Invest in Decatur, IL ?

[Tou V.]

Does anyone know much about the Decatur, IL market?  I'm interested in properties there, but not sure how sustainable that market is.  Who on here invests, lives, or works in this area?  How is it?  Thanks.

[Jeremy Zindel]

Hi Tou,

Decatur, IL is my home area/market.  I’ve lived in the area my entire life (in a small town about 30 minutes out), worked here since I’ve been out of college, and started investing here in 2012.

Industry/manufacturing is the heart of the city’s economy although it is less dominate than it was in the city’s prime 10-20 years ago. The population of the Decatur itself has decrease since that time but the surrounding communities that make up the larger “metro” area (term used loosely… total population is only 100,00ish) have grown.  Unfortunately the city itself has seen a lot of unemployment which it has had a problem getting past.  A large portion of the inner city population survives on government assistance and programs which, in my opinion, contributes to the higher levels of crime and drug activity in those areas, but we’ll leave that political topic for another discussion…

As far as investing goes, I've been happy with the investments I've made. I have 8 units (one duplex and the rest SFR) that produce good cash flow. All but one of them are in the various neighborhoods out on the perimeter of the city in decent to good residential areas. One is inner city and I don't care for it at all. Don't get me wrong, it cash flows like crazy but it's not the type of property I wanted to build a portfolio with, although there a lot of people here that do. There are lots of dilapidated houses in these areas and unfortunately it just continues to get worse and not better.

There are a ton of properties on the MLS right now that could be picked up for $10-25k and rented for $350-$500/mo but they would generally be in the areas described above where most of the other homeowners and landlords on the block are not going to maintain their properties to the level that will preserve home values. For Decatur in general, if you are looking for appreciation of any kind then you should definitely look for a different market. Cash flow, on the other hand, can be had for sure due to the low price point but if you want it to be sustainable you have to find the sweet spot (in my opinion) in some of the outer lying neighborhoods. You spend a little more and don't get quite as much increase in rent in proportion to the additional acquisition dollars but a solid house in a better area with a more stable working class/middle class tenant while still cash flowing is worth it to me.

Hope that helps,

Jeremy