Willmar contractor finds success in development of rental property
WILLMAR -- Dan Koosman of Willmar has found success in developing and managing rental property. All it takes is a combination of luck, favorable economic conditions and good renters.
"Development and management of rental takes a little bit of luck, with just a lot of paying attention and really following up with getting good renters,'' says Koosman, where his south-facing office on U.S. Highway 12 East looks out on Cambridge Estates he's been developing for nearly 30 years.
"That's the name of the game. You need good renters. Period. It's not the type of thing that you can just go out and build a bunch of units and think it's going to work. It's a marginal-type business and a very long-term business,'' he says.
Koosman, owner of Koosman's Construction of Willmar, started construction in 1975 in Willmar. He did some projects in the metro and St. Cloud areas but has focused mainly on single-family, planned unit development and rental projects in Willmar and Kandiyohi County.
His two main single-family residential developments are Pheasant Run in southeast Willmar, which he started in the early 1980s, and Eagle's Landing in northwest Willmar in the early 1990s. Recently, he developed Emerald Pond, a combination of single-family and rental homes in southeast Willmar.
Koosman started Cambridge Estates about 30 years ago, constructing fourplex units on 23rd Street Southeast. He's been adding duplexes and fourplexes as economic conditions allow and has been learning as he goes.
"Once you have started it, having more units just makes it more feasible. After being in it so long, you start having some natural leads in the rental part and it's just a building process,'' he said.
"There are a number of things that have to be right and one thing is interest rates. At this point you don't build them if they don't make business sense and interest rates have been decent, along with the cost of construction has been decent,'' he said.
Koosman said his company took a break from rental construction because he got busy in single-family residential construction and because financing for rentals the past four to five years was not favorable.
Now it is, he said.
"Because we are contractors, because we are land developers and because we do the management and with decent interest rates, all the elements are right to make it feasible,'' he said.
Koosman thinks people prefer the homey atmosphere of the smaller buildings compared to the larger apartment complexes.
Right now, Koosman is constructing five "higher end'' fourplexes that feature granite countertops, some custom cabinetry and ceramic baths. The lower units have a combination of laminate and carpet flooring. The upper units are all carpeted.
The interiors have an open, spacious feel with subtle separation of the main living area and kitchen. The cabinetry has darker colors, and the solid core doors and woodwork are painted. Unit sizes range from 1,100 to 1,400 square feet.
The upper unit decks and the lower unit walkout patios face a commons area that will feature landscaping, paths and pond with water fountain. A gazebo that had been built years ago for a swimming pool will be remodeled into a fitness center. A sandlot volleyball area and playground will replace the pool.
Koosman says today's renters want nice amenities and nice homes.
"They are rental homes more than apartments,'' he said. "It is a whole different thing. People used to rent before because they couldn't afford a home or weren't going to be in an area very long. Today that's a little bit different.''
Many renters are empty nesters and retired folks returning to the area. He said a woman who rented one of his first apartments is still renting from him today.
Koosman says retaining a hundred percent occupancy is a challenge.
"It isn't a natural,'' Koosman says. "It takes some work and it takes some continual refinement and service that they depend upon.''