Looking at Cleveland, Concerned About Buying In The Snowbelt
Investor-friendly agents in Cleveland, OH
See the agents BiggerPockets members work with in Cleveland, OH.
See agentsMost Popular Reply
Investor 路 Youngstown, OH 路 Member since 2017 路 2k+ posts 路 2k+ votes
4yWe're pretty slammed with investors for an area where everyone is losing money.
20 Replies
- 4yMichael MagnoBusiness MemberReal Estate Agent 路 Wadsworth, OH 路 Member since 2017 路 234 posts 路 168 votes
Every part of the country has differing climate and differing weather patterns. Just like anywhere, homes need to be maintained. Part of maintaining homes is dealing with rain, snow, etc. Not sure who is claiming "if it snows" you'll lose money. It snows in 3/4 of the country in the winter. People invest everywhere.
- 4yNicholas MischPro MemberInvestor 路 Broadview Hts, OH 路 Member since 2016 路 310 posts 路 280 votes
Quote from @Jeff G.:
I'm looking at Cleveland, OH and a bit farther south to Akron, OH for my first rentals. I'm primarily interested in multifamily rentals. My concern is, it looks like Cleveland is part of the Snowbelt. I've seen warnings in other BP posts to the effect, "no matter how good the cash flow looks on paper, if it's in the Snowbelt you will lose money."
What is the situation like on the ground? How badly am I likely to get burned by snow removal costs if I buy in Cleveland? Is Akron better in this regard?
Oh boy, so much to unpack in such a short post. I only have invested in Cleveland, Akron and surrounding suburbs currently, and have not lost a penny. I have heard people reference the "rust belt" which generally refers to the northern states and lower which have a lot of industry, and who's main business is or used to be steel. "Rust belt" states do often have lower property values with slower appreciation, but they generally have some of the best cash flow. As far as the "snow belt" is concerned 60% of the population lives in states and areas that have snow seasons, so in my opinion, to avoid investing in any area that gets snow would greatly reduce opportunities for cash flow, not to mention many people who want to invest never would be able to afford investing in places that are always warm and sunny, so they would never be able to get started. Please understand I believe each investor must decide what they want to invest in and what they are comfortable with, but also be very carful being overwhelmed with all the noise and opinions out there, because while many people in investing know what they are talking about, many also give advice when they really don't know what they are talking about and many haven't even invested. Either way I wish you only the best on your investing journey.
- Property Manager 路 Cleveland, OH 路 Member since 2020 路 268 posts 路 315 votes4y
Are they specifically referring to snow or the economics of the area? There are a lot of people investing in Cleveland that have made A LOT of money. It seems over simplified to say that a region can't be profitable for real estate investment.
In Cleveland most owners do not provide snow removal except in multifamily buildings with parking lots so that isn't a huge deal. You do have to stay on top of maintenance at the property and make sure that you are budgeted for capital expenses over time. That being said there are lots of great properties in the market that can be money makers, there are several agents on this forum that focus on investment properties and should be able to help you find something. Just make sure you know that the neighborhood is, I have seen lots of international investors lately that want cheap homes in bad neighborhoods because the numbers look good on paper. They key is that they only look good on paper, reality is that many managers won't go to bad neighborhoods or you will possibly be dealing with more issues on a regular basis.
I highly recommend coming to see the city before buying, it can be very eye opening and will help you understand your investment.
- Rental Property Investor 路 Columbus, OH 路 Member since 2017 路 3k+ posts 路 3k+ votes4y
Quote from @Jeff G.:
I'm looking at Cleveland, OH and a bit farther south to Akron, OH for my first rentals. I'm primarily interested in multifamily rentals. My concern is, it looks like Cleveland is part of the Snowbelt. I've seen warnings in other BP posts to the effect, "no matter how good the cash flow looks on paper, if it's in the Snowbelt you will lose money."
What is the situation like on the ground? How badly am I likely to get burned by snow removal costs if I buy in Cleveland? Is Akron better in this regard?
In Ohio we can experience all 4 sessions in one day. I have never had a problem with snow removal with any of my properties in Columbus. I help clients find deals all the time in those areas. I think it鈥檚 all about finding a good deal and the right location. I recommend the major cities in Ohio:
-Columbus, great for appreciation, pp is a bit higher around $220k for multifamily
-Cincinnati, has a mix of cash flow and appreciation, average multifamily around $180k
-Cleveland, has alot of cashflow potential, average multifam around $140k
There are other smaller markets like Dayton, Akron, and Toledo, however there is not alot of economic drivers to those areas.
Looking for cashflow? Look into Cleveland, its got good cashflow potential with appreciation happening as well.
