Is Orem, Utah Good for Airbnb Investment?

To start an Airbnb in Orem, Utah, begin by researching local regulations as Orem requires short-term rental operators to obtain a business license and comply with zoning ordinances that typically allow STRs in residential zones with restrictions on occupancy and parking. Contact Orem City's business licensing department to obtain the required business license (approximately $50-100 annually) and ensure your property meets fire safety codes and health department standards. Find a suitable property by purchasing or leasing a home in residential zones, ensuring it has adequate parking spaces as Orem typically requires one space per bedroom plus one additional space. Furnish the property with quality furniture, linens, kitchen essentials, and safety equipment including smoke detectors, carbon monoxide detectors, and fire extinguishers as required by Utah County health regulations. Create your listing on Airbnb and other platforms like VRBO, highlighting proximity to Utah Valley University, Provo Canyon, and local attractions while setting competitive rates based on comparable properties in the $80-150 per night range typical for Orem. Manage your property by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guests, and keeping detailed records for tax purposes as Utah requires collection of state sales tax (currently 4.85%) plus local transient room tax, while also considering hiring local property management companies like RedAwning or Vacasa if you prefer hands-off management.

To identify profitable short-term rental properties in Orem, Utah, focus on locations within 15-20 minutes of Brigham Young University campus, near Utah Lake recreational areas, and close to Provo Canyon outdoor attractions, as these drive consistent demand from students, families, and outdoor enthusiasts. Target 3-4 bedroom single-family homes or condos built after 1990 with modern amenities, parking for 4+ vehicles, outdoor spaces, and mountain or lake views, as these command premium rates of $150-300 per night depending on season and proximity to attractions. Analyze comparable properties on Airbnb and VRBO within a 3-mile radius, noting that peak seasons (summer outdoor activities and BYU events) can yield 20-30% higher rates, while winter months may see 15-20% decreases. Research competition density using AirDNA and Mashvisor to identify neighborhoods with less than 15% STR saturation, and monitor local regulations as Orem requires business licenses and has specific zoning restrictions in residential areas. Utilize tools like Rabbu for Utah-specific market data, BiggerPockets for local investor insights, and connect with Orem-based property management companies like RedAwning or local firms familiar with BYU rental cycles to optimize occupancy rates that typically range from 65-80% annually in well-positioned properties.

To obtain an Airbnb/STR permit in Orem, Utah, you must first apply through the Orem City Planning Department located at 56 North State Street or online via the city's permitting portal. Required documents include a completed short-term rental application, proof of property ownership or lease agreement with landlord consent, a site plan showing parking arrangements, proof of liability insurance (minimum $1 million), contact information for a local property manager if you're not local, and a floor plan of the rental unit. The application fee is approximately $150-200 with an annual renewal fee of around $100. Orem requires STRs to be owner-occupied or have an on-site manager within 1000 feet, maintain adequate off-street parking (typically 2 spaces), limit occupancy to 2 people per bedroom plus 2 additional guests, display the permit number in all advertisements, and comply with noise ordinances and neighborhood compatibility standards. The approval timeline is typically 4-6 weeks after submitting a complete application, during which the city conducts a review for zoning compliance and may require a neighborhood meeting. Once approved, you must renew annually and maintain compliance with all city regulations including regular inspections and guest registration requirements.

Short-term rentals (STRs) are legal in Orem, Utah, but operate under specific municipal regulations that were updated around 2020-2021. The city requires STR operators to obtain a business license and conditional use permit, with properties subject to zoning restrictions that generally allow STRs in residential areas but with limitations on density and concentration. Orem prohibits STRs in certain residential zones and requires compliance with parking requirements, occupancy limits based on bedroom count, and noise ordinances. The city has implemented a registration system and requires annual renewals, with properties subject to inspection and neighbor notification requirements. Recent changes have included stricter enforcement mechanisms and enhanced penalties for violations, with the city maintaining the right to revoke permits for repeated violations of city ordinances or neighbor complaints.

The best Airbnb investment areas in Orem, Utah include the neighborhoods near Utah Valley University (UVU) campus, particularly the areas around 800 North and University Parkway, which attract consistent demand from visiting families, prospective students, and university events year-round. The Cascade neighborhood and areas near Cascade Golf Course offer appeal to leisure travelers seeking scenic mountain views and outdoor recreation access. Downtown Orem, especially near the FrontRunner station and City Center, provides strong potential due to business travelers and easy transit access to Salt Lake City and Provo. The Hillcrest and Stonewood neighborhoods in east Orem are attractive for their proximity to hiking trails, Timpanogos Cave National Monument, and scenic canyon access, drawing outdoor enthusiasts and families. Areas near the Shops at Riverwoods and University Mall benefit from shopping tourism and events at the UCCU Center, while neighborhoods close to the Orem Community Hospital attract medical tourism and visiting families of patients.

