Anyone investing In Cleveland, OH?
New to Real Estate · Santa Barbara, CA · Member since 2020 · 51 posts · 12 votes
I’m new to real estate and been looking for my first out of state investment property. I been doing some research in what states are better for cash flow properties and it lead me to Cleveland, OH. Maybe I’m wrong and would be helpful if anyone could point me to the right direction. I would really appreciate it. If you’re investing in this area shah neighborhoods do you recommend?
@James Maradits Cleveland is a popular cash flow market due to its affordable prices. In evaluating any market however, you should be considering not just short term cash flow but also long term asset value. Markets with strong economic and demographic fundamentals such as population growth and job growth will perform better over the long term than those with weak fundamentals. Although Cleveland does cash flow it is the 5th fastest shrinking large city in the U.S. and has been shrinking since 1950. That's something you need to consider in your evaluation. There are a lot of cash flow markets in the Midwest. What led you to Cleveland?
I'm not sure if your post was meant to be directed at me or the original poster.
I invest in Cleveland because I'm from Cleveland and the numbers make sense. Obviously I am somewhat biased because of this, but I've had a lot of success in the area.
Our residential real estate market is suffering from an inventory shortage as is much of the country. Rents and home values have gone up significantly over the last few years, so it's not like there is no appreciation on the table when buying here.
I don't think that looking at a singular data point, likely one that came from a google search or "buzz feed" type article, about the population is an end all be all way to evaluate a market.
It's no surprise that Cleveland and other Midwest Cities that boomed in the industrial age (STL, Pittsburgh, Detroit) were over built and have made big course corrections as these industries have largely left the region and moved overseas. These cities will never be the New Yorks or Londons of the world, but people are still going to live there and I think we're closer to approaching an equilibrium of population in the market rather than a complete exodus and the city falling off the face of the earth.
The population of the MSA has been a lot steadier than the City of Cleveland itself and is still in the top 30 highest population markets in the country. I suspect a lot of the population shift is people moving from the old/functionally obsolete housing stock in Cleveland proper (the older neighborhoods that popped up during the industrial age) into newer built homes 10 minutes down the road in the suburbs because the land simply isn't available within the city limits.
We have some major economic drivers in the academic and medical fields. The Metro health system is underway on a near billion dollar expansion project, which is just one of many development/redevelopment/infrastructure projects going on in the area. I would have to believe the powers who signed off on projects of this magnitude had a little bit more time and research invested into the market than you or I do before making this type of decision.
With all of that being said, who knows... I could be completely wrong, but I'm going to keep buying. I'll dog ear this thread and check back in a few years to eat my words if needed. Who knows, with as bullish as the Columbus crew on BP is, we might just be annexed as "Columbus on the Lake" sooner than later.
@James Maradits Cleveland is a popular cash flow market due to its affordable prices. In evaluating any market however, you should be considering not just short term cash flow but also long term asset value. Markets with strong economic and demographic fundamentals such as population growth and job growth will perform better over the long term than those with weak fundamentals. Although Cleveland does cash flow it is the 5th fastest shrinking large city in the U.S. and has been shrinking since 1950. That's something you need to consider in your evaluation. There are a lot of cash flow markets in the Midwest. What led you to Cleveland?
I'm not sure if your post was meant to be directed at me or the original poster.
I invest in Cleveland because I'm from Cleveland and the numbers make sense. Obviously I am somewhat biased because of this, but I've had a lot of success in the area.
Our residential real estate market is suffering from an inventory shortage as is much of the country. Rents and home values have gone up significantly over the last few years, so it's not like there is no appreciation on the table when buying here.
I don't think that looking at a singular data point, likely one that came from a google search or "buzz feed" type article, about the population is an end all be all way to evaluate a market.
It's no surprise that Cleveland and other Midwest Cities that boomed in the industrial age (STL, Pittsburgh, Detroit) were over built and have made big course corrections as these industries have largely left the region and moved overseas. These cities will never be the New Yorks or Londons of the world, but people are still going to live there and I think we're closer to approaching an equilibrium of population in the market rather than a complete exodus and the city falling off the face of the earth.