Looking for appreciation come to Columbus, there are still 1% deals, but the more attractive part is the population growth and other economic drivers!
All in all Ohio in my opinion is one of the best markets and I do not think you can go wrong. Get started and it will be only good things for your future!
- Investor 路 Youngstown, OH 路 Member since 2017 路 2k+ posts 路 2k+ votes4y
We're pretty slammed with investors for an area where everyone is losing money.
- Member since 2018 路 150 posts 路 200 votes4y
Seems like whoever made such a general statement had a negative experience in "the snow belt". In my 27 years of investing in the Cleveland market, I have seen hundreds of great deals and hundreds of bad deals. People are making money with real estate in Cleveland. I'm sure some people are also losing money in Cleveland, other "snow belt" locales, and throughout the country. Every deal stands on its own and needs to be underwritten independently. Every deal has its own pros and cons, risks and rewards. If you're looking for long term cash flow stability coupled with moderate appreciation, the Cleveland market has many strong investment options. As with all OOS property investment, make sure you have compiled a good team of professionals (realtor, GC, Property manager). Best of luck to you!
- Rental Property Investor 路 Brooke Park Drive 路 Member since 2018 路 1k+ posts 路 2k+ votes4y
Quote from @Steven Foster Wilson:
Quote from @Jeff G.:
I'm looking at Cleveland, OH and a bit farther south to Akron, OH for my first rentals. I'm primarily interested in multifamily rentals. My concern is, it looks like Cleveland is part of the Snowbelt. I've seen warnings in other BP posts to the effect, "no matter how good the cash flow looks on paper, if it's in the Snowbelt you will lose money."
What is the situation like on the ground? How badly am I likely to get burned by snow removal costs if I buy in Cleveland? Is Akron better in this regard?
In Ohio we can experience all 4 sessions in one day. I have never had a problem with snow removal with any of my properties in Columbus. I help clients find deals all the time in those areas. I think it鈥檚 all about finding a good deal and the right location. I recommend the major cities in Ohio:
-Columbus, great for appreciation, pp is a bit higher around $220k for multifamily
-Cincinnati, has a mix of cash flow and appreciation, average multifamily around $180k
-Cleveland, has alot of cashflow potential, average multifam around $140k
There are other smaller markets like Dayton, Akron, and Toledo, however there is not alot of economic drivers to those areas.
Looking for cashflow? Look into Cleveland, its got good cashflow potential with appreciation happening as well.
Looking for appreciation come to Columbus, there are still 1% deals, but the more attractive part is the population growth and other economic drivers!
All in all Ohio in my opinion is one of the best markets and I do not think you can go wrong. Get started and it will be only good things for your future!
Toledo has plenty of economic drivers. Maybe its time to update your lame canned response you copy/paste every day on different forums?
- Rental Property Investor 路 Columbus, OH 路 Member since 2017 路 3k+ posts 路 3k+ votes4y
Quote from @Account Closed:
Quote from @Steven Foster Wilson:
Quote from @Jeff G.:
I'm looking at Cleveland, OH and a bit farther south to Akron, OH for my first rentals. I'm primarily interested in multifamily rentals. My concern is, it looks like Cleveland is part of the Snowbelt. I've seen warnings in other BP posts to the effect, "no matter how good the cash flow looks on paper, if it's in the Snowbelt you will lose money."
What is the situation like on the ground? How badly am I likely to get burned by snow removal costs if I buy in Cleveland? Is Akron better in this regard?
In Ohio we can experience all 4 sessions in one day. I have never had a problem with snow removal with any of my properties in Columbus. I help clients find deals all the time in those areas. I think it鈥檚 all about finding a good deal and the right location. I recommend the major cities in Ohio:
-Columbus, great for appreciation, pp is a bit higher around $220k for multifamily
-Cincinnati, has a mix of cash flow and appreciation, average multifamily around $180k
-Cleveland, has alot of cashflow potential, average multifam around $140k
There are other smaller markets like Dayton, Akron, and Toledo, however there is not alot of economic drivers to those areas.
Looking for cashflow? Look into Cleveland, its got good cashflow potential with appreciation happening as well.
Looking for appreciation come to Columbus, there are still 1% deals, but the more attractive part is the population growth and other economic drivers!
All in all Ohio in my opinion is one of the best markets and I do not think you can go wrong. Get started and it will be only good things for your future!
Toledo has plenty of economic drivers. Maybe its time to update your lame canned response you copy/paste every day on different forums?