In Orem, Utah, Airbnb hosts are subject to multiple lodging taxes including Utah's state transient room tax of 4.25% and Utah County's transient room tax of approximately 3%, totaling around 7.25% in combined lodging taxes on gross rental receipts. These taxes apply to short-term rentals under 30 consecutive days and are collected from guests at the time of booking, with Airbnb automatically collecting and remitting these taxes directly to the state and county tax authorities on behalf of hosts through their tax collection service implemented around 2019. Hosts must register with the Utah State Tax Commission and obtain a transient room tax license, file monthly returns by the 20th of the following month even if no rentals occurred, and remit collected taxes accordingly, though hosts using Airbnb's automatic collection service still need to register but may have simplified reporting requirements. Exemptions typically include rentals to permanent residents (30+ days), certain government employees on official business, and some religious or charitable organization stays, while hosts may also need to collect standard Utah state sales tax of 4.85% plus local sales taxes depending on Orem's specific requirements.

The total cost to start an Airbnb in Orem, Utah is approximately $485,000-$535,000. This includes property purchase at the median home price of $425,000 (2024), furnishing costs of $15,000-$25,000 for a complete 3-bedroom setup including furniture, appliances, linens, and decor, initial setup costs of $3,000-$5,000 covering professional photography, listing creation, cleaning supplies, and technology setup, permits and fees totaling $500-$1,500 including business license, short-term rental permit, and potential HOA approvals, insurance costs of $2,000-$3,000 annually for landlord and short-term rental coverage, utility deposits and setup of $500-$1,000 for electricity, gas, water, internet, and cable, and first 6 months operating costs of $12,000-$18,000 covering utilities ($200-300/month), cleaning services ($100-150 per turnover), maintenance and repairs ($200-400/month), property management software ($50-100/month), and marketing expenses ($100-200/month). Additional considerations include potential property management fees of 15-25% if outsourced and a recommended cash reserve of $10,000-$15,000 for unexpected expenses and vacancy periods.

Airbnb properties in Orem, Utah typically generate annual revenues between $18,000-$35,000 for entire homes and $8,000-$15,000 for private rooms, with average daily rates ranging from $65-$120 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-$40 per turnover), utilities ($150-$250 monthly), property management (10-20% of revenue), insurance ($800-$1,200 annually), and maintenance costs ($2,000-$4,000 yearly). Net profit margins typically range from 15-35% for well-managed properties, with higher margins achieved by hosts who handle cleaning and guest communication themselves. Success factors in Orem include proximity to Utah Valley University (driving consistent demand from visiting families), competitive pricing during peak ski season (December-March), and maintaining superhost status through consistent 4.8+ ratings. Properties within 2 miles of UVU campus and those offering family-friendly amenities like full kitchens and multiple bedrooms tend to achieve 70-85% occupancy rates compared to the market average of 55-65%. A typical 3-bedroom home generating $28,000 annually with $16,000 in expenses yields approximately $12,000 net profit, representing a 43% profit margin and 8-12% return on investment for properties valued between $350,000-$450,000.

Airbnb investments in Orem, Utah typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15%, driven by the city's proximity to Brigham Young University and outdoor recreation areas like Provo Canyon. Properties near BYU campus and downtown Orem command premium nightly rates of $80-150, with occupancy rates averaging 65-75% annually due to consistent student housing demand and seasonal tourism from nearby ski resorts and hiking destinations. Initial profitability usually occurs within 18-24 months, with single-family homes requiring $40,000-80,000 down payments generating monthly cash flows of $500-1,200 after expenses including property management fees of 15-25%, cleaning costs, and maintenance. The market benefits from Utah's growing tech corridor and limited hotel inventory in the area, though investors should account for seasonal fluctuations with peak performance during university semesters and summer outdoor recreation seasons, while winter months may see 20-30% lower occupancy rates.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for Airbnb investors. In Orem, Utah, local real estate agents like those at Coldwell Banker Residential Brokerage, RE/MAX Associates, and KW South Valley Keller Williams have experience helping investors find vacation rental properties in the area. National services include AirDNA for market analysis, Mashvisor for investment property analytics, and BiggerPockets for networking with local investors. Local property management companies such as RedAwning and Vacasa can assist with identifying and managing profitable Airbnb properties in Orem. Utah County-based agents at Century 21 Everest and Equity Real Estate often work with investors seeking short-term rental opportunities near Provo and the surrounding mountain recreation areas. Additional services include STR Helper for market research, AllTheRooms Analytics for competitive analysis, and local investment groups through the Utah Real Estate Investors Association that focus on the Orem market.