Looking for info on Cleveland Investment Market

Insurance Agent · Nationwide · Member since 2022 · 3 posts · 4 votes

Hello all, New to posting here but I am very interested in investing around the Cleveland, OH area and would love to hear some pros and cons of this market. My home state prices are high currently so I am looking at long distance options and have been looking into Cleveland based on home prices and decent rents.

Thank you

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Steven Foster Wilson

Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes

Quote from @Scott Miranda:

Thank you

Hey Scott, welcome to BiggerPockets. Cash flow is king in Cleveland, however appreciation is lacking and seems to be along with the US national average. The city covers neighborhood from F to A classes. Whereas cities like Columbus have some cash flow, but tons of appreciation! You could throw a dart at a Columbus map and it would hit somewhere that'll make a good investment. I invest on both markets. If you need any help in finding a great neighborhood to start on, let's connect and discuss how I can help you out.

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DuWayne GregoryPro Member
Rental Property Investor · Long Island, NY · Member since 2020 · 13 posts · 10 votes
3y
I’m also looking in that market.
2 Reply
Alon A.
Investor · Member since 2023 · 135 posts · 47 votes
3y
me too !
1 Reply
Ryan Rock
Sacramento · Member since 2019 · 54 posts · 24 votes
3y
me too!
1 Reply
Gino BarbaroPro Member
Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
3y
@Scott Miranda
Do you think your state prices are high? You should look at other cities and make a comparison. If Cleveland is your back yard, then I would focus my efforts there, or at least another Ohio market, such as Cincinnati, Columbus.
Not a fan of the population decline, but the market does have higher cap rates, and you will be able to find cash flowing deals.
Gino
Podcast Guest on Show The “Conveyor Belt” System That’ll Build You a BIG Rental Portfolio Quickly
1 Reply
Steven Foster Wilson
Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
3y
Quote from @Scott Miranda:

Hello all, New to posting here but I am very interested in investing around the Cleveland, OH area and would love to hear some pros and cons of this market. My home state prices are high currently so I am looking at long distance options and have been looking into Cleveland based on home prices and decent rents.
Thank you

Hey Scott, welcome to BiggerPockets. Cash flow is king in Cleveland, however appreciation is lacking and seems to be along with the US national average. The city covers neighborhood from F to A classes. Whereas cities like Columbus have some cash flow, but tons of appreciation! You could throw a dart at a Columbus map and it would hit somewhere that'll make a good investment. I invest on both markets. If you need any help in finding a great neighborhood to start on, let's connect and discuss how I can help you out.
6 Reply
Gino BarbaroPro Member
Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
3y
@Steven Foster Wilson
If it doesn't cash flow, let the grass grow!
Cash flow will be coming back into vogue soon
Gino
Podcast Guest on Show The “Conveyor Belt” System That’ll Build You a BIG Rental Portfolio Quickly
0 Reply
Patrick DruryBusiness Member
Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
3y
@Scott Miranda
Cleveland is a solid market for investing out of state for cash flow
[email protected]614-412-4565
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2 Reply
Brandy RollinsPro Member
Rental Property Investor · Cleveland, OH · Member since 2023 · 11 posts · 6 votes
3y
Hi Scott,
I’m new to this platform but a native Clevelander and also an investor.
Lots of pros here! Low home prices compared to similar markets. Great market for house hacking since the mortgages are low, which means rents will cover the mortgage and then some. Abundance of multi-family homes in Cleveland and surrounding suburbs. Fix and flips are still strong with healthy margins. Lots of gentrification happening, Cleveland Clinic growing and need for student housing. We’ve also seen an influx of transplants looking for a LCOL situation. All of this equates to lot of opportunity here for investors to provide housing for these folks while making good returns.

