Living in IL looking to invest in WI. What should I be aware of?

Question

Hello everyone. We live in northern IL and are looking to invest in southern WI. The property taxes there are half of what they are where we are in northern IL. I'v heard that WI has some little charges, fees, little nuances when it comes to real estate. Would love to hear from folks who are currently investing from out of state into WI. What additional expenses, taxes etc... should we be aware of?

Thank you in advance. We love BP!

Todd

Thank you in advance.  We love BP!

Todd

Shawn Ackerman · Answer

@Joe Twing great input.

Joe Twing · Answer

oh yes the weatherization. In my experience it was inforced in walworth county. Cost i think 150$ for an inspector to come out. They made me board up a single pain window in the basement and put in a low flow shower head. The guy said i got off easy as the big one they go after is insolation in the attic. My house has no access so i got a pass. After purchase you have one year to complete inspection.

Shawn Ackerman · Answer

@Todd Heintz If your going to be an out of state investor then I'd suggest taking a few trips down to the market first and aligning yourself with a team who shares in your core values.  Although IL is some respect is a hop, skip and jump away from WI it can feel like a world away if your team is not properly vetted.  Best of luck to you.  Persist and you will WIN!!!

Marcus Auerbach · Answer

I work and invest mostly in the area between Milwaukee Co ( far North and North West) and Ozaukee-Washington-Waukesha Counties - in a nutshell the cashflow is pretty much the same as the higher property prices outside of Milwaukee are being off-set with lower taxes, so PITI is about the same. Appreciation however has been a lot better outside Milwaukee Co.

Scott Schultz · Answer

We have 14 rentals in Northern WI as in most places if you are in a city the taxes are higher, and some municipalities require rental registration/inspections I have heard, Oh and the Joke of a program that is "Rental Weatherization" that generally is not enforced, other than that, its pretty easy to be a landlord/property owner in WI especially with a good manager in place!

Joe Twing · Answer

nice. I have two houses in delavan one down town and one outside city limits. Prices there are starting to rise but 1% deals can still be found on mls.

Corina Eufinger · Answer

Right now I love being a property owner in Wisconsin. We have made huge advancements in landlord laws at the state level.  You will find them much more in the landlord's favor than in Illinois.

Rock County, Kenosha County, Racine County, and Walworth County are generally lower taxed counties.  North of Madison most counties are lower taxed as well. Milwaukee, Ozaukee, and Waukesha counties are on the higher end.

Todd Heintz · Answer

@Joe Twing - We have not looked too heavily in the Fox Lake area yet.  We have been concentrated more in the Harvard and Woodstock area in McHenry county and a little bit in the Elgin area which is Kane county.  $80K will get you a rough 100 year old house and the taxes will be about $2800 to $3000.  But since the house is in rough shape we wouldn't be getting much in the way of rent.

As far as why Wisconsin, it has been mainly the taxes.  We have just started.  We viewed our first properties this past weekend in Delavan.

Joe Twing · Answer

i live and invest in walworth county. So i cant speak for out of state investing here but i know the area and the market pretty well. Taxes in most of the areas in city limits are around 1400 to 2000 a year for a house tax appraised at about 80000. More in most villages. Why besides taxes are you looking up here? Cant you buy alot cheaper there....like fox lake area? And other towns along hwy 12? They may be rougher areas though. Im not sure there.

Todd Heintz · Answer

Michael, thanks for your reply.  I will have to look into the WI landlord laws.  Right now we are looking to invest in Walworth county.  And comparing like-for-like properties we've found property taxes to be about half of what they are just over the border in McHenry county (IL).  The lower property taxes are attractive as we are looking to invest in rentals and the lower taxes really boost the cash flow.

We haven't looked in Milwaukee county yet but will definitely keep that in mind.

Thanks again,Todd