Salt Lake County, UT Cap Rates by Neighborhood

The County-Wide Gross Yield Is a Starting Point, Not a Verdict

Salt Lake County's aggregate gross yield sits at 3.41%, derived from a $1,639 median monthly rent against a $575,927 median home price. At face value, that number looks thin. It is thin. But the county-wide figure blends assets across a wide spectrum of submarkets, property types, and supply conditions, so treating it as a single investment signal will mislead you.

The real story is the intra-county spread. Single-family prices rose 11% year-over-year in Salt Lake City proper as of mid-2026, while West Jordan was flat. Holladay is forecast to post 5.0% rent growth; Sugar House, freshly loaded with 750+ new multifamily units, is forecast at 1.0%. A deal underwritten at 3.41% gross in Sugar House is a different investment from one at 3.41% gross in Holladay, even before you touch the expense stack.

Start with the headline yield, then rebuild it from the submarket up.

Property Tax: The First Subtraction

Salt Lake County's effective property tax rate is about 0.56%, less than half the national average of about 1.1%. Utah assesses at 55% of market value, and municipal rates vary from 0.8035% (Murray City) to 1.0826% (Herriman City) of assessed value.

On a $575,927 acquisition at the county median:

• Assessed value (55%): $316,760
• Tax at 0.56% effective rate: $1,774/year, or $148/month

That converts to about 31 basis points of annual yield erosion on the purchase price, pulling a 3.41% gross yield to roughly 3.10% before any other operating expense.

The 2026-2027 county budget includes a property tax increase of about 14.65% on the county's portion of the bill. Since the county portion is only about 17% of the total bill, the practical increase is under $6/month on a $638,000 home. For an investor underwriting at acquisition, that is roughly 1 basis point of yield impact. Model it, but don't weight it heavily in your return assumptions.

Neighborhood and Submarket Breakdown

Salt Lake City Proper (Urban Core)

Single-family prices in Salt Lake City proper rose 11% year-over-year as of mid-2026. The Downtown, Avenues, and Sugar House submarkets are all identified as top appreciating neighborhoods. Price appreciation at that pace is running well ahead of rent growth: asking rents across the metro averaged $1,525/month as of February 2026, down 0.4% on a trailing three-month basis, and fell 2.2% through full-year 2025.

That divergence compresses yields. If you paid 2025 prices in the urban core and rents declined 2.2%, you are already working with a gross yield below the county aggregate. The buy case here is appreciation, not current income.

Sugar House specifically absorbed 750+ multifamily units in 2025, an 18% inventory expansion, and is forecast at 1.0% rent growth. For a stabilized multifamily asset in Sugar House, gross yields are near their floor.

Holladay

Holladay presents the sharpest rent growth outlook in the county at 5.0% projected growth. Supply additions in that submarket have not matched the delivery volumes seen in Sugar House or downtown. An investor acquiring a stabilized asset in Holladay today at a 3.4%-range gross yield sees a real near-term path to 3.5%+ gross on in-place rents alone, without any price appreciation contribution.

Sandy and West Valley City

Sandy posted 6-7% price appreciation year-over-year in mid-2026. West Valley City is now served by the MVX Bus Rapid Transit corridor, which launched in April 2026 after a $62.8 million federal investment, connecting Murray, West Valley, and Taylorsville via dedicated lanes. Transit access supports working-class renter demand in West Valley, which is relevant for workforce single-family and small multifamily product.

West Jordan was flat on price appreciation, offering the best gross yield entry point within the county's suburban ring if you can find product.

Murray and Taylorsville

Both cities sit on the new MVX BRT corridor and benefit from the same transit-demand tailwind as West Valley. Murray's municipal tax rate (0.8035% of assessed value) is the lowest among the named municipalities, adding a few basis points to net yield relative to Herriman. For investors prioritizing transit-proximate, workforce-oriented rentals with a lower operating expense structure, this corridor merits a direct comparison.

Neighborhood Comparison Table

Multifamily Supply Pressure: The Current-Year Yield Headwind

Salt Lake City delivered 9,430 multifamily units in 2025, equal to 6.7% of existing stock and a decade peak. About 8,000 additional units remain in the pipeline. Average multifamily occupancy was 94.7% as of February 2026, down from what a pre-supply-wave market would have held.

For any investor in stabilized multifamily, that 94.7% occupancy figure is the ceiling on underwriting until absorption catches up with the pipeline. Net absorption in 2024 reached 4,700+ units, above the long-term average of 3,318 units, and new supply is declining from a 2023 peak of 5,800 units toward roughly 4,100 in 2025. The math points toward tightening in 2026-2027, but the next 12-18 months carry real occupancy risk for assets in supply-saturated submarkets.

On a $1,525 average asking rent with a 5.25% vacancy haircut (reflecting 94.7% occupancy), effective gross income drops to $1,444/month. Against a $575,927 purchase price, that is a 3.01% effective gross yield before operating expenses.

Flood Risk: Basis Point Cost for East-Bench Buyers

The county's FEMA flood maps for major creek systems date to 2009, with partial revisions in 2012. FEMA is actively remapping Neff's Creek in the Olympus Cove area of Millcreek, with active alluvial fan designations (Zone A, Zone AO, Shaded Zone X) pending finalization.

Properties near Big Cottonwood Creek, Little Cottonwood Creek, Big Willow Creek, or Little Willow Creek carry mandatory NFIP flood insurance requirements. Mandatory flood insurance on a higher-value east-bench property typically adds $1,000-$2,000 annually in premium costs. On a $600,000 acquisition, that is 17-33 basis points of additional yield erosion, moving a 3.10% net (post-tax) yield toward 2.8-2.9% before any other operating line.

East-bench acquisitions in Millcreek and adjacent foothill neighborhoods require flood zone verification as a hard due-diligence step, not a secondary one. A pending remap that shifts a property into a mandatory insurance zone changes the deal economics at the moment of map adoption.

Cap Rate Outlook: 2026-2027

The near-term setup for Salt Lake County yields is a two-track story.

For multifamily investors, yields are at a short-term floor driven by supply, not demand. The 4,700-unit annual absorption pace and the declining delivery curve suggest the rent correction bottoms in late 2026 or early 2027. Investors acquiring now in undersupplied submarkets like Holladay, or in transit corridors like MVX where demand from working-class renters is structurally supported, are positioned ahead of that turn.

For single-family investors, the 29.3x price-to-rent ratio and flat-to-declining rent environment produce gross yields that are difficult to service at current financing costs without appreciation assumptions. The 2.7-month inventory reading as of June 2026 confirms sellers still control the market, so entry price negotiation is limited. Patient capital waiting for the digestion phase to produce more motivated sellers has a real basis in the data: residential sales per 1,000 population are at a 25-year low, and days on market rose from 29 to 36 in 2025.

The upcoming TRAX Orange Line (preferred route selected January 2025, opening 2032) creates an early-mover case for transit-oriented parcels along the Airport-to-University-of-Utah corridor. Stations around the planned Orange Line do not yet carry transit premiums in pricing, but they will.

Employment supports the demand floor throughout: 19,300 jobs added in the 12 months through December 2025, projected 2.7% unemployment, and a 5.7% average weekly wage increase in Q1 2024. Those figures keep the rental base solvent even when rent growth is modest.

Model your specific deal with our investment property calculator to run submarket-level net yield scenarios against your financing assumptions and target hold period.