I guess I should rephrase, "Compared to cities like Columbus, the tertiary markets don't have many economic drivers, usually its one to four large establishments"
- Real Estate Agent 路 Cleveland, OH 路 Member since 2021 路 383 posts 路 361 votes4y
Snow removal cost is something you will have to plan in if you choose to invest anywhere that snows regularly every year. Simply make sure that you are including these costs in your calculations to make sure that you are not missing on an expense. Do keep in mind too that in the winter there is no need for lawncare, so those expenses can be moved out of the equation for some time, helping offset any increases in cost during winter months. Also, Akron will suffer from snow nearly just as much as Cleveland. I wouldn't let that sway you from a market entirely because of lake effect for lakeshore properties.
- 4yEric LarsonBusiness MemberReal Estate Broker 路 Wooster, OH 路 Member since 2016 路 14 posts 路 6 votes
@Jeff G. I live just South of Cleveland, and have lived in the area for most of my life. The term snowbelt is 100% real, but don't panic. What are you looking to invest in? What neighborhoods? What type of product? We typically have about 6-8 real snow "events" to worry about. If you build that into your plan then you should be ok.
Larson Real Estate Investing 55 Reviews - Real Estate Coach 路 Robbinsville, NJ 路 Member since 2017 路 185 posts 路 99 votes4y
Quote from @Jeff G.:
I'm looking at Cleveland, OH and a bit farther south to Akron, OH for my first rentals. I'm primarily interested in multifamily rentals. My concern is, it looks like Cleveland is part of the Snowbelt. I've seen warnings in other BP posts to the effect, "no matter how good the cash flow looks on paper, if it's in the Snowbelt you will lose money."
What is the situation like on the ground? How badly am I likely to get burned by snow removal costs if I buy in Cleveland? Is Akron better in this regard?
Why are you looking at Cleveland when you are in CT? Have you been onsite to the area? There are no deals that cash flow in CT? I live in NJ very similar to the prices of CT and can find entry homes for under 200K that cash flow in good areas. Why are you looking outside of where you live?
- 4yCorby GoadeBusiness MemberInvestor 路 Boise, ID 路 Member since 2014 路 3k+ posts 路 3k+ votes
David Greene does such a great job explaining this concept in the "Seeing Greene" podcasts. Not snow removal specifically, but the cost/risk balance of investing. The "snow belt" has generally less expensive real estate and higher cash flow for a reason- things like this- expenses and maintenance costs are higher. You will either be more actively involved in the property or have higher maintenance costs through your PM than you would in other markets. That's the price you pay for higher cash flow.
There are way more details I could go in to, but the podcasts do a much better job of explaining it than I ever could- I'd dive in to those.
Good luck!
- 4yTim DelaneyPro MemberBuffalo, NY 路 Member since 2018 路 790 posts 路 530 votes
@Jeff G. I would suggest you re-examine how you are deciding on a market to invest in. I would hope that you used some metric or data point to decide that you were interested in Cleveland in the first place. Don鈥檛 then run away because a few people anecdotally said you can鈥檛 make money if it snows. I invest in Buffalo, not far from Cleveland, and do well. Not many people are aware, but it snows pretty heavily in Buffalo too 馃ぃ
- Because, it looks like I might be able buy more properties in OH than CT. That might mean higher cash flow, assuming there isn't something I'm not seeing. So, my question about the snowbelt was more me seeing if this was a more significant factor than was obvious. I wanted to be sure my back of the napkin analysis wasn't misleading me.
Quote from @Paul Camuto:
Quote from @Jeff G.:
I'm looking at Cleveland, OH and a bit farther south to Akron, OH for my first rentals. I'm primarily interested in multifamily rentals. My concern is, it looks like Cleveland is part of the Snowbelt. I've seen warnings in other BP posts to the effect, "no matter how good the cash flow looks on paper, if it's in the Snowbelt you will lose money."
What is the situation like on the ground? How badly am I likely to get burned by snow removal costs if I buy in Cleveland? Is Akron better in this regard?
Why are you looking at Cleveland when you are in CT? Have you been onsite to the area? There are no deals that cash flow in CT? I live in NJ very similar to the prices of CT and can find entry homes for under 200K that cash flow in good areas. Why are you looking outside of where you live?
I would rather have more properties because it distributes my risk. Turnover hurts less the more doors I have, etc. As for why OH instead of my own back yard. Well, CT is a very blue state. Therefore, taxes are needlessly high. Many property owners pay more in property taxes than they do their mortgages; it's ridiculous.
I have family in MI, so I have driven through parts of OH. Obviously passing through via the Interstate, just stopping for gas, or stopping for food in Sandusky on my way to Cedar Point isn't the same thing as thoroughly driving an area and getting a sense of the neighborhoods. I do intend to drive the area before I start buying up properties there.
