Best Kalamazoo Neighborhoods for Rental Property

Click on the map below for rental information on each neighborhood!

At a Glance: Expected Rental Performance

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How we weighed each variable:

40% Cap Rate (Higher is better)

25% Vacancy (Lower is better)

25% Crime (Lower is better)

10% Income-Rent Ratio (Lower is better)

Assumptions:

1. Neighborhoods with an expected <10% cap rate are not viable.

2. Neighborhoods with crime rates of >200% national average are not viable.

In-Depth: Kalamazoo Rental Performance

The Best

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The Vine Neighborhood

Cap Rate: 16%

Vacancy Rate: 4.8%

Income – Rent Ratio: 52%

Crime Rate: 136% HIGHER THAN National Average

The Vine Neighborhood has been a favorite of Real Estate Investors for a long time now. The area has high cap rates and low vacancy. Many residents are either college students at WMU or K-College or work nearby. While this neighborhood is within walking distance to the Central Business District, it also hosts numerous stores, restaurants, and coffee shops.

Knollwood

Cap Rate: 16%

Vacancy Rate: 6%

Income – Rent Ratio: 90%

Crime Rate: 81% HIGHER THAN National Average

Knollwood properties may cost more than those in the vine neighborhoods, but benefit from high demand from students at WMU. Most listed properties here have 4-6 or even 7 bedrooms and see similar returns as the properties within the Vine neighborhood. Many larger buildings can rent out at more than $2,000. Investors may also be interested in owning any of the small multi-unit, student properties in this area.

South Westnedge

Cap Rate: 10%

Vacancy Rate: 5.7%

Income – Rent Ratio: 25%

Crime Rate: 6% HIGHER THAN National Average

While this neighborhood does not boast the highest cap rate, residents in South Westnedge have a very low rent-to-income ratio and there is less crime here than almost anywhere else in the city. The average tenancy duration is more than 1.5 years and renters have a high income stability.

Stuart

Cap Rate: 14%

Vacancy Rate: 4.8%

Income – Rent Ratio: 57%

Crime Rate: 183% HIGHER THAN National Average

The smallest of the Kalamazoo neighborhoods that we've analyzed, Stuart sits adjacent to the campus of Kalamazoo College. Each year the college has around 300 off-campus students that seek nearby rentals, meaning vacancy is lower. While the average home price may be higher in the neighborhood, higher rents mean a decent cap rate--14% in this case.

Oakland/Winchell

Cap Rate: 11%

Vacancy Rate: 4.8%

Income – Rent Ratio: 32%

Crime Rate: 8% HIGHER THAN National Average

The Oakland/Winchell neighborhood is one of the safest in Kalamazoo. Though this neighborhood doesn't boast an exceedingly high cap rate, tenants here are usually long-term and stable. However, finding properties here may be difficult due to the low availability of properties on the market within the neighborhood.

*Honorable Mentions: West Main Hill & Central Business District

The Worst

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Westnedge Hill

Cap Rate: 6%

Vacancy Rate: 12.2%

Income – Rent Ratio: 19%

Crime Rate: 30% HIGHER THAN National Average

Westnedge Hill has one of the lowest crime rates in Kalamazoo and the average home in here costs around $172,000, making it an ideal place for well-to-do families that want to live within a short drive to the downtown. However, rents have a low ceiling for the types of properties found here, usually around $1,000.

Milwood

Cap Rate: 8%

Vacancy Rate: 5%

Income – Rent Ratio: 25%

Crime Rate: 84% HIGHER THAN National Average

Milwood lacks a large student population, but boasts a low income-to-rent ratio and low vacancy, meaning the area is very rent stable. However, properties within this neighborhood average an 8% cap rate, which moves this neighborhood to our "Not Recommended" category.