For a few years, being a landlord in Utah was straightforward. Rents climbed fast, vacancies stayed low, and almost any property in a growing corridor cash-flowed without much effort. That phase is over. The market has shifted, and investors who are still operating as if it's 2022 are running into problems that didn't used to exist.
That's not a reason to stop investing. It's a reason to invest differently.
Here's what the current picture looks like and what we're seeing experienced investors do in response.
What actually changed
Apartment building permits in Utah hit 9,683 units in 2025; more than double the number issued in 2024 and the third-highest total on record. More supply means more competition for tenants, which means vacancies that used to fill in a week now take longer, and rent increases that used to stick are getting pushed back.
The current vacancy rate in Utah's rental market sits at approximately 6.9%, with projections showing stabilization toward 6% by 2028. That's not a crisis; but it's a different environment than 2021 when landlords had waiting lists.
At the same time, high financing costs, rising material and labor expenses, and zoning constraints are limiting new home construction, which keeps buyer inventory constrained and continues to push potential buyers toward renting. Demand is still real and structurally supported. The challenge is on the supply and rate side, not the demand side.
The interest rate problem and what investors are doing about it
The biggest constraint for investors right now isn't demand; it's deal structure. A typical home in Utah sells for around $500,000, which means a buyer with a traditional mortgage at today's rates is paying roughly $15,000 more per year in interest than someone who locked in at 3%. That gap makes a lot of deals that would have penciled two years ago not pencil today.
The investors working around this are looking at structures that don't start from a conventional loan:
Seller financing is the most straightforward. When a seller owns a property free and clear or has significant equity, they can carry the note directly; flexible terms, negotiable rates, reduced closing costs, and no bank underwriting. In a high-interest environment, seller financing has regained popularity because it allows for more flexible terms, reduced closing costs, and lower barriers to entry for buyers, while enabling sellers to attract more interest and earn interest income over time.
Subject-to deals let a buyer take title while the seller's existing mortgage stays in place, including the seller's interest rate. In today's market, a buyer who can take over a seller's 3% mortgage saves roughly $15,000 per year compared to financing at current rates. Subject-to requires careful documentation, an attorney experienced in the structure, and a refinance plan in case the lender ever calls the note; which is rare on performing loans but a real risk to understand in advance.
Loan assumptions on FHA and VA loans are another option worth exploring. These loans are assumable with lender approval, meaning a buyer can take over the seller's rate and terms. The process takes time and the lender has to approve the transfer, but for the right property and seller, the math can work significantly in the buyer's favor.
What the smart buy-and-hold play looks like right now
Single-family rentals and well-located small multifamily properties may outperform larger complexes in oversupplied areas. In 2026, disciplined acquisitions paired with professional management can deliver steady income without relying on aggressive appreciation assumptions.
The investors doing well in this environment are underwriting conservatively; using current rents, not optimistic projections, and running expense ratios at 40-50% of gross rather than the 30% some sellers' pro formas show. They're stress-testing deals at today's interest rate, not a hoped-for future rate. And they're focusing on locations with sustained employment growth: Lehi's Silicon Slopes corridor, areas near the planned Mountain View Corridor extension, and corridors where The Point's development at Draper will expand access.
Rental demand in Utah remains strong due to population growth and limited affordable ownership options, supporting buy-and-hold strategies in areas with strong employment and rental market fundamentals.
The market didn't break. It normalized. The investors who adapt their strategy to what the market actually is right now — rather than what it was in 2022 — are still finding deals worth doing.
If you're an investor evaluating properties in Utah County and want to talk through the numbers on a specific opportunity or structure, reach out to Foundry Group.
FAQ
Is now a good time to invest in Utah County rental property?
Yes, with adjusted expectations. The high-growth rental environment of 2021-2022 has normalized, but structural demand drivers remain strong: population growth, high home prices pushing buyers toward renting, and limited new ownership-priced inventory. The key is underwriting conservatively at current rates and current rents rather than projecting the growth rates of prior years.
What is seller financing and how does it work in Utah?
Seller financing is when the property owner acts as the lender, allowing the buyer to make monthly payments directly to them rather than to a bank. Terms including interest rate, down payment, and loan length are negotiable. It works best when the seller owns the property free and clear or has significant equity, and is particularly valuable in a high-interest-rate environment because the rate is set between buyer and seller rather than by a bank.
What is a subject-to deal in real estate?
A subject-to deal is when a buyer takes title to a property while the seller's existing mortgage stays in place, including the original interest rate. The buyer makes payments on the seller's loan without the loan being refinanced or transferred. This allows a buyer to inherit a low historical rate. It carries real risk — most mortgages have a due-on-sale clause allowing the lender to call the loan if title transfers — so proper legal documentation and a refinance plan are essential.
Are FHA and VA loans assumable in Utah?
Yes. FHA and VA loans are generally assumable with lender approval, meaning a buyer can take over the seller's existing loan including the interest rate and remaining term. The assumption process requires lender approval, takes time, and isn't guaranteed — but for sellers who have these loan types with low rates, assumption can be a meaningful selling advantage and a significant benefit to the right buyer.
What vacancy rate should investors plan for in Utah County right now?
Utah's current rental vacancy rate is approximately 6.9%, with projections toward 6% by 2028. Investors should budget for slightly longer vacancy periods than the peak years of 2020-2022 and run their numbers at realistic market rents rather than optimistic projections. A 5-8% vacancy assumption and a 40-50% expense ratio are reasonable conservative inputs for underwriting in the current environment.
Which areas of Utah County have the strongest long-term rental demand fundamentals?
Lehi, driven by the Silicon Slopes tech employment corridor, has sustained rental demand from a workforce that earns well but faces high ownership costs. Saratoga Springs and Eagle Mountain attract family renters priced out of core cities. Areas along the planned Mountain View Corridor extension and near The Point development in Draper will see increased access and employment draw over the next several years, supporting long-term demand in north Utah County.