Hope that helps and if you need specific questions answered I’m happy to provide insight.
Cheers!
Brandy
0 Reply
Account Closed
Investor · Leander, TX · Member since 2016 · 299 posts · 402 votes
3y
Owned a SFH in the Cleveland market for 4 years (2016-2020) in Warrensville Heights, in Cleveland.
1952 Cap Code home 4 bed 2 bath 1,600 SQ. FT. detached garage
- High Turnover (4 years, 4 different tenants costing $9K to $15K per turnover)
- City permits
- Occupancy Tax
- Landlord Tax
- City inspections (Always finding something for me to fix, more money every single year)
- Lots of nickel and dimeing from the city
- Property taxes are pretty low.
Be sure you do your research on the area you invest in and the income families make in that area to help maybe reduce the turnover.
Yes, the cash flow looks good but beware the expenses I listed can offset that cash flow.
1 Reply
Brandy RollinsPro Member
Rental Property Investor · Cleveland, OH · Member since 2023 · 11 posts · 6 votes
3y
@Account Closed Very true. Warrensville isn’t awesome for rentals so all of that sounds about right for the area. Your advice is solid. I’d just add…work with someone who is honest with you and understands the nuances of the neighborhoods.

1 Reply
Ryan Rock
Sacramento · Member since 2019 · 54 posts · 24 votes
3y
Quote from @Brandy Rollins:

need for student housing.
Brandy
In what areas is student housing needed?
0 Reply
Brandy RollinsPro Member
Rental Property Investor · Cleveland, OH · Member since 2023 · 11 posts · 6 votes
3y
Quote from @Ryan Rock:

Quote from @Brandy Rollins:

need for student housing.
Brandy
In what areas is student housing needed?

Case Western, John Carroll, Kent, and anywhere near Clinic Clinic. Be careful with people advertising property as “close to Cleveland Clinic” because that pretty much means nothing. Everything in cleveland proper is “close to the clinic”.
Are you working with any Cleveland-based folks to advise you on the purchase or management of your property? If so, explain your vision and they should be able to source locations that fit your budget and plan.
I do think you’re trying to squeeze too much juice out of one property with that boarding house/air bnb idea. Maybe just stick to one or the other and you’ll have more success in CLE.

1 Reply
Ryan Rock
Sacramento · Member since 2019 · 54 posts · 24 votes
3y
OK now I'm more confused, especially considering your second sentence. Having the names of the institutions of higher learning is great, but what about specific neighborhoods or areas where students will rent?
For example, I've learned that in Lubbock, Texas Tech students prefer the quadrilateral bordered by highways 82 and 84, 34th street and Quaker Avenue.
0 Reply
Sachin Relia
Los Angeles · Member since 2022 · 6 posts · 2 votes
3y
I am looking into that market too.
0 Reply
Joshua Michael Hauman
Investor · Cleveland, OH · Member since 2020 · 72 posts · 173 votes
3y
Hey @Scott Miranda!

Always happy to hear when investors are interested in Cleveland as its my hometown and HQ for my operation.
I've seen a lot of success in this market and as a native I see first hand the growth of certain submarkets in the city. Right now there is a 15 year tax abatement and Opportunity Zone across multiple zip codes within Cleveland. This tax savings has encouraged capital to flood into new developments to bring up surrounding areas! In this market you're trading aggressive appreciation for higher cashflow in general.
I use this map which I find to be an accurate representation of the grades in the Cleveland market:
Neighborhood Grades

If you have more specific questions or looking for contacts in the market here for anything please don't hesitate to reach out!
0 Reply
Brandy RollinsPro Member
Rental Property Investor · Cleveland, OH · Member since 2023 · 11 posts · 6 votes
3y
Quote from @Ryan Rock:

OK now I'm more confused, especially considering your second sentence. Having the names of the institutions of higher learning is great, but what about specific neighborhoods or areas where students will rent?
For example, I've learned that in Lubbock, Texas Tech students prefer the quadrilateral bordered by highways 82 and 84, 34th street and Quaker Avenue.

Very late response but to clarify…

The actual answer would require too much text for a blog post response. The easiest way to learn the areas of interest in Cleveland would be to go on Zillow, pull up the location of those universities + the cleveland clinic main campus, then look at available listings. Also air bnb will direct you to the approximate areas if you use one of the universities as your destination.