Right now, I'm just crunching numbers for things I see on Zillow, using The Ultimate Guide to Grading Cleveland Neighborhoods as a very rough guide, and trying to be as methodical about this as possible. Quote from @Tim Delaney:
@Jeff G. I would suggest you re-examine how you are deciding on a market to invest in. I would hope that you used some metric or data point to decide that you were interested in Cleveland in the first place. Don鈥檛 then run away because a few people anecdotally said you can鈥檛 make money if it snows. I invest in Buffalo, not far from Cleveland, and do well. Not many people are aware, but it snows pretty heavily in Buffalo too 馃ぃ
That's Interesting. I had thought about Syracuse, NY because of the potential for student rentals. That was the other area besides Cleveland where conservative numbers seemed to work well and I could more than one multifamily with my budget.
A recession is inevitable eventaully. So, I'm basically looking for recession proof housing. In my mind that's low income or student housing. I welcome other views though. If anyone here has an example of another niche doing well regardless of the ups and downs of the economy, I'm all ears.
- Real Estate Broker 路 Cleveland, OH 路 Member since 2018 路 227 posts 路 133 votes4yThe Cleveland / Akron market is still great for cash flow. Prices have gone up, but so have rents. And I've never seen this much demand for rentals since I've been doing this. But a lot of people already made some good points above. You just really need to have a good property manager who can make sure your properties are fully functioning during the winter months. The last PM I worked with were so incompetent that their were multiple properties I was leasing that had the power off during most, if not all, of the winter months. I know there was damage to these houses too, so you have to be careful but other than doing your due diligence, it's just as good of a place to invest than anywhere else.
- 4yJoshua JanusBusiness MemberRealtor 路 Cleveland, OH 路 Member since 2021 路 1k+ posts 路 1k+ votes
Quote from @Jeff G.:
Quote from @Tim Delaney:
@Jeff G. I would suggest you re-examine how you are deciding on a market to invest in. I would hope that you used some metric or data point to decide that you were interested in Cleveland in the first place. Don鈥檛 then run away because a few people anecdotally said you can鈥檛 make money if it snows. I invest in Buffalo, not far from Cleveland, and do well. Not many people are aware, but it snows pretty heavily in Buffalo too 馃ぃ
That's Interesting. I had thought about Syracuse, NY because of the potential for student rentals. That was the other area besides Cleveland where conservative numbers seemed to work well and I could more than one multifamily with my budget.
A recession is inevitable eventaully. So, I'm basically looking for recession proof housing. In my mind that's low income or student housing. I welcome other views though. If anyone here has an example of another niche doing well regardless of the ups and downs of the economy, I'm all ears.
If you are looking for (potential) recession proof housing, I would buy in an area where the job market and population is growing faster than the national average, and that is Columbus, Ohio. The last 12 month appreciation rate was 8% higher than the national average as well, and the population has been growing year over year at a faster rate for the last 10 years. There is a large housing shortage here with 30,000 new jobs in 2022 and only 3,000-4,000 new single family homes being built so single family homes especially are rising rapidly.
Check out The Complete Guide to the Columbus, Ohio Real Estate Market which goes through the market here is a whole and can guide you to the areas that are most affectedby this growth.
- Property Manager 路 Cleveland, OH 路 Member since 2016 路 67 posts 路 53 votes4y
For single-family homes we have our tenants handle snow removal. For multi-family properties with 2-3 units we also have tenants responsible. For buildings with 4+ units the owner handles it (we as the PM use our contractors) but it is usually only a few hundred dollars per season so if that makes or breaks your deal, the margins were too thin to begin with.
- Investor 路 Cleveland 路 Member since 2022 路 131 posts 路 115 votes4y
As someone who grew up in Cleveland and also helps investors in Cleveland all the time, I can assure you that there is plenty to be made even though it snows here for a few months out of the year. As Shane Kelly said in his response, you can remove lawncare expenses during the winter months. The last few winters haven't been too bad either. Just a few days of heavy snow here and there. DM me if you have any questions I can help you with. I'm a lender in the area and have connections to realtors, title companies, insurance agents and anything else you may need.
- Rental Property Investor 路 Dayton, OH 路 Member since 2015 路 312 posts 路 273 votes4y
If you are local to the area, what we call the snowbelt is centered around my home town of hsrpersfield. They get nearly three times as much snow as anywhere else nearby.. the area is also over the top in wine production and consumption. Enjoy Ohio wine country, but watch out for enebriation during whiteout. Snow is tapering off,, but lake effect snow will continue over the snowbelt areas... that's the forecast all winter.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.