Louisville rental areas

10 Replies | Louisville, Kentucky

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Both are good rental areas. Certain parts of Buechel aren’t so great, so do your research. I love the Jtown area but it can be expensive and might not be good for cash flow if that’s what you’re after. 

@Steve Armstrong I live and work in jtown. There are plenty of renters but it's much more expensive to get into a SFH in jtown, so it would be more of an appreciation play than for cash flow.

For example, my personal home has appreciated 25k since I bought it in oct of 2017.

Buechel would be a better spot for cash flow properties. Not as nice of an area like jtown though.

I can't speak much to the SF side, but for multifamily, we closed a deal in J-Town in October 2018 with a buyer that paid about $35k/door, but are in the process of adding nearly $40k/door in renovations.  This group is as smart as it gets for multifamily re-positioning and I don't think they would have made this commitment without a full belief in the sub-market.  The rental market in general for J-Town seems to be strong.

I like 40214,40216,40272,40220,40207,40206,40205,40204, 40218, 40258 for buy and holds personally.

I think the answer is dependent upon your goals. If you're looking for ROI on investment via cash flow or the BRRRR method or simple appreciation.

My point I keep making over and over with my fellow investors is this:  for a rental in Louisville there are generally certain ranges of rent you will get for a house or apt based on the # of beds/baths.  Certain areas/zips will bump that rent # up or down. The question for me is, the price I have to pay to get into an upper zip code, is the amount of increase in rent worth it?  

In some areas like Okolona you may spend 80k for a decent 3/2 that you may rent for $1000-1100 tops.  I buy a 3/2 in Portland for $40k and rent it for 800-900.  I’m not looking for appreciation. I’m looking for cash flow. As long as I screen my tenants and maintain my property then I maintain cash flow. Oh and of course I can buy 2 x 3/2 for $80k and cash flow $1600-1800/month. 

This is extremely important if a person is using bank loans. Why tie up $500k in credit on 5-6 houses to generate let’s say $7500 a month rent when you can get 13 houses generating $11k/month?  Taxes and insurance costs will be about the same in each scenario.  Yes there could be more maintenance for 13 houses v 6 houses but alternatively if you have to evict a tenant or have a house sitting empty for a month, the expense of 1/13th is a lot less than 1/6th a loss of cash flow. 

JTown prices are higher and the rents are higher. There is demand everywhere. We have been filling vacancies in less than 7 days including background checks, screening tenants, and handing over keys. Everywhere in Louisville rents fast this time of year. Come October it will be a different story. J-Town is more desirable than Buechel for several reasons (sports, lack of multifamily, shopping, etc.). I say this as both a PM Company and someone who has owner-occupied for several years in both locations.

More cashflow and lower entry level cost in Beuchal. I have a few other places I'd pick over both.