That will give you an idea of what’s poppin. If you’d like more targeted advice we can chat via direct message if that’s an option on here.
0 Reply
Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Quote from @Scott Miranda:

Hello all, New to posting here but I am very interested in investing around the Cleveland, OH area and would love to hear some pros and cons of this market. My home state prices are high currently so I am looking at long distance options and have been looking into Cleveland based on home prices and decent rents.
Thank you

Pros, double digit net caps based on cash purchases Typically 15- 20% . I just picked up a 7 unit all in 200k, net rent about 38k, and will go higher. 4 br in Lee Harvard, all in 75k, rent will be about 1300, , 2 br, all in 55k rent 850, Con, not much, just need to know what you are doing or have a team around you that does.
All the best,
0 Reply
Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Quote from @Gino Barbaro:

@Scott Miranda
Do you think your state prices are high? You should look at other cities and make a comparison. If Cleveland is your back yard, then I would focus my efforts there, or at least another Ohio market, such as Cincinnati, Columbus.
Not a fan of the population decline, but the market does have higher cap rates, and you will be able to find cash flowing deals.
Gino

I have been hearing about this BS population decline for 10 years, I DONT buy it. Every time I visit there is a new restaurant hotel or massive new residential building, 2 lanes into 4, massive infrastructure. All I know for fact is , pricing has doubled tripled or much more over the last 10 years. MF used to be 5 - 10k per unit, now, 40- 65k . Also, East Cleveland, I called it 5 years ago, is going to be the next big well bigger pop. Its already increased substantially. Now for those that sit on the internet will say Im crazy, well that's what they told me about UC 8 years ago. Watch what happens to EC ( NOT ALL parts of it) over the next 5 years. For those in the know they are aware of what I am referring to, which is why we are buying everything we can. Just picked up a 7 unit, exactly in the right spot :)
Sitting on the internet is a terrible strategy.

All the best
0 Reply
Benjamin Riechmann
Member since 2022 · 11 posts · 7 votes
3y
I help people invest from outside Ohio. I have lived in many places outside Ohio. One thing to consider before investing in the market before jumping in, is are you investing as it looks like a good place to invest or are the investments so much cheaper than your current market where you live. I find that those that do the research and learn to understand the market they are investing in any other state, I help in other states as well, tend to do well. Those that try to rush in as things are so much cheaper can run into many issues. Bob above does very well and what he talks about teams is very important. If you are going to invest in other states, you want to help build a team to help you do that so you have a good foundation of people. Really anywhere you invest have a good team to advise you is important in investing, but if you are investing where you don't live it just becomes even more important.
Of the more veteran investors I know that seem to buy a lot of properties in the NEO area, and other parts of Ohio seem to have a algorithm they like. How much the rent brings in to how much people are making for jobs. It helps them focus in on what areas they are going to target. You want to know your budget and you want to get to know the areas. A really great area in Cleveland to invest can be not that far from an are you would not want to invest. As for building teams, I find finding really good property managers can be an issue here more than other cities I invest in. So doing due diligence is really important. There will all kinds of people offering you all kinds of "fantastic" deals in Cleveland. But there are many that you get what you pay for if you are not careful.
If you are not going to come out to the area yourself, you won't just want to go by what someone says is a good area and what is not. I would highly recommend having someone farm areas for you. Go take a look at the property in question and look down the street. While you can say well Ben I got a broker, I like someone outside of that that can go and talk to people in those neighborhoods and tell me about things that are happening that someone on commission may not tell you or not know. I have saved some investors from some really bad deals by paying a college kid that was outgoing to just go and talk to people in another state. Then researched how accurate the information was. Each time that kid was very happy with the bonus they got.
Long story short. Due diligence. Set up a team. Build good foundations of people. Buying something just because it is cheap is often worse then buying a stock just because it is cheap. It can lead to a lot of heartache. I like to try to help people avoid that.
2 Reply
Gino BarbaroPro Member
Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
3y
@Bob S.
every market has elevated the past 10 years. prices went from 10k to 45k. Not bad, but why too little? Because of supply and demand. Any healthy market has exploded the past ten years. Our market of Knoxville went fro 25k per door to 150k per door in the same time period.
Once again, if you live in the market and its your back yard, I would be buying. But if I live in California and looking to invest outside my back yard there are other markets.
Podcast Guest on Show The “Conveyor Belt” System That’ll Build You a BIG Rental Portfolio Quickly
0 Reply
Account Closed
Columbus, OH · Member since 2023 · 427 posts · 254 votes
3y
Hi Scott,
Cleveland has a great price:rent ratio. The prices are affordable even for MFs, and rents are strong. Cashflows are a huge pro of this market, and a con would be the population doesn't show much growth and appreciation is right along the national average.
0 Reply
Uri Gofman
Member since 2018 · 150 posts · 200 votes
3y
Quote from @Benjamin Riechmann:

