt Lake City to help with their financing options.
Property developers also recognize the need to build more low-cost apartments. These companies work with private investors and state funding to earn tax incentives for developing affordable units, according to Paul.
As rents in downtown Salt Lake City increase, it may make more sense to buy homes now. Homebuyers, especially first-timers, should consider financing options to help with their home purchase.