Buying into a city with decreasing population

[Eric Calabrese]

Hey fellow pocketers, so I’ve been pretty interested in buying my second investment property in my first year of investing, my first one has been quite successfully so far so I’m really feeling the pressure on property two.

Anyway I’ve been looking at Milwaukee and I see that although their unemployment is at record low, they are doing some major construction to their downtown and although their population has grown slowly since 2010 last two years they’ve actually been dropping a little. Would this cause worry to a savvy investor?

[John Franczyk]

I'm about 30 miles south of Milwaukee, and I've been watching the changes that  the City is undergoing for the past three years. Like many other cities, you will want to stay away from certain sections until they are better stabilized (check out Trulia's crime maps for reference). Apart from those sections, other parts of the city are attracting significant amounts of attention. Walker's Point and Riverwest, for example, are both pretty hot right now. 

The city has a lot of mature housing stock that needs attention and updating. From what I can see, rents are generally stable. There's been a lot of attention recently on a few landlords who were gaming the system and the City's aldermen are cracking down on abuses, but I think that those landlords are more the exception than the rule. 

The City itself sometimes has a quirky feel to it - I've heard it called the Portland, Oregon of the Midwest. On the plus side, that quirkiness supports more locally-owned businesses that offer better service than national chains.  The weather might scare a few people away, but the locals keep themselves insulated and well-primed when the snow and wind come in.

The City is actively attempting to lure millennials from Chicago with an ad campaign that highlights the City's amenities and transportation benefits. There's a healthy flux of people moving north from Illinois, and the FoxConn development in Racine will likely continue to lure people from south of the border. All told, I would not be overly concerned with reports of Milwaukee's population issues.