Investing in Aurora, Il, downtown
What's your opinion on investing in real estate in downtown Aurora? Downtown location looks nice, small mixed-use development buildings still affordable, city looks like is getting better and better.
Stay away from Illinois in general. The future taxes are going to kill you. There is an article in The Economist of November 16, 2019, about the state of government pensions in general and Illinois' pensions (the worst off by far) in particular ("State of denial"). It is a truly frightening read. When you add to that the fact that the City of Chicago LOST 13,000 "innovation" jobs while other large cities gained thousands, if not tens of thousands of such jobs, then you realize just how much Illinois is circling the drain.
I understand your point of view and unfair government and life in Illinois in general. But we hold job here, kids go to school here, so we don’t see a point to stay away somewhere surrounded by cornfield in different state, right now we don’t complain and keep business close to home, that’s why my question is about Aurora Il.
@Lena S. I agree that the city is getting better. There are some interesting redevelopment projects happening there right now. I think it's a great area to get into now. Prices are fairly affordable and rents are surprisingly high. I am actually in the process of getting my first property there. Let me know if you have any other questions and I'd love to help where I can.
I tend to agree. I'm originally from Chicago and still have family there. As much as it's tempting to buy multi-family properties there, Illinois is very challenging right now. The laws do not favor landlords. The taxes are high. Population is shrinking and poverty is rising. It may turn around in the long-term but for now, Illinois is challenging. I would highly recommend looking at other nearby states. For instance, I live in New York but am heavily invested in Philadelphia.
I live close to downtown Aurora and would agree that it is ripe for redevelopment. However, many of the existing buildings available need extensive work. May be a good idea to contact "Invest Aurora" and they can point you in directions of opportunity based upon what they are looking for.
Keep in mind Aurora requires all landlords or their representatives to either attend a "crime free program" or have a similar certification from a surrounding suburb.
https://www.aurora-il.org/356/Crime-Free-Multi-Housing-Program
I agree with @Sean Morrisey that it should be ripe for development. While I am not very familiar with the area, I have heard that crime rates tend to be higher and the schools are not great. But since it's surrounded by good school districts (naperville, warrenville, oswego) , the potential is there.
I only invest in multifamily outside of Illinois for reason already stated by others in this thread. However, I do invest locally in residential properties. I buy and sell in Aurora and North Aurora. There's still a moderate demand for workforce housing in both townships.
Downtown Aurora has a shrinking demand for commercial and a flat supply. Those small nice mixed used buildings aren't being rented. You have to consider where your business will come from. The job growth and population is decreasing, and for those who owner commercial spaces downtown I assume it's very competitive to secure a long term local tenant, and almost impossible to get a national chain in.
I think the better play in Aurora is residential workforce housing.
Aurora is solid suburb to invest. I have sold several 2-4's in that area recently and my clients have said tenants great + cashflows no issues. The tenants tend to leave less often there also which is nice so low turnover lots of working class families. A lot of the multi units are older though so some have settling, etc. which some investors are OK with and some aren't. Taxes really aren't that bad at least for the multi units they still cashflow. I think single family the taxes would be more of a ding as a % of rents.
I would avoid mixed use as mentioned above those are shrinking in demand. I know investors who when they buy a multi unit that has a C class retail they only count the retail as half or 1/3 the rent because it's such a headache to actually keep leased and collecting rent.
@Lena S. I'm new to BP and found your old post from 2 yrs ago, I'm living in Aurora and been investing in the Aurora/Naperville border along Eola rd, my initial plan was stick to good school, district 204, all my properties (townhomes) have done well for me since 2014, good tenants, never had any issues with tenants, property appreciations also pretty well.
I've been playing safe and I figured it's time for me to venture a little more, would like to expand my portfolio with multi family rental properties and this will take me to downtown Aurora.
Have you pulled a triggered and invested in downtown Aurora and if you have done it, how is your experience ?
Old post but as of 2022 cashflows well for 4 units. The buildings are mostly janky (old porches, settling, very little maintenance done, crumbling basement walls) but they still rent well and cashflow if your comfortable owning that type of asset.
Quote from @Man Le:What is the typical rent in that area around district 204? I was looking to invest around that same area, but the prices are so high I can’t see a good cash flow unless I rent out for a high amount? What’s your opinion on that should I just charge more for rent or wait on a better deal to come up?
@Lena S. I'm new to BP and found your old post from 2 yrs ago, I'm living in Aurora and been investing in the Aurora/Naperville border along Eola rd, my initial plan was stick to good school, district 204, all my properties (townhomes) have done well for me since 2014, good tenants, never had any issues with tenants, property appreciations also pretty well.
I've been playing safe and I figured it's time for me to venture a little more, would like to expand my portfolio with multi family rental properties and this will take me to downtown Aurora.
Have you pulled a triggered and invested in downtown Aurora and if you have done it, how is your experience ?
Assuming units clean with fresh paint and decent size bedrooms rents in Aurora are $1100-$1200 for 2brs and $1500 range for 3br.
Look for 3/4 units they are what cashflows best.
Quote from @Henry Lazerow:
Assuming units clean with fresh paint and decent size bedrooms rents in Aurora are $1100-$1200 for 2brs and $1500 range for 3br.
Look for 3/4 units they are what cashflows best.
Ok thank you