Being a landlord in Ohio when the population is decreasing

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Being a landlord in Ohio when the population is decreasing

Gary Dezoysa
Orlando, FL · Member since 2011 · 176 posts · 23 votes

Ohio has some great rent yields but I'm scared of not being able to find tenants in the future if the decades-long population decline continues.

I imagine renting gets tougher every year? Or do you guys not notice it?

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Jonathan Kelly
Real Estate Investor · Oshawa, Ontario · Member since 2016 · 36 posts · 22 votes
9y

Hi @Gary Dezoysa,

I have lived in ohio for my entire life.  I know that statistically there appears to be a declining population (see right graphic below). A "migration" of 10,604 people left the state of ohio last year.  But what they don't make obvious is that this isn't a net population change.  Look at the left barchart and you'll see that Ohio actually grew in population last year by 28,162 (births no doubt).  Here is a graphic from census.gov 

So I would say that the people being born here are far ourpacing the young people leaving the state.  

In Ohio I think it's mainly about WHERE you invest and not how you invest.  For instance Columbus is booming right now, and Cleveland is on the rise as well.  A safe bet for renting in ohio is around universities.  You'll constantly have that influx of people who need affordable housing.  Ohio may be undesirable to some but the majority of us who are from here, love it here and aren't going anywhere.  Often times I think statistics can tell an inaccurate story and sensationalize things.  Here is a picture of the US by population.  Ohio ranks #7.  Ohio also borders New York (#4),Pennsylvania (#6), and Michigan(#10) so this general area of the country is pretty strong in terms of population.  No where is like Cali obviously but we're still up there in terms of population.  The only part of the state I'm not sure of is the west side of the state.  Up north you have Toledo, Akron and Cleveland, north east is youngstown, central is columbus, south west is dayton and cincinatti.  In ohio I'd say it's more about picking the right area rather than thinking there is about to be such a decline that you aren't able to rent.  100 years down the road, who knows?  But in the next 10-30 I'd say you're safe.

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  • Sharon Seiter
    Wooster, OH · Member since 2016 · 38 posts · 19 votes
    9y

    I think it depends completely on the area of Ohio. 

    I moved from Youngstown to Columbus last May and the difference is stunning.  In the Youngstown area, jobs are difficult to find and many young people move away if they have the means.  Columbus is the opposite, attracting lots of new residents.  The city is growing steadily and becoming one of the best places to live in the Midwest.

    In both situations, there are still lots of opportunities for landlords.  In Youngstown, the economic circumstances mean a much higher proportions of people are renting since they lack the means to buy a home.  In Columbus, supply of multifamily housing is still growing to keep up with the increasing demand, and we have very low vacancy rates at something like 5%.

    As long as you understand the market you choose to get into, you should not have a problem finding tenants for years to come.

    2Reply
  • Jonathan Kelly
    Real Estate Investor · Oshawa, Ontario · Member since 2016 · 36 posts · 22 votes
    9y

    Hi @Gary Dezoysa,

    I have lived in ohio for my entire life.  I know that statistically there appears to be a declining population (see right graphic below). A "migration" of 10,604 people left the state of ohio last year.  But what they don't make obvious is that this isn't a net population change.  Look at the left barchart and you'll see that Ohio actually grew in population last year by 28,162 (births no doubt).  Here is a graphic from census.gov 

    So I would say that the people being born here are far ourpacing the young people leaving the state.  

    In Ohio I think it's mainly about WHERE you invest and not how you invest.  For instance Columbus is booming right now, and Cleveland is on the rise as well.  A safe bet for renting in ohio is around universities.  You'll constantly have that influx of people who need affordable housing.  Ohio may be undesirable to some but the majority of us who are from here, love it here and aren't going anywhere.  Often times I think statistics can tell an inaccurate story and sensationalize things.  Here is a picture of the US by population.  Ohio ranks #7.  Ohio also borders New York (#4),Pennsylvania (#6), and Michigan(#10) so this general area of the country is pretty strong in terms of population.  No where is like Cali obviously but we're still up there in terms of population.  The only part of the state I'm not sure of is the west side of the state.  Up north you have Toledo, Akron and Cleveland, north east is youngstown, central is columbus, south west is dayton and cincinatti.  In ohio I'd say it's more about picking the right area rather than thinking there is about to be such a decline that you aren't able to rent.  100 years down the road, who knows?  But in the next 10-30 I'd say you're safe.

