I live out of state but have interest in rental properties. Around Western Michigan university in Kalamazoo MI. Looks like there maybe some deals to be had. Is anyone own properties I this area?
Yes and I can say first hand property's have risen past the point of profit and renovating run down opportunities is more difficult then meets the eye. Not impossible but be ready to dump about 20k per one bedroom unit.
Decent market , but be super selective and turn key is better then renovation ready
The prices have definitely jumped near WMU and K College in the past few years (a typical 3-4 bedroom student rental in the Vine neighborhood would have gone for $30-40k in 2011... that same house is now being listed for $80-90k without any major updates or renovations). That said, there's still money to be made. Downtown Kalamazoo is booming and the rental market is hot. I've purchased two student rentals down there in the past two years and both are performing very well (we're getting 1.6% net monthly rent/total investment).
Couple words of caution...
1. Be aware that many of the neighborhoods near WMU are in a historic district, which limits your options regarding upgrades/renovations to said homes. I.E. You can't replace old windows with new vinyl or fiberglass. Can't replace old wood siding with vinyl.... etc.
2. The older homes require a lot of maintenance. I've found that many landlords down there act more like slumlords than a landlord that takes pride in their homes. This gets passed on to you so I'd really bump up your R/M budget (I set mine at 17% with a 10% cap ex on top of that) when you run the numbers on these homes. If you're not comfortable with that high of an R/M budget, then I'd definitely go the turnkey route as @Christopher Neeson mentioned.
If you have more questions or want more details, then just send me a PM. I'd be happy to help. My wife is a WMU alum and I've lived in Kalamazoo for over 20 years so we're both pretty familiar with the area. Good luck!
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