Salt Lake City, Utah is one of the fastest-growing rental markets in the western United States. With a booming tech industry, high quality of life, and strong rental demand, it’s an excellent city for beginners to generate rental income. This guide explores the most effective rental strategies, legal requirements, and tips to help you get started as a real estate investor in Salt Lake City.
Why Invest in Salt Lake City for Rental Income?
- Fast-Growing Population: The metro area continues to grow rapidly due to tech migration and young professionals relocating for jobs.
- Low Vacancy Rates: High rental demand keeps occupancy rates strong across the city, especially in downtown and surrounding suburbs.
- Business & Tech Hub: Known as “Silicon Slopes,” Salt Lake City is home to many startups and tech companies fueling housing demand.
- Landlord-Friendly Regulations: Utah has favorable laws for landlords regarding evictions, lease terms, and security deposits.
Top Rental Income Strategies in Salt Lake City
1. Long-Term Residential Rentals
Buy a single-family home, duplex, or apartment unit in neighborhoods like Sugar House, Rose Park, or Glendale and lease it on 12-month terms. Long-term rentals offer steady cash flow and low tenant turnover.
2. Short-Term Rentals (Airbnb, Vrbo)
Downtown Salt Lake City, Capitol Hill, and The Avenues are hotspots for short-term rentals. These areas attract business travelers, skiers, and tourists. Be sure to comply with the city’s STR licensing and zoning regulations.
3. Student Housing
Salt Lake City is home to the University of Utah and Westminster College. Properties near campus — especially in East Central SLC — can be rented by the room for increased cash flow during the school year.
4. Corporate and Furnished Rentals
Fully furnished mid-term rentals near the hospital district or downtown appeal to traveling nurses, consultants, and remote workers staying 30–90 days.
5. House Hacking & Accessory Dwelling Units (ADUs)
Live in one part of a home (like a duplex or basement suite) and rent the other to help cover your mortgage. SLC has ADU-friendly zoning in some areas, ideal for building a backyard unit or converting a garage.
Legal Requirements for Landlords in Salt Lake City
- Business License: All landlords in Salt Lake City must obtain a business license through the city’s Revenue Division.
- Short-Term Rental License: Required for STRs (rentals under 30 days). STRs are allowed in specific zones and require conditional use permits in some cases.
- Zoning Restrictions: Not all areas allow STRs or ADUs. Check zoning maps and consult with the SLC Planning Division.
- State & Local Taxes: STRs must collect and remit:
- Utah State Transient Room Tax (TRT): 4.25%
- Salt Lake County Transient Room Tax: 0.5%
- Sales Tax: 6.85% (combined state and local)
- Lease Compliance: Landlords must comply with Utah landlord-tenant laws regarding security deposits, lease agreements, eviction notices, and repairs.
Estimated Monthly Costs for Rental Properties in Salt Lake City
| Expense Type | Monthly Estimate |
|---|---|
| Property Taxes | $150 – $600 |
| Landlord/STR Insurance | $50 – $120 |
| Maintenance & Repairs | $100 – $250 |
| Property Management (Optional) | 8% – 12% of rental income |
| STR Licensing & Tax Filing | $100 – $300/year |
Best Neighborhoods in Salt Lake City for Rental Income
- Sugar House: Popular with young professionals and students. High walkability and rental demand.
- The Avenues: Historic and upscale. Ideal for corporate and Airbnb rentals.
- Glendale: Affordable and in-demand among working-class tenants and families.
- Capitol Hill: Close to downtown, convention centers, and tourists — great for STRs.
- Liberty Wells: Up-and-coming with strong appreciation potential and stable tenants.
Tax Benefits for Salt Lake City Landlords
Although Utah taxes income (flat 4.65% rate), rental property owners can deduct many expenses to reduce taxable income, including:
- Mortgage interest
- Depreciation
- Property taxes and insurance
- Repairs and maintenance
- HOA fees and utilities (if paid by landlord)
- Legal and management expenses
Tips to Maximize Rental Income in Salt Lake City
- Verify Zoning & Permits: Always check whether STRs or ADUs are allowed before buying a property.
- Screen Tenants Thoroughly: Run credit, background, and income checks to reduce risk.
- Target Ski & Festival Seasons: STRs do best during ski season and conventions — price accordingly.
- Use Local Property Managers: They can handle maintenance, tenant screening, and compliance — especially helpful for remote investors.
Conclusion
Whether you’re investing in a student rental near the University of Utah, launching an Airbnb near downtown, or converting your garage into an ADU, Salt Lake City offers promising rental income opportunities. With the right strategy, legal compliance, and smart property selection, you can build a sustainable rental portfolio in one of the West’s most dynamic markets.
Need help with STR licensing, business registration, or tax filing in Utah?
Contact PEAK Business Consultancy Services — your reliable partner for launching and managing rental income properties in Salt Lake City, UT.