The population of the MSA has been a lot steadier than the City of Cleveland itself and is still in the top 30 highest population markets in the country. I suspect a lot of the population shift is people moving from the old/functionally obsolete housing stock in Cleveland proper (the older neighborhoods that popped up during the industrial age) into newer built homes 10 minutes down the road in the suburbs because the land simply isn't available within the city limits.
We have some major economic drivers in the academic and medical fields. The Metro health system is underway on a near billion dollar expansion project, which is just one of many development/redevelopment/infrastructure projects going on in the area. I would have to believe the powers who signed off on projects of this magnitude had a little bit more time and research invested into the market than you or I do before making this type of decision.
With all of that being said, who knows... I could be completely wrong, but I'm going to keep buying. I'll dog ear this thread and check back in a few years to eat my words if needed. Who knows, with as bullish as the Columbus crew on BP is, we might just be annexed as "Columbus on the Lake" sooner than later.
@James Maradits Sorry, you're right. My response was meant for the OP. I'm not casting aspersions on Cleveland and I know that it can cash flow well, however, I am always concerned with markets that have stagnant or declining populations. I get that if you live there, it makes sense to invest there and I would never suggest that someone that does live there go and invest out of state somewhere, but I believe there are other alternatives for people that don't live there and can basically choose any market if they are going to invest out of state. I would never suggest that anyone make a decision based on a "singular data point". The key factors that I look at are population growth, job growth, labor participation rate, median household income, poverty rated and GDP per capita. As part of my business, I closely track about a dozen markets every quarter across several economic and demographic factors using reliable data that doesn't come from a Google Search or buzzfeed type of article. I use data from the U.S. Census Bureau and Bureau of Labor Statistics for a lot of data.
@James Maradits Sorry, you're right. My response was meant for the OP. I'm not casting aspersions on Cleveland and I know that it can cash flow well, however, I am always concerned with markets that have stagnant or declining populations. I get that if you live there, it makes sense to invest there and I would never suggest that someone that does live there go and invest out of state somewhere, but I believe there are other alternatives for people that don't live there and can basically choose any market if they are going to invest out of state. I would never suggest that anyone make a decision based on a "singular data point". The key factors that I look at are population growth, job growth, labor participation rate, median household income, poverty rated and GDP per capita. As part of my business, I closely track about a dozen markets every quarter across several economic and demographic factors using reliable data that doesn't come from a Google Search or buzzfeed type of article. I use data from the U.S. Census Bureau and Bureau of Labor Statistics for a lot of data.
I appreciate the response and your feedback. I apologize if it sounded like I was taking a cheap shot at your research or market knowledge, that was by no means my intention. Admittedly I'm a bit jaded from seeing a lot of false or arbitrary data (IE using "headaches" as a metric) about the Cleveland market and wanted to throw my two cents into the conversation.
@James Maradits Sorry, you're right. My response was meant for the OP. I'm not casting aspersions on Cleveland and I know that it can cash flow well, however, I am always concerned with markets that have stagnant or declining populations. I get that if you live there, it makes sense to invest there and I would never suggest that someone that does live there go and invest out of state somewhere, but I believe there are other alternatives for people that don't live there and can basically choose any market if they are going to invest out of state. I would never suggest that anyone make a decision based on a "singular data point". The key factors that I look at are population growth, job growth, labor participation rate, median household income, poverty rated and GDP per capita. As part of my business, I closely track about a dozen markets every quarter across several economic and demographic factors using reliable data that doesn't come from a Google Search or buzzfeed type of article. I use data from the U.S. Census Bureau and Bureau of Labor Statistics for a lot of data.
Mike, I'm with you 100% at looking at data to drive the quantitative aspect of one's analysis for any given market. Interesting that you mentioned per capita GDP, and still land at the conclusion that Cleveland isn't a particularly strong market though.
