When you consider the rental market, a few things might come to mind: Students, young professionals just starting their careers, and young families saving up for their ‘forever home.’ Traditionally, rental properties provide housing options for those not yet ready or able to take on the responsibility or cost of homeownership. 

On the flip side of that, you have property owners, who traditionally own rental properties as a way to generate income. These individuals are often looking for good opportunities to own real estate in residential areas. 

However, it also wouldn’t surprise you to note that vacation-centric cities–Park City included–are also popular for investors as well as both short and long-term renters looking to live or visit an exciting area without owning real estate there. 

Let’s take a closer look at whether or not Park City is good for investors. 

You’re Not Buying an Investment in Park City, You’re Buying a Lifestyle 

We say this all the time in our office, that we don’t actually sell investments (in fact, according to SEC regulations, we aren’t allowed to.) We sell a certain quality of life. The lifestyle in Park City is hands-down the biggest reason to buy real estate here. Between the laid-back ambiance, incredible natural wonders, and exciting outdoor activities and events right at your doorstep, the number one reason homeowners come to Park City is to soak it all up. 

However, the added benefit of owning property in Park City is the fact that it’s a valuable investment that can pay dividends in the form of rental income and value appreciation. Many homeowners in Park City live here on a part-time basis, and as a result, they can make use of their homes on the rental market when they aren’t living in them. 

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Discover the Park City lifestyle we’re talking about it in these blog posts next:

• Why Park City is the Best Mountain Town to Live In
• 7 Undeniable Reasons to Call Park City Home
• Deer Valley Vs. Park City: What Homeowners Need to Know

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Second Home Vs. Vacation Rental Vs. Primary Residence 

In Park City, we have a variety of property types. There are vacation properties, also known as resort properties, where the majority of the owners come to the city for recreational purposes. These properties are often a great candidate for vacation rentals since most owners are not spending extended periods of time there. 

As an owner, renting your vacation property would see seasonal highs and lows, and there could be a chance that your property spends some time vacant if you aren’t there.

Second homes are also popular in Park City. These homeowners may spend weeks or even months here and typically have remote jobs where they can work from home.

There are also many primary residences in Park City for people who live here full-time. If your intention is to own an investment property and rent it out to a local tenant for year-round rental income, this would be your option. 

Learn more about the best neighborhoods for Park City’s permanent residences right here.

Is Park City Real Estate a Good Investment? 

We are real estate agents, not financial advisors, so please seek professional advice before making any financial decisions unique to your situation. However, we can confidently say that, in general, real estate is a solid investment. 

It is widely considered to be a “safe” investment because it appreciates slowly over time. Compare that to say, the stock market, which is considered to be more volatile, and could offer higher returns but more risk. 

For example, if we look at the long-term trends in real estate prices in Park City, we can see that over the course of the past three years, home values have increased considerably. 

According to data from Realtor.com, the median home price in August 2020 was $1,249,000. Over the course of the past three years, there have certainly been month-over-month ups and downs in the market, but the most recent data shows the median price in Park City at $2,290,000 for July 2023. That’s an increase of about 83% over three years.

As a homeowner in Park City, you are simultaneously growing your wealth as you pay down your mortgage and as property values go up. That’s called building equity!

It’s also important to note the impact that the pandemic has had on long-term real estate data, but the fact remains that historically, real estate is a long-term stable investment.

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Curious about buying real estate in Park City? Read these posts next:

• Why Buy a Luxury Condo in Park City
• Benefits of Owning a Vacation Property in Park City
• A Pet Owners Guide to Moving to Park City

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Benefits of Owning an Investment Property in Park City 

So, if owning a home in Park City is all about the lifestyle, and just by simply owning your home and paying your mortgage you are building wealth through equity, why would you need to also rent it out? 

Here are some of the main benefits of renting out your investment property in Park City:

• The rental fees you charge can cover much of the carrying costs for the property. For example, HOA fees, taxes, home maintenance, etc. 
• You can deduct expenses like maintenance and  interest on your mortgage from your taxes.
• Depending on your unique circumstances, you could also potentially reap these tax benefits for a short-term vacation rental, too. 
• There is also something called a 1031 exchange where you can sell your investment property and invest in a similar investment property while being shielded from capital gains taxes. Again, please consult an expert about your unique circumstances.

Challenges of Owning an Investment Property in Park City 

While owning a rental property in Park City might seem like a no-brainer, there are a few considerations you should make before diving into the investing world: 

• You should be prepared to be a “landlord.” This means you or a property management company you hire should be prepared to screen tenants, collect rent, and perform all the other necessary duties such as maintenance and repairs for your tenants. 
• Although real estate is considered to be a relatively safe investment, it is not a “liquid asset.” This means that if you need to free up some capital, you’ll need to sell the property, which could present its own set of challenges. 
• Not all Park City neighborhoods allow short-term rentals. If your plan is to buy a home in Park City with the intention of renting it out, you’ll need to understand the unique regulations in each area before buying. 

At the End of the Day, Your Park City Investment is More than a Number

In the grand scheme of things, your Park City investment is about more than just money. Living in Park City–even on a part-time basis–adds richness to your life. 

It’s about family vacations, memories, and cultivating an active lifestyle filled with joy and relaxation. For many, deciding to invest in a Park City investment property provides freedom, financial stability, and the ability to enjoy life in PC to the fullest! 

If buying an investment property is right for you, get in touch! We can help you find a property that will check off all the boxes. Email us today at info@CFHparkcity.com or call us directly at 435-647-8035.