Lee (IA) Investor Pulse Report (2025-Q4)

Investors hold 1,580 single-family residential properties in Lee County, which constitutes 14.4% of the total 10,963 SFRs in the market.

Individual 'mom-and-pop' landlords are the definitive backbone of the local rental market, owning 1,201 properties or 76.0% of the investor-owned inventory, dwarfing the 392 properties (24.8%) held by companies.

This individual dominance is also reflected in the entity count, where 1,404 individual landlords operate, a figure more than 7 times greater than the 198 company landlords in the county.

A strong preference for cash ownership is evident, with 1,193 properties (75.5%) owned outright, compared to only 387 properties (24.5%) that are financed, suggesting a low-risk, long-term hold strategy among local investors.

The portfolio is overwhelmingly focused on rentals, with 1,512 properties (95.7%) classified as rented, confirming the primary business model for SFR investors in Lee County.

Investors in Lee County demonstrate a remarkable ability to acquire properties at a deep discount. In Q4 2025, landlords paid an average of $92,389, which is 39.4% less than the $152,551 average paid by traditional homeowners—a substantial cash difference of $60,162.

The Q4 price advantage is not an anomaly but part of a persistent trend throughout 2025. Landlords secured even larger discounts in previous quarters, paying 61.6% less in Q3 ($109,780 difference) and 50.7% less in Q2 ($79,208 difference).

This consistent, significant gap suggests that investors are successfully targeting distressed properties, off-market deals, or properties requiring renovations that are less appealing to typical homebuyers.

While overall home prices have fluctuated, the investor discount has remained a powerful market dynamic, allowing landlords to build equity immediately upon purchase and achieve higher potential returns.

Comparing prices over time, the average landlord acquisition price in 2025 ($84,873) remained nearly flat compared to 2024 ($84,074), indicating a stable purchasing environment for investors despite broader market shifts.

Investor activity accounted for a significant portion of the market in Q4, with landlords purchasing 29 of the 147 total SFRs sold, capturing a 19.7% market share.

The quarter was entirely driven by small-scale investors. Mom-and-pop landlords (owning 1-10 properties) made up 100.0% of all investor acquisitions, highlighting the grassroots nature of the local rental market.

New entrants are a key feature of the market, as 21 entities purchased their very first rental property, representing the largest group of active buyers and signaling continued growth at the smallest scale.

Drilling down into the tiers, single-property landlords (Tier 01) were the most active, buying 16 properties, followed by small landlords (Tier 03, 3-5 properties) who acquired 10 properties.

Institutional investors (Tier 09) were completely absent from the purchasing landscape in Q4, acquiring zero properties and reinforcing that Lee County's investor market is dominated by local, small-scale players.

The investor landscape in Lee County is overwhelmingly dominated by small-scale operators. Mom-and-pop landlords (owning 1-10 properties) control a massive 92.2% of all investor-owned SFRs.

Single-property landlords form the bedrock of this market, with 980 properties making up 60.0% of the entire investor portfolio, indicating a low barrier to entry and widespread participation by local individuals.

In stark contrast, institutional investors (1000+ properties) have a minimal footprint, owning just 5 properties, which accounts for only 0.3% of the investor market. This challenges the common narrative of large corporations controlling residential housing.

Mid-size landlords (11-1,000 properties) also hold a small share, collectively owning 123 properties, or 7.6% of the investor portfolio.

The ownership structure is highly fragmented and concentrated at the bottom, with 85.3% of all investor-owned properties held by landlords with 5 or fewer properties, underscoring the hyper-local character of the rental market.

A distinct pattern emerges when analyzing ownership by entity type across tiers: individuals dominate smaller portfolios, while companies control larger ones. Individuals own 89.7% of all single-property (Tier 01) investor homes.

The crossover point occurs in the 6-10 property tier, where companies become the majority owners for the first time, holding 68 properties (60.2%) compared to the 45 properties (39.8%) held by individuals.

This trend accelerates in larger tiers, with companies owning a commanding 81.7% of properties in the 11-20 property tier, demonstrating a clear strategic shift towards formal incorporation as portfolios scale.

Even so, individuals maintain a presence across most of the spectrum, owning 76.4% of properties in the 3-5 property tier and even 18.3% in the 11-20 property tier.

This data illustrates a typical investor lifecycle in Lee County: individuals start small, and those who successfully grow their portfolios are more likely to incorporate their holdings for liability and financial purposes.

Investor activity in Lee County is geographically concentrated in its largest population centers. The zip code for Keokuk (52632) has the highest absolute number of investor-owned homes at 664 properties.

Fort Madison (52627) follows closely with 619 investor properties, making these two areas the primary hubs for rental housing in the county.

While larger towns lead by count, some smaller, more rural zip codes exhibit the highest rates of investor penetration. Donnellson (52624) has the top ownership rate, with 29.0% of its housing stock owned by investors.

Similarly, West Point (52656) and Montrose (52639) show significant investor presence relative to their size, with ownership rates of 9.3% and 14.2% respectively.

This distinction between high-volume and high-percentage areas reveals different market dynamics, with investors targeting both urban density in Keokuk and Fort Madison and specific opportunities in smaller communities.

Investors in Lee County are in a strong accumulation phase, consistently buying more properties than they sell. In Q4 2025, they were decisive net buyers, with 37 acquisitions against only 12 dispositions.

This pattern of net buying has been consistent over the last two years. For the full year of 2025, landlords purchased 117 properties while selling just 42. In 2024, the trend was even stronger, with 127 buys versus 32 sells.

The data shows no signs of a landlord sell-off; instead, it points to sustained confidence and expansion within the local rental market.

Institutional investor activity is minimal but follows the same net-buyer trend. In 2025, the 1000+ tier entities bought 3 properties and sold only 1, indicating a slight expansion even at the largest scale.

The steady transaction volume across quarters suggests a stable and liquid market where investors are continuously able to find and execute on new opportunities.

Investors played a key role in market liquidity during Q4, participating in 37 of the 213 total SFR transactions, for a market share of 17.4%.

Activity was exclusively driven by smaller investors, with 100% of the 37 transactions conducted by mom-and-pop landlords (Tiers 01-04).

A notable pricing strategy emerged among tiers. New, single-property landlords paid the lowest average price at $63,628, likely targeting entry-level or fixer-upper properties. In contrast, more experienced small landlords (3-5 properties) paid the highest average price at $164,438, suggesting they are acquiring more valuable or turn-key assets.

Inter-landlord trading is a component of the market, particularly for established investors. Landlords in the 3-5 property tier sourced 36.4% of their acquisitions (4 of 11 transactions) from other landlords, indicating a mature market for trading rental assets.

New investors (Tier 01) and two-property landlords (Tier 02) did not purchase any properties from other landlords, suggesting they primarily acquire homes from the traditional homeowner market.