Investing in CIncinnati

[Rudy Manna]

Hi,

I am from Seattle and own couple of rentals here. As you might know the property market is booming and hence and cash flow on rental properties is terrible (4%-5% gross cap rates). 

I am looking into elsewhere in the country for returns and diversification. I went to university of Cincinnati, so I am somewhat familiar with the neighborhood. Checked some properties in MLS and 4 br/ 2 unit multifamily units going in the range of 100-150k. The current rental rates for a unit are $800-900. Overall looks its reasonably easy to get 15%-20% cap rate and a strong cash flow.

I know that I need to avoid a few areas with high crime rate such as vine, Over the Rhine,  etc, but are there other trade-offs for real estate investing in Cincinnati. Look forward to hear from experienced investors in the area.

[Chris Washington]

@Rudy Manna I just moved to Cincinnati from Los Angeles about 6 months ago (so I'm definitely not an expert in the area), and have been aggressively researching the city since before I moved here. From what I've seen, I do believe Cincinnati is a viable area to invest. There has been some recent, positive economic investment in the greater Cincinnati area, as well as a fair amount of companies expanding their operations/facilities and bringing more jobs. Unemployment rates in Cincinnati still fall below national and OH average. 

I definitely would not say 15-20% cap is "easy", but rents in general look very solid when compares to sales price so you likely will find cap rates north of what you could get in Seattle. Specific location of any property here is key as quality of neighborhoods/tenants change quite dramatically as you move through the greater Cincy area, so I would recommend to do your homework on the specific area you are interested in investing in to ensure you won't be surprised by what you find. 

Best of luck!