I help people invest from outside Ohio. I have lived in many places outside Ohio. One thing to consider before investing in the market before jumping in, is are you investing as it looks like a good place to invest or are the investments so much cheaper than your current market where you live. I find that those that do the research and learn to understand the market they are investing in any other state, I help in other states as well, tend to do well. Those that try to rush in as things are so much cheaper can run into many issues. Bob above does very well and what he talks about teams is very important. If you are going to invest in other states, you want to help build a team to help you do that so you have a good foundation of people. Really anywhere you invest have a good team to advise you is important in investing, but if you are investing where you don't live it just becomes even more important.
Of the more veteran investors I know that seem to buy a lot of properties in the NEO area, and other parts of Ohio seem to have a algorithm they like. How much the rent brings in to how much people are making for jobs. It helps them focus in on what areas they are going to target. You want to know your budget and you want to get to know the areas. A really great area in Cleveland to invest can be not that far from an are you would not want to invest. As for building teams, I find finding really good property managers can be an issue here more than other cities I invest in. So doing due diligence is really important. There will all kinds of people offering you all kinds of "fantastic" deals in Cleveland. But there are many that you get what you pay for if you are not careful.
If you are not going to come out to the area yourself, you won't just want to go by what someone says is a good area and what is not. I would highly recommend having someone farm areas for you. Go take a look at the property in question and look down the street. While you can say well Ben I got a broker, I like someone outside of that that can go and talk to people in those neighborhoods and tell me about things that are happening that someone on commission may not tell you or not know. I have saved some investors from some really bad deals by paying a college kid that was outgoing to just go and talk to people in another state. Then researched how accurate the information was. Each time that kid was very happy with the bonus they got.
Long story short. Due diligence. Set up a team. Build good foundations of people. Buying something just because it is cheap is often worse then buying a stock just because it is cheap. It can lead to a lot of heartache. I like to try to help people avoid that.

very well said!
2 Reply
Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Quote from @Scott Miranda:

Hello all, New to posting here but I am very interested in investing around the Cleveland, OH area and would love to hear some pros and cons of this market. My home state prices are high currently so I am looking at long distance options and have been looking into Cleveland based on home prices and decent rents.
Thank you

No cons, just make sure you have a team in place. I have done 100s and 100s and 100s out there all while living OOS. Prices have doubled, tripled , quadrupled or more over the last 10 years, and still going strong. We used to get 2-5 30% net caps, now 15- 20% all based on cash purchases
Good luck
0 Reply
Vincent Donato
Member since 2021 · 15 posts · 21 votes
3y
Moving to Cleveland and realizing the affordable market here is what brought me into Real Estate. There are great projects for any type of investor. I will agree with others that cash flow is king though, appreciation is tough here.
Personally, I went the route of purchasing a duplex for long term renters in Lakewood, Ohio. Lakewood is a popular suburb right outside of downtown where a lot of people live to be close to the city but not in it. There is a surplus of renters here. Downside is, taxes are high but the town is very well taken care of.
On the east side of Cleveland, the areas surrounding Cleveland Clinic and Metro Health short and medium term rentals have become extremely popular. Many people live here short term as travel nurses or for treatment at the hospitals. Be careful, just because it is close to the hospital, could still be an awful neighborhood. Things change when you cross a street. Working with an experienced agent and property manager who specializes in those areas will be beneficial. The east side is extremely hit or miss.
That goes for rentals in the college areas as well.
I wish you luck, but proceed with caution!
1 Reply
Christopher Slowey
Real Estate Consultant · Cleveland, OH · Member since 2023 · 27 posts · 10 votes
3y
I'd love to talk more about the Cleveland Market with anyone who may have questions. There are many neighborhoods that I can help give guidance on since I'm born and raised here, I'd love to help out any investors interested in learning how to grow their portfolio's using the BRRR method. Cleveland is an E & W city but both sides present unique opportunities.
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