Short Term Rentals in Milwaukee
Are there any investors or Realtors on this forum that either own or help investors buy properties to use as short term rentals? I'd love to connect and get some thoughts and advice! Here are a few questions and topics:
1) What is best location for short term rentals in Milwauee?
2) Is it seasonal (Spring, Summer only?)? Or can you get renters all year long?
3) Are there any good short term prop management companies in MKE?
4) Are there any rules from the city and/or certain HOAs that won't allow it, or restrict it?
Hey @Stuart Grazier most of what I learned from STR comes from @Lisa Loesel. Shes a realtor and STR investor in Milwaukee. I would reach out to her to chat.
Hi Stuart! Nice to meet you. I am a Realtor in Milwaukee, WI & I've been managing my own short term rentals since 2012. Obviously Covid has changed the short term rental market a bit, but from what I've been seeing, I believe it is on its way back up. Here are my answers to your questions:
1. The downtown area & surrounding neighborhoods are a safe bet especially once the Milwaukee summers come back to life. With a festival or event every weekend, you can expect to be fully booked (all weekends) May-October. I do think some of the areas with close proximity to downtown & other high interest areas (i.e. the Brewers stadium, the medical college, the zoo) will do well also, but nightly rates will be a little lower. From everything I've been reading, lake front property is going to be important in the short term rental industry over the next few years & is definitely something I would consider. Our lake country is a 25-45 drive from the city so its a peaceful lake stay, but guests could easily head to the city for sight seeing & attractions. Seems like the best of both worlds.
2. You can get renters all year long, its just less in the winter. I am typically fully booked March/April through October. Nov-February I just want to cover costs knowing the high season is where my profit is. Or you can find the holy grail of short term rentals which is a longer term renter covering the winter months. This year I have a traveling nurse renting one of my units January-April which covers the winter months & then the unit is available again for high season.
3. Not that I'm aware of, I've always managed my own. I do know another host in the are who does co-host that I could put you in touch with.
4. I can't tell you how many times I've gotten this question from clients. As far as I know there are no rules or restrictions for the city of Milwaukee. I have heard of some of the suburbs trying to put restrictions in place. As far as HOAs, I'm sure there are some neighborhoods that do have rules against it. Every single condo HOA in the city restricts it. All but one, The Knickerbocker. It's partially owner occupants & partially a hotel so they do allow owners to short term rental. From what I've heard from clients in the building, it isn't going well. I'm not sure how long they will continue to allow it.
If you want to short term rental in the city, it has to be a single family, duplex or a twindominium/boutique condo situation.
Let me know if you have other questions, I'm happy to help!
Thanks @Lisa Loesel! I'd love to pick your brain more!
@Lisa Loesel @Stuart Grazier We are mostly in the fix and flip business. Short term rentals seem interesting, but are management heavy. Curious on the returns.
Hi Anthony-
STR is definitely more management intensive than LTR. I've done both & now only do STR because once you have a system in place, I feel the return is worth it. I also think it is the most efficient use of a property. I've always taken a quality over quantity approach to my portfolio, granted it is only a side hustle for me. I have some examples in my profile of STR projects, but just to give you an example of a property that I have done both LTR & STR, here is roughly the breakdown:
LTR Expenses: 21,100/year
LTR Rent: 24,000/ year (this number is from 2016 so rent value may have gone up slightly)
STR Expenses: 28,000/year
STR Gross revenue in 2019: $56,500 (The actual number on my tax return was over 68,000, but when the DNC canceled I had to return the $11,500 the guest had prepaid for the event)
STR revenue does not include a management fee because I manage the property myself. This also does not include the initial set up cost of the property which is roughly $9,000-$12,000 depending on the size.
I have a cleaning person who has been working for me for years & handles all of my properties. If nothing has gone wrong during a stay I would say I spend 1-2 hours a week per property on management activities.