All Forum Posts by: William S.

Hey Tosa investors,

Thought I would provide an update on rents for this area to keep everyone informed. East Towne continues to have demand for quality tenants (lawyers, nurses, etc). Many of the duplexes on the market (for sale) seem to have low rents posted ($800-$900ish). I'm guessing this is because owners have had the property for a long time and are not raising rents, or they are simply not educated in investing. At the same time, newly built apartments are being built in Tosa. These rents are extremely high compared to the $800-$900/m. 2 bedroom apartments around $1,500-$1,700/m.

I currently have a duplex in East Town near North Ave. Highly renovated lower unit with 2.5 car garage and an updated upper unit. I recently moved out of the lower and listed it around end of February. After about 3-4 weeks we have a signed lease for $1,395/m. I originally had it listed for $1,450/m. Once again, high quality tenants. These new tenants actually moved from one of the apartment complexes. 

For the upper unit, rent is currently at $1,150/m. This was a lease from middle of winter last year. However, I know that I can get $1,250-$1,275/m for this unit. I know another investor in the neighborhood with a comparable unit (updated/no garage parking but off street). He rented his last summer for $1,250/m very quickly.

North Ave continues to develop with bars/restaurants and Tosa school district is strong. There is demand and land is scarce. The only solution for housing is to build apartment complexes which are still roughly $100/m more than my unit. Duplex listings range wildly from $240kish-$300k. I have seen some lower though too. However, these are older builds and require some updating. Acquiring more in the $250k range is possible with new HVAC and water heaters. Galvanized plumbing is often the norm, so that needs updated. It's a slightly more expensive area than most invest in, however the demand, area, tenant quality, and rents are good. I think if you had a partner 50/50 you could get some good things going here.

Has anyone implemented the strategy of billing tenants a set monthly cost for water? I think it sounds like a better strategy than baking it into the rent. Seems like another income source on the property. Thoughts?

@Jay Hinrichs

Owner occupants receive tax credits and investors don’t on the property taxes. It can be a large tax difference $600/yr for my duplex. Then you add increasing assessments on top of that... It’s tough to raise rents that much to compensate for the tax burden. It is concerning for a hold investor.

@Jay Hinrichs

I lived in Milwaukee for three years and bought while I lived there. The duplex is a former house hack. I also have a single family rental in Brown Deer. I built some good relationships with a realtor, PM, and construction crew. Milwaukee area has it's pros and cons. My pros are the people I work with, and the low supply of quality rental properties. Cons are the local government and weather. They love their taxes, and you really don't get anything in return as a citizen. I've been debating on what my next steps are now that I am back in KC. KC has a lot of supply of rentals compared to Milwaukee area. I also don't have solid connections like I do in Milwaukee. Plus, BP/California investors haven't helped KC home prices, everything is high.

@Marcus Kuhnert

I think this alone is doable. I'm also battling increasing assessments + no longer receiving credits. That is more of the issue. I may need to find an attorney to protest the property taxes every year.

Curious how other investors are going to handle this significant tax increase. $188 more a year per $100,000 of home value. This is going to put my duplex close to an increase of $600/yr. This is in addition to the constant other property tax increases that occur every year. 

This seems like such a significant increase in a short amount of time. Raising rents simply can’t keep up with these taxes. I’m starting to debate selling and getting out of Milwaukee all together.

@Micah Thomas

I have seen a couple around this price range. I'd prefer something around $100k that needs a lot of work. That's what I'm seeking.

@Micah Thomas

I'm only looking for single families in Overland Park and do not mind rehabs at all. Lowest I've seen is $180k, with rents ranging $1,500-$1,700/m.

After looking into OP further, it seems to me we are now in more of a flipping market. Prices are too high to make a return rental wise. Thoughts?

I haven't revisited the KC market for a few years. Are finding rentals even possible in today's market (JOCO)? What are the investors out there doing? Just flipping, considering the part of the cycle we are in?