Investing in Cleveland
Hello everyone,
I see some good buy and hold deals in Cleveland, Ohio that can, potentially, cash flow well. The thing that concerns me is the age of the homes. Most of them were built in the early 1900s. To those of you who invest in this area, what are your experiences with these older homes? Does maintenance and capex eat into your cash flow? How do you go about minimizing this risk? I am in touch with a reputable property management firm in the area who has excellent reviews and referrals. This does give me some level of comfort. I look forward to hearing your advice and experiences.
Thanks,
Abbas
Most Popular Reply
@Abbas Raza The average age depends on where you buy. The city was built first, then the inner ring suburbs, etc. Parma was built up after the war, as were many of the other suburbs (1950's). Split levels in Independence in the 70's.
Yes, I have seen other investors saying that they don't touch things built before 1980, but that isn't really practical in many areas of Cleveland, just due to the history of the area.
Yes maintenance and capex will eat into cashflow, as with many RE investments. Even after accounting for these items, you can be profitable. Some areas will never cashflow, the same as some entire metropolitan areas will never cashflow. The demand and quality/age of houses in those areas drive prices above what can be justified for rentals, as the rent rate doesn't reflect these increased values.
In Cleveland, you have 16K houses though, and million plus homes, painting with a broad brush (Cleveland is a good market to invest, Cleveland's housing stock is old) is the same as USA today saying housing is down. You can't speak for everything, just on average.