The brew city, Milwaukee. Are you looking for a market to invest in? Don’t sleep in Milwaukee. Here are all the reasons you should invest your money in Milwaukee.
Population: Milwaukee is the largest city in Wisconsin and the third-most densely populated metro area in the Midwest. Milwaukee proper has a population of 595,000. The mayor of Milwaukee announced an initiative to grow the population of Milwaukee to 1M in the coming years. The greater Milwaukee MSA has a total population of approximately 1.5M people.
Additionally, Milwaukee has a large population of young professionals and students who prefer renting over buying. Milwaukee is home to several universities, such as Marquette University, University of Wisconsin-Milwaukee, Milwaukee School of Engineering, Alverno, Mount Mary, and Medical College of Wisconsin. These institutions attract thousands of students every year who need housing near campus.
Affordability: Milwaukee offers relatively affordable real estate prices. According to Zillow as of June 2023, the average home value in metropolitan Milwaukee was $196,930. This is still much lower than the national median home value of $349,329. Zillow’s one-year forecast predicts that Milwaukee will have a 2.9% growth which is a stable and consistent growth rate. This means that investors can find attractive deals and enjoy higher returns on their investments. However, as in any market, there are certain neighborhoods where the growth rate is better than others.
Strong rental market: Milwaukee has a strong rental demand, with a high percentage of residents who rent their homes. According to RentCafe, 59% of Milwaukee’s population are renters. This is partly due to the lack of inventory and new construction for single-family homes and condos, which limits the options for buyers. Currently, it is still a strong seller’s market with homes moving quickly with an avg DOM of 18 days. It is still cheaper to rent in Milwaukee than it is to buy. The avg rent for a 1BR unit is $800, a 2BR unit $1,000, and a 3BR unit $1250. Of course, rents will vary by neighborhood class as well. The vacancy rate of Milwaukee per RentCafe is 5.5%, lower than the national avg of 6.8%.
Growing economy: Milwaukee has a diverse economy that is experiencing steady growth. According to the Metropolitan Milwaukee Association of Commerce (MMAC), metro Milwaukee has posted 13 consecutive months of year-over-year job growth, helping to drive the unemployment rate to just 3.5%. The manufacturing sector is especially strong, with job levels higher than before the pandemic. Milwaukee is also known for its history of beer brewing traditions, with several major breweries operating in the city, such as MillerCoors, Pabst Brewing Company, and Lakefront Brewery. Other key industries in Milwaukee include insurance, health care, education, finance, and technology. With companies like Northwestern Mutual, Rockwell Automation, Harley-Davidson, Wisconsin Electric, Johnson Controls, Manpower Group, Kohl’s, Fiserv, and American Family Insurance.
Landlord-tenant laws: the state of Wisconsin is an investor landlord-friendly state. Milwaukee does not have any rent control laws in place. In Milwaukee, you can evict tenants in as soon as 2 weeks for non-payment. Milwaukee does not currently have heavy short-term rental restrictions like other major metros. Lastly, there are local programs that will incentivize investors to purchase properties in target neighborhoods that will give them grants to rehab properties.
Investment outlook: Milwaukee is your typical Midwest market. Prices are affordable and steady compared to high priced and volatile coastal markets. It is a fantastic market to buy and hold to accumulate steady cash flow over the long run. It is one of the few markets where you can still purchase properties at the 1% rule, there are even areas where you can get 2% however it may be a lower neighborhood class. If you are a flipper, there are opportunities and price points to buy around the $100K purchase price with $200K+ ARV or in the more expensive range, purchases around $200K for $400K+ ARV. Milwaukee, believe it or not, is actually a highly ranked visited city for travelers staying at Airbnb. Milwaukee is known as the city of festivals, in the summer there is no shortage of activities. In addition, with many large hospital complexes and Fortune 500 companies, there is a good amount of traveling professionals visiting for work purposes.
Overall this is a great market to find good investment properties for whatever investment strategy you are looking to deploy. One thing to be aware of is that in Milwaukee, neighborhood qualities can change quickly block by block. And there are nice small pockets within not-so-nice areas. There are also gentrifying areas where major developments and neighborhoods are on the rise. So it is highly encouraged that you work with someone who knows the city very well.
If investing in Milwaukee is of interest to you and you need assistance from a local expert. Contact me via DM, comment, or email. Let’s set up a time to discuss and see how I can help you achieve your investment goals and if Milwaukee might work for you. I can connect and refer you to property managers, contractors, and loan officers to help build out a team of local boots-on-the-ground folks. If you have any questions, please drop them below. Stay tuned and check out my future real estate investing posts.