    8Reply
  • Ryan Arth
    Developer · Cleveland / Akron, OH · Member since 2008 · 922 posts · 399 votes
    9y
    Gary Clisele the macro is always important but so is the micro. Trends are important, but when you are renting or selling, you are at that moment only looking for one good fit. If your property is in better condition, a better location or is a better value than others available, you will have a good chance of finding your client. Will these cities completely vacate in our lifetime, no. Will population decline trends retard upward pricing pressure due to scarcity, it is possible. Can you still be making money and reaching your goals while that is happening, absolutely.
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  • Melroy D'Souza
    Investor · Hilliard, OH · Member since 2014 · 60 posts · 25 votes
    9y

    @Gary Dezoysa

    I must second the opinions of the others, there are areas in Ohio that are growing. Look for the 3 largest Ohio cities. They still have a decent population to work with. 

    BTW, you are never going to have everything - great cash flow, great appreciation, great future outlook all in one place :-) ... It might happen temporarily like in 2008-2010 in some of the high growth areas or more recently in some Texas cities, but then as soon as investors start buying up properties, you're not going to see cash flow any longer.

    If you are an out of state investor, why limit yourself to one state? Diversify - buy a few in the mid west, buy some in the south. Within each area, select 2 or 3 states. That will reduce the sting if a "Detroitesque" situation comes along in any one city.

    3Reply
  • Brandon Schlichter
    Real Estate Agent · Circleville, OH · Member since 2008 · 633 posts · 488 votes
    9y

    Columbus is seeing a 2% to 3% YEAR OVER YEAR population growth, the explosion is phenominal.

    Ohio from what i can tell actually reversed the decline trend a few years ago, maybe 2010 or 2011 or so. These statistical points are all very rough estimates because the official census is only done every 10 years, so the 'official' growth/decline numbers were actually estimates from the 2000 to 2010 time frame.

    0Reply
  • Brandon Schlichter
    Real Estate Agent · Circleville, OH · Member since 2008 · 633 posts · 488 votes
    9y

    As a note, here's my rental list of people who want to rent off my company here in Ohio, been capturing names/phone numbers for about 6 months now and this is how far I've got. 

    2Reply
  • Kristopher HanksPro Member
    Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
    9y

    @Gary Dezoysa Make Cleveland great again! 

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    9y
    Originally posted by @Gary Dezoysa:

    Ohio has some great rent yields but I'm scared of not being able to find tenants in the future if the decades-long population decline continues.

    I imagine renting gets tougher every year? Or do you guys not notice it?

     There is very high rental demand actually.

    The thing is you need to provide the marketplace with a quality asset in a decent neighborhood. The landlords who try to buy the cheapest house in the cheapest neighborhood are the ones who run into vacancy problem. Even in those neighborhoods the demand is still pretty high but it's nobody you really want to rent to. Those that would make quality renters simply choose to live in better assets in better neighborhoods.

    2Reply
  • Eric P.
    New York City, NY · Member since 2016 · 470 posts · 348 votes
    9y

    @Gary Dezoysa The 2 most important points here:

    1) You can't judge this thing at the state level. Every state has economically strong & economically weak areas.

    2) Even within a city / metro area, some neighborhoods are losing people while others are gaining people. Just bc a city / metro area is losing population doesn't mean the city is a wasteland. People can entirely abandon one part of a city and yet the rest of the city may be thriving. Take it all with a grain of salt.

    Final point - if you're ever truly wondering, take a visit to one of these "dying Midwest cities" - talk to the people there (especially the young people) & you'll quickly learn these cities ain't dying at all. Clevelanders in their 20s absolutely adore their city and they ain't goin' anywhere!

    2Reply
  • Jen Kurtz
    Professional · Pittsburgh, PA · Member since 2013 · 88 posts · 42 votes
    9y

    100% agree with @Eric P. and @James Wise! There is good and bad pockets in any area. Myself, being from Youngstown, I wouldn't advise buying property unless you can get a good deal in the suburbs where there are things to do and most of the jobs are located. But yes, many many people are leaving this area. Although surprisingly, I do sometimes see some people move into the area. I am always surprised but I just don't let that part show lol :) Definitely have a nice clean, kept, property that can compete with others so you can get those quality renters. The places that lack anything nice and are old and unasthetically pleasing will only get interest from people you do not want interest from (bad credit, no verifiable income, criminals)

    I love the midwest. Ohio is a wonderful state and so is PA! Remnants of old industries, but in many places tons of revitalization and new investment, and jobs.

    1Reply
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