McDonough (IL) Investor Pulse Report (2025-Q4)

Investors have a significant footprint in McDonough County, owning 1,652 Single-Family Residential properties, which constitutes 18.8% of the total 8,787 SFRs in the market.

The ownership landscape is overwhelmingly composed of individual investors, who own 1,282 properties (77.6%), compared to 429 properties (26.0%) held by companies. This highlights a market driven by local individuals rather than large corporations.

A closer look at the 1,489 distinct landlord entities reveals the scale of operations: the 1,319 individual landlords own an average of just under one property each, while the 170 companies average approximately 2.5 properties per entity.

Investors in this market demonstrate a preference for low-leverage strategies. A commanding 73.4% of the portfolio (1,213 properties) is owned outright with cash, while only 26.6% (439 properties) is financed.

The portfolio's purpose is clearly defined by its high rental concentration. A total of 1,560 properties are rented, meaning 94.4% of the investor-owned housing stock is actively used for rental income.

In Q4 2025, landlords demonstrated a keen ability to acquire properties at a deep discount, paying an average of $46,609. This represents a staggering $72,293 (60.8%) price advantage compared to traditional homeowners, who paid an average of $118,902.

The pricing gap between landlords and homeowners has widened significantly throughout 2025. The trend shifted from landlords paying a 14.5% premium in Q1 to securing successive discounts of 55.6% in Q2, 59.0% in Q3, and peaking at 60.8% in Q4.

This growing chasm in acquisition prices indicates that landlords and homeowners are operating in different segments of the market. Landlords appear to be strategically targeting lower-cost, possibly distressed, properties that are not competing with typical homeowner demand.

The first quarter of 2025 was a notable anomaly. During that period, landlords paid an average of $144,600, a premium of $18,355 over homeowners, a complete reversal of the pattern observed for the rest of the year.

When compared to the pandemic-era (2020-2023) average acquisition price of $107,698, recent landlord purchases are substantially lower, signaling either a market correction or a deliberate strategic shift toward lower-value assets.

Landlords were a significant force in the Q4 2025 market, purchasing 18 of the 90 total SFRs sold and capturing a 20.0% share of all transactions.

The acquisition activity was almost entirely driven by small-scale mom-and-pop investors (Tiers 01-04), who were responsible for 89.5% of all landlord purchases, totaling 17 properties.

The market continues to attract new investors, with 13 new single-property landlords entering in Q4. This group alone acquired 11 properties, accounting for 57.9% of all investor buying activity and demonstrating robust grassroots growth.

Institutional investors (1,000+ properties) had a negligible impact on the market, acquiring just one property. This minimal activity highlights a lack of large-scale corporate acquisition in McDonough County.

A gap in the market was evident, as no purchases were made by landlords in the mid-size tiers (11-50 and 101-1,000 properties), indicating Q4 activity was highly concentrated among the smallest investors and a single large institutional player.

The investor landscape in McDonough County is overwhelmingly dominated by mom-and-pop landlords (1-10 properties), who collectively own 87.0% of all investor-held SFRs, cementing their role as the backbone of the rental market.

Landlords with just a single property represent the largest segment, holding 874 properties. This constitutes 50.1% of the entire investor portfolio, underscoring the importance of small-scale, individual real estate investment.

In stark contrast to the national narrative, institutional investors (Tier 09) have a nearly nonexistent presence. Their portfolio of just 4 properties accounts for a mere 0.2% of the landlord-owned housing stock.

Mid-size investors (owning 11-1,000 properties) hold a combined 223 properties, making up the remaining 12.8% of the portfolio and bridging the gap between small landlords and the institutional tier.

Ownership is highly concentrated at the smallest scale. The top three tiers by property count are all mom-and-pop segments: single-property landlords (50.1%), those with 3-5 properties (20.1%), and those with 6-10 properties (8.9%).

A distinct pattern emerges in ownership structure: individual investors are the majority holders in portfolios of 10 or fewer properties, but a decisive shift to corporate ownership occurs at the 11-20 property tier, where companies control 78 properties (57.4%).

The entry point for real estate investing is almost exclusively individual. In the single-property tier, individuals own 803 of the 888 properties, a commanding 90.4% share, proving this segment is the domain of personal investment.

Corporate ownership becomes increasingly concentrated as portfolio sizes grow. This trend culminates in the 51-100 property tier, where companies own 56 of the 57 properties—a near-total 98.2% share.

Even within the larger mom-and-pop segment (6-10 properties), individuals maintain a strong 76.9% majority, holding 120 properties compared to the 36 owned by companies.

The data strongly suggests a strategic shift in operations as investors scale. The sharp increase in corporate ownership beyond the 10-property mark likely reflects a move to formalize businesses for liability protection and greater operational efficiency.

The geographic distribution of investor properties is highly concentrated, with a single zip code, 61455, serving as the epicenter of activity, holding 1,015 landlord-owned SFRs.

Beyond the primary hub, the 61422 zip code emerges as a significant secondary market for investors, with 236 properties, followed distantly by 61440 with 42 properties.

The highest density of investor ownership is found in the 61452 zip code. Here, one in every three SFR properties (33.3%) is landlord-owned, indicating a deeply saturated rental market relative to its size.

Several other areas also exhibit high investor penetration rates, including 61470 (21.6%), 61455 (19.8%), and 61422 (19.0%), all of which surpass the overall county average of 18.8%.

A key insight is the distinction between high-volume and high-penetration areas. The zip code with the most investor properties (61455) is not the one with the highest ownership rate, highlighting that smaller markets like 61452 are more thoroughly saturated with investor activity.

A major market shift occurred in 2025, as landlords in McDonough County flipped from being net sellers in 2024 (26 buys vs. 32 sells) to aggressive net buyers, acquiring 102 properties while only selling 36.

Institutional investors (1,000+ tier) are moving in the opposite direction of the market. They have been consistently divesting their holdings, acting as net sellers for two consecutive years and selling five properties for every one they purchased in 2025.

Acquisition momentum for the overall landlord market accelerated throughout 2025. Buying activity peaked in Q3 with 41 purchases before settling at a strong 21 purchases in Q4, far outpacing the 7 properties sold.

The net buying trend for the market as a whole is being driven entirely by small and mid-size investors, who are absorbing properties while the largest institutional players are actively reducing their footprint.

In Q4 2025, landlords maintained their strong net buyer position with a 3-to-1 buy-to-sell ratio (21 acquisitions vs. 7 sales), signaling continued confidence and portfolio growth heading into the new year.

During Q4 2025, landlords participated in 21 of the 137 total SFR transactions, capturing a 15.3% share of all market activity.

A pricing inversion was observed this quarter, where the largest institutional investor paid the highest price per property at $77,880. This was 44.4% more than the $53,945 average paid by new, single-property landlords, defying the typical expectation of scaled buyers getting discounts.

Transaction volume was dominated by mom-and-pop landlords (Tiers 01-04), who were responsible for 19 of the 21 landlord-involved transactions, reinforcing that small investors are the primary drivers of market activity.

A crucial finding from Q4 is the complete absence of inter-landlord trading. With 0% of acquisitions coming from other landlords, it is clear that investors are sourcing their properties from the traditional homeowner market rather than from each other.

Acquisition strategies varied dramatically by tier. The price paid ranged from just $10,000 by a medium-large landlord to $77,880 by the institutional buyer, highlighting vastly different asset targets and business models across the investor spectrum.