Investing in Peoria, IL from out of state

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Investing in Peoria, IL from out of state

Rajmohan Rajasekaran
Investor · Edison, NJ · Member since 2019 · 6 posts · 0 votes

Hi BP, I am a New investor(Out of State) looking to buy a rental property in Peoria, IL.

I have a few questions on the same, hope fellow investors from that area can answer.

1. How is the Market in Peoria now? I see properties sitting for months. Is it always the case? Any thoughts?

2. How is the economy ? Any major employers/companies in that area? How easy it is to rent a SFH or MFH units (assuming units are in good condition)? Does it take months?

3. Any specific areas/pockets i should avoid investing in Peoria?

4. Since I am Out of State, I would need a Property manager. Any suggestions on good property management company in that area ? If you have, do they handle one property or I need to have multiple properties(any min requirements)?

5. About property appreciation, I see lot of properties are either stayed the same value for years or even decreased. Any thoughts on that?

6. How is the Landlord laws in Peoria ? I saw on another thread where @Steve Sanchez mentioned about some peoria landlord association facebook group. I could not find it. May be some can share it here?

Appreciate all your help. 

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  • Steve Sanchez
    Investor · Peoria, IL · Member since 2014 · 76 posts · 44 votes
    6y

    Rajmohan,

    I'll try to answer your questions as best I can, I love this market but it definitely has it's challenges just as every other market does. If it were easy everyone would do it, right?

    1) Properties are pretty much always available, Peoria proper is "mostly" C+ to D- neighborhoods.

    2) Economy is OK, Caterpillar, OSF Hospital and Komatsu are big employers here. However most of their employees won't live in Peoria proper, hey live in outlying towns or pockets of nicer neighborhoods. If your rental is nice and priced properly it usually rents in a reasonable time, ours rent in days to a few weeks. Section8 is another matter and it's a mess here.

    3) Not really, each area has it's own challenges or nuances but as long as properly managed all are doable.

    4) Ahhh! Here in lies they problem, I haven't seen a decent property management company that will take on the "hood" houses (and remember most of them here are!). So unless you're that Unicorn that figures it out you need competent boots on the ground or need to be here yourself. I've seen people over the years buy up these great investments only to leave after code enforcement has levied big dollar fines, they've not been able to rent and management has been mediocre at best.

    5) Pretty much zero appreciation...

    6) Courts have been pretty decent to us landlords, eviction from start to finish is about 30 days. I'll PM you the FB group as it gets blocked here, don't know why?

    In conclusion, if you aren't here or have someone you can trust (unless it's family, not likely...) I haven't seen it work.

    -Steve

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  • Rajmohan Rajasekaran
    OP
    Investor · Edison, NJ · Member since 2019 · 6 posts · 0 votes
    6y

    Just saw this post on Peoria Housing Market. Not sure how accurate it is.. sounds very bad if true..
    https://www.gobankingrates.com/investing/real-estate/housing-markets-that-are-turning-ugly/#51

    Only people who are actively investing in that market can help answer/clarify. 

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  • Rajmohan Rajasekaran
    OP
    Investor · Edison, NJ · Member since 2019 · 6 posts · 0 votes
    6y
    Originally posted by @Steve Sanchez:

    Rajmohan,

    I'll try to answer your questions as best I can, I love this market but it definitely has it's challenges just as every other market does. If it were easy everyone would do it, right?

    1) Properties are pretty much always available, Peoria proper is "mostly" C+ to D- neighborhoods.

    2) Economy is OK, Caterpillar, OSF Hospital and Komatsu are big employers here. However most of their employees won't live in Peoria proper, hey live in outlying towns or pockets of nicer neighborhoods. If your rental is nice and priced properly it usually rents in a reasonable time, ours rent in days to a few weeks. Section8 is another matter and it's a mess here.

    3) Not really, each area has it's own challenges or nuances but as long as properly managed all are doable.

    4) Ahhh! Here in lies they problem, I haven't seen a decent property management company that will take on the "hood" houses (and remember most of them here are!). So unless you're that Unicorn that figures it out you need competent boots on the ground or need to be here yourself. I've seen people over the years buy up these great investments only to leave after code enforcement has levied big dollar fines, they've not been able to rent and management has been mediocre at best.

    5) Pretty much zero appreciation...

    6) Courts have been pretty decent to us landlords, eviction from start to finish is about 30 days. I'll PM you the FB group as it gets blocked here, don't know why?

    In conclusion, if you aren't here or have someone you can trust (unless it's family, not likely...) I haven't seen it work.

    -Steve

    Thanks so much Steve for your reply.

    You mentioned the employees who work in Peoria mostly stay out of town/nicer neighborhood. Would you mind sharing some of those towns?

    "I've seen people over the years buy up these great investments only to leave after code enforcement has levied big dollar fines" --> I am not quite sure I get this. Is it something to do with building violations? Can you explain a little bit?

    Unfortunately i don't have any option other than going with a property management company. I am still researching from my end.

    I found this one online. https://www.309property.com/ Do you recommend this? Any feedback about this company?

    And about some one trusted being there. I have my brother-in-law who is moving to Bloomington for work in couple of weeks.

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  • Steve Sanchez
    Investor · Peoria, IL · Member since 2014 · 76 posts · 44 votes
    6y

    Towns people live in that can afford to, but still work in Peoria; Dunlap, Morton, Edwards, Pekin, E Peoria...

    Code enforcement is very aggressive in Peoria, the city is short on money and it is believed they are using code enforcement to generate income. You are dealing with 100+ year old houses and tenants who do not keep up the exterior = a recipe for trouble if you are not right on top of things. Start adding big fines and it's very easy to go upside down very quickly.

    309Property is owned by Mike McCulla, great guy and very competent, I believe he will not take on houses in C- and less neighborhoods, it's just too much work for what he can make. Which is exactly where the best ROI is. You have to commit to almost daily management, we respond within 5 min to a code complaint and we are still not 100% free of fines. It's a daily battle, having someone in Bloomington IMO won't work.

    Hope this helps, basically if you do not commit to someone who is in Peoria that you completely trust and can rely on, it simply does not work.

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  • Brad Stegall
    Rental Property Investor · Peoria, IL · Member since 2018 · 79 posts · 56 votes
    6y

    I think Peoria is a great cashflow market.  No appreciation here though.  I think a lot of the issues Steve referenced would depend on where you choose to invest.   I don’t buy the “hood” houses that Steve referenced. A lot of my friends do but I have chosen not to.   My returns may be a bit lower but so are my headaches.  I just requested to connect w you.  Then PM me and we can schedule a call.  I am working w Mark Wagner as a property manager.  He won’t do “hood” houses though.  Look forward to speaking w you!!!

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