Columbus versus Cleveland

8 Replies

Hi everyone,

I'm looking to invest in some rental properties in Ohio because of the affordable prices and high cap rates. There's a lot of talk about both Cleveland and Columbus, but I'm wondering if anyone has studied/invested in both markets and come to a solid conclusion of which one is better/preferred, and why?

Would love to hear about any and all related experiences, knowledge, etc.

Thanks!

@Chrystal T.  

Welcome to the forums.

I'm a big fan of what Cleveland has to offer, but I'm admittedly biased since that's my own back yard. I don't know anything specific about the Columbus market but I do readily acknowledge that many midwest cities have potentially excellent returns for investors.

Tim

Timothy Murphy III, Real Estate Agent in OH (#SAL.2016005240)
440-374-8403 x210
@C. Timothy Murphy III

Thanks! Admittedly, Cleveland does look a lot better based on what I've researched so far, but Columbus seems to have more properties with tenants already and higher cap rates (approximately $1100 for properties in the $40s range). I'm wondering, though, if the long-term expenses of these properties in Columbus will offset the initial cap rate that the properties allegedly promise to generate. I'm more interested in the financial well-being of these two cities, and how (re)developments are panning out for them - which one poses as a more solid investment and why.

I'm wondering, though, if the long-term expenses of these properties in Columbus will offset the initial cap rate that the properties allegedly promise to generate.

They will.

Hi @Peter Lohmann  ,

Can you please elaborate on the long-term expenses in Colimbus that will offset that cap rate?

Also, as a native of Columbus and aspiring investor, @Chrystal T.  , I would be curious what part of town you are seeing $1100 rents for a house in the 40's.  I would be happy to PM with you and describe the parts of town you might be looking at from afar.

As a broader answer to the question of Cleveland vs Columbus, I think Columbus has some unique institutions that tend to keep the population employed and and area desirable, such as the state capital, OSU, a handful of huge apparel companies, Nationwide (50k employees roughly), and a thriving service sector.  Personally I tend to think of Cleveland as closer to that "rust belt" city and might have been harder hit from a nationwide move away from manufacturing.

That's just my 2 cents at least.

Best,

Brad

Search out some of my previous posts about Columbus, I have gone into detail on the subject in the past.

Originally posted by @Chrystal T. :
@C. Timothy Murphy III

Thanks! Admittedly, Cleveland does look a lot better based on what I've researched so far, but Columbus seems to have more properties with tenants already and higher cap rates (approximately $1100 for properties in the $40s range). I'm wondering, though, if the long-term expenses of these properties in Columbus will offset the initial cap rate that the properties allegedly promise to generate. I'm more interested in the financial well-being of these two cities, and how (re)developments are panning out for them - which one poses as a more solid investment and why.

 Yeah I'm working Columbus all day every day, and I'm really not sure where you'd find anything that fits that criteria?  I guess MAYBE a distressed duplex, but it would be in one of the worst neighborhoods, which Peter can attest to, will not provide that good of a return.  

@Chrystal T.  just my 2 cents but I would say you are asking an unfair question you want "... a solid conclusion of which one is better/preferred, and why?"

The solid conclusion would be dependent on your specific situation and the preferred way it works for you is obviously better. You take  any city name here and compare it to one that has more growth, more stability, more technology industries, more steel plants, more fracking or corn fields. You will find that your ability to make a solid investment there is hinged upon what you do and how well you execute.

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