The Milwaukee area is full of great real estate investment opportunities. Whether you are looking for a long-term rental property or a quick fix-and-flip, there are plenty of areas to find what you’re looking for. From walkable neighborhoods to up-and-coming suburbs, the Milwaukee area has something for every type of real estate investor.
In this blog, we’ll explore some of the best places to invest in rental properties in the Milwaukee area. We’ll cover the areas with the best potential ROI, as well as some tips for successful investing in the area.
Why Invest in Milwaukee?
While Milwaukee’s population growth is slow and sits at a steady ~560,000 residents, the economy in metropolitan Milwaukee is growing quite well! Despite the affordability of home prices in Milwaukee, there is a significant presence of rental properties in many neighborhoods within the city and its surrounding suburbs. One example is the Yankee Hill neighborhood, located near Downtown, where nearly 90% of the homes are occupied by renters.
Over the past year, the value of middle-tier homes has increased by 6.8% (Zillow, August 31, 2023). Additionally, according to Zumper, the median rent for 2-bedroom homes in Milwaukee has remained substantially flat at around $1,200 (as of September 2023).
These facts make Milwaukee a great place to consider investing in real estate. With the city amenities and local attractions growing, there will be even more of a reason to check out the city and the surrounding areas.
Factors to Consider When Investing in Rental Properties
Before investing in any property, it’s important to consider a few key factors. These include rental demand, property appreciation, and potential rental income. By understanding these factors, investors can make more informed decisions and maximize their returns. Let’s take a closer look at each factor.
Rental Demand
When it comes to rental demand, the Milwaukee area has a lot to offer. With a thriving economy, the city presents an ideal situation for rental property investors. The area also has a variety of rental property options, ranging from single-family homes to luxury condos. With so many options, investors can find a rental property that suits their needs and budget.
It would be beneficial to study the trends in the local rental market. Are rental rates increasing, stable, or decreasing? Look at vacancy rates and occupancy trends to gauge the overall demand for rental properties. Areas near universities, employment hubs, and public transportation tend to attract more residents.
Consider the demographics of the area. Is it a family-friendly neighborhood, a student area, or a location that caters to professionals? Understanding the target demographic will help you tailor your investment strategy.
Property Appreciation
Property appreciation refers to the increase in the value of your rental property over time. While rental income provides immediate cash flow, property appreciation can significantly enhance your overall return on investment (ROI).
Make sure to research areas that are experiencing economic growth and development. These regions often see property values rise over time due to increased demand. Also, keep an eye on planned infrastructure projects, schools, parks, and commercial developments in the area. These improvements can positively impact property values.
Potential Rental Income
The potential rental income is a critical factor in determining the financial viability of your investment. Research the current rental rates in the area. Are they competitive, and do they align with your financial goals? Keep in mind that overpricing can lead to longer vacancies.
This is a great time to choose a property type that matches your investment strategy and target market. Factor in operating expenses such as property management fees, maintenance costs, property taxes, insurance, and vacancies when estimating potential rental income. A realistic assessment of expenses will help you determine your net income.
Be aware of rental market cycles. In some seasons or economic conditions, you may be able to charge higher rents, while in others, you might need to adjust your pricing strategy to attract residents.
Top Neighborhoods for Property Investments in Milwaukee
Bay View
Bay View has become one of Milwaukee’s most sought-after neighborhoods for renters. Its proximity to Lake Michigan, trendy bars, restaurants, and parks make it a desirable location for both young professionals and families. Rental demand is high, and property values have been steadily increasing. Here is some more relevant information:
- Population: ~ 20,000
- Median rent- 1-bedroom (as of September 2023): $1,045
- Typical home value (as of August 31, 2023): $289,000
- Renter-occupied households: 48%
*info gathered from Zumper and Zillow.
East Side
The East Side is known for its vibrant and diverse community. Located north of Downtown Milwaukee, the urban neighborhood is close to Lake Michigan on the east. With the University of Wisconsin-Milwaukee nearby, it attracts students and faculty looking for rental properties. The neighborhood has a mix of historic and modern housing options, providing investors with a range of opportunities. Here is some more relevant information:
- Population: 34,000
- Median rent- 1-bedroom (as of September 2023): $1,500
- Typical home value (as of August 31, 2023): ~$400,000
- Renter-occupied households: 55%
*info gathered from Zumper and Zillow.
Walker’s Point
Walker’s Point has experienced a rejuvenation in recent years, with a surge in new restaurants, shops, and businesses. Its proximity to the Third Ward and downtown Milwaukee makes it a convenient choice for renters looking for a lively urban atmosphere.
- Population: The population of Walker’s Point is part of the larger population of Milwaukee, which was estimated to be around 590,000 residents as of September 2021.
- Median rent- 1-bedroom (as of September 2023): $1,500
- Typical home value (as of August 31, 2023): $112,700
- Renter-occupied households: 73%
*info gathered from Zumper and Zillow.
Brewer’s Hill
Brewer’s Hill is an up-and-coming neighborhood just north of downtown Milwaukee. It’s an area undergoing revitalization, making it an attractive option for property investors seeking potential appreciation. The neighborhood’s historic charm and proximity to downtown are strong selling points.
- Population: The population of Brewer’s Hill, Wisconsin is a part of the larger population of Milwaukee. Milwaukee’s population is around 590,000 residents as of 2021.
- Median rent- 1-bedroom (as of September 2023): $1,100
- Typical home value (as of August 31, 2023): $325,000
- Renter-occupied households: 67%
*info gathered from Zumper and Zillow.
Other Promising Areas for Property Investments
Wauwatosa
Located just west of Milwaukee, Wauwatosa offers a suburban feel with easy access to the city. It’s known for its family-friendly environment. Rental properties in Wauwatosa can attract families and professionals seeking a quieter lifestyle, without being too far from the city.
- Population: 47,700
- Median rent- 1-bedroom (as of September 2023): $1,450
- Typical home value (as of August 31, 2023): $367,000
- Renter-occupied households: 37%
*info gathered from Zumper and Zillow.
Shorewood
Shorewood is a suburb north of Milwaukee, known for its top-rated schools, beautiful parks, and tree-lined streets. Rental properties in this area can command higher rents due to the high demand for real estate.
- Population: ~13,000
- Median rent- 1-bedroom (as of September 2023): $975
- Typical home value (as of August 31, 2023): $478,000
- Renter-occupied households: 52%
*info gathered from Zumper and Zillow.
Historic Third Ward
The Historic Third Ward is a bustling neighborhood known for its art galleries, boutiques, and lively atmosphere. It’s a popular choice for young professionals and artists seeking a vibrant urban lifestyle.
- Population: The population of the Historic Third Ward is challenging to provide an exact figure as it is a specific neighborhood within the larger Downtown Milwaukee area.
- Median rent- 1-bedroom (as of September 2023): $1,550
- Typical home value (as of August 31, 2023): $440,000
- Renter-occupied households: 60%
*info gathered from Zumper and Zillow.
Riverwest
Riverwest is a diverse and eclectic neighborhood east of the Milwaukee River. It’s known for its strong sense of community, art scene, and affordable housing options. Investors looking for a unique and vibrant neighborhood should consider Riverwest.
- Population: The population of Riverwest is included as part of the overall population of Milwaukee, which was estimated to be around 590,000 residents as of 2021.
- Median rent- 1-bedroom (as of September 2023): $875
- Typical home value (as of August 31, 2023): $250,400
- Renter-occupied households: 67%
*info gathered from Zumper and Zillow.