Based on the data in the article linked below, it seems that the Cleveland metro has a pretty solid per capita GDP (I was surprised myself at just how solid it is). Higher than Charlotte, Las Vegas, Orlando, San Antonio, Phoenix, and even Cleveland's young competitive sister, Columbus. Probably largely because quite a bit of the economic activity in the Cleveland area is situated outside of the city proper, in the dozens of suburbs around it, it belies the stereotype that Cleveland is a dying old city without much of financial engine left in it. Granted, the article is from 2020, and I have not dug into the raw data personally, I do trust that academic research using data from the US Bureau of Economic Analysis, assembled by an author associated with a very established newspaper (The Plain Dealer) is probably pretty sound.
I love lake county ohio!!! I have about 165 front doors in Painesville and Mentor!! Great area bad extremely landlord friendly!!
Swanny
@Elias Munoz
I'm in Phoenix and invest out of state. While Cleveland is a hot investment market, there are other markets with similar opportunity that have lower property taxes. I decided to stay out of Cleveland for this reason, cash flow suffers.
@Michael Swan @Michael Swan wow just read your bio. You’re killing it in real estate! Those are some goals to look up to. I’ll start doing some research in those areas.
@Rick Jarrell thanks for reaching out. What made you invest in Cleveland? Do you recommend any agents and lenders. Are you hiring a GC to rehab your property
@Matthew Terry I'm curious where you decided to invest. As much as I do like Ohio and specifically Cleveland, I am also concerned about the property tax effect. To me, that's the single biggest detractor of this market.
I’m new to real estate and been looking for my first out of state investment property. I been doing some research in what states are better for cash flow properties and it lead me to Cleveland, OH. Maybe I’m wrong and would be helpful if anyone could point me to the right direction. I would really appreciate it. If you’re investing in this area shah neighborhoods do you recommend?
Most midwest cities are good for cash flow. Cleveland can one good. I personally invest and live in Columbus which has a solid rental market and great appreciation. Some of my deals hit the 2.5% rule (granted that was 2 years ago).
@Elias Munoz I'd look in Tremont, Ohio City, Detroit-Shoreway, and Clark-Fulton. These are all up-and-coming neighborhoods in the Cleveland market.
@Bonnie Low
I invest in the Phoenix area and Oklahoma City. OKC is traditional buy\rehab\rent where Phoenix I rehab my primary residence, live in for a few years, and then turn it into a rental. Two places with very low property taxes. However, we will see how the surge in Phoenix-area home prices will affect property taxes next year.
I’m new to real estate and been looking for my first out of state investment property. I been doing some research in what states are better for cash flow properties and it lead me to Cleveland, OH. Maybe I’m wrong and would be helpful if anyone could point me to the right direction. I would really appreciate it. If you’re investing in this area shah neighborhoods do you recommend?
Most midwest cities are good for cash flow. Cleveland can one good. I personally invest and live in Columbus which has a solid rental market and great appreciation. Some of my deals hit the 2.5% rule (granted that was 2 years ago).
Good Gordy, Steven . . . . 2.5% “rule” . . . that’s awesome!
I’m new to real estate and been looking for my first out of state investment property. I been doing some research in what states are better for cash flow properties and it lead me to Cleveland, OH. Maybe I’m wrong and would be helpful if anyone could point me to the right direction. I would really appreciate it. If you’re investing in this area shah neighborhoods do you recommend?
Most midwest cities are good for cash flow. Cleveland can one good. I personally invest and live in Columbus which has a solid rental market and great appreciation. Some of my deals hit the 2.5% rule (granted that was 2 years ago).
Good Gordy, Steven . . . . 2.5% “rule” . . . that’s awesome!
Gotta aim big to win big! Columbus has it all!
I’m new to real estate and been looking for my first out of state investment property. I been doing some research in what states are better for cash flow properties and it lead me to Cleveland, OH. Maybe I’m wrong and would be helpful if anyone could point me to the right direction. I would really appreciate it. If you’re investing in this area shah neighborhoods do you recommend?
Santa Barbra is a great city. I went to Cal Poly SLO! Have you already pulled the trigger on your first investment property yet?