Vacancy rate in Cleveland

7 Replies

Hi All!

I have owned duplexes in the greater Cleveland area since 2014 (mainly in Old Brooklyn, Shaker and Garfield Heights) and I have really been hurt by the fact that the vacancy rate has been ~35% on average (I am including the months where tenants would live in the property without paying). My properties are well maintained and I wonder if the challenge that is due to the areas where my duplexes are located. Questions for the BP community:

1/ How are your duplexes performing from a vacancy rate standpoint?

2/ What are the cities that have the lowest vacancy rates in the greater Cleveland area? My next investment will probably be in Strongsville or Solon in order to have much more stable tenants.

Would love to get your thoughts on this one!

Thank you!

@Leonard Davis I've got singles in both Strongsville and North Royalton. My vacancies last only as long as I need to turn the place over and choose a quality tenant. Because there are so many applicants, it is easy to be very selective. But once the they are placed, they typically stay for years and require very little attention from me.
Originally posted by @Leonard Davis :

Hi All!

I have owned duplexes in the greater Cleveland area since 2014 (mainly in Old Brooklyn, Shaker and Garfield Heights) and I have really been hurt by the fact that the vacancy rate has been ~35% on average (I am including the months where tenants would live in the property without paying). My properties are well maintained and I wonder if the challenge that is due to the areas where my duplexes are located. Questions for the BP community:

1/ How are your duplexes performing from a vacancy rate standpoint?

2/ What are the cities that have the lowest vacancy rates in the greater Cleveland area? My next investment will probably be in Strongsville or Solon in order to have much more stable tenants.

Would love to get your thoughts on this one!

Thank you!

 Part of it may be the area mixed with the fact they are duplexes. They tend to have a larger vacancy rate as tenants treat them like apartments unlike Single Families where tenants treat them like homes. Shaker should be easy. With the single families, we see vacancy around 4%. Garfield should be closer 6%.

Leonard,

That's rough.  35% seems incredibly high.  Property management?

I have two duplexes in Cleveland.  One in Old Brooklyn and one on W133rd in the Jefferson area.   

The one I bought in Old Brooklyn last year had the bottom unit vacate in the second month and then the upper unit had an eviction the next month.  After what I would consider a very slow turnover of both apartments, I had a total of 5 months of vacancy (2 months for one, 3 for the other).    This was my worst performing year for any property and it ended up with a 20.83% vacancy for the year (5 vacant months out of a possible 24 billable months).   

My other duplex has had a total of 7 months of vacancy in 4 years & 8 months (112 billable months).   6.25% Vacancy. 

From what I have heard from the investors that I know, there will always be a few outlier years of bad luck and a few perfect years where nothing goes wrong.   The fact that you have such high vacancy spread over a few properties in different neighborhoods is puzzling.     Old Brooklyn and Shaker Heights are not war zones.  If you're offering market rent and keeping the places up, there is no reason why you shouldn't be below 10% vacancy.

Good Luck.

Thanks all. Really appreciate your feedback and insight. I agree that something is off. I will re-engage with my property manager to discuss how we can keep tenants around longer. Another option would be to look for a new PM... I will also try to diversify my portfolio with SFH in Shaker or South Euclid. Thanks again for your time.

Originally posted by @Leonard Davis :

Thanks all. Really appreciate your feedback and insight. I agree that something is off. I will re-engage with my property manager to discuss how we can keep tenants around longer. Another option would be to look for a new PM... I will also try to diversify my portfolio with SFH in Shaker or South Euclid. Thanks again for your time.

 I have a duplex in old bklyn. no issues renting within 2 weeks of being rent ready

Dont check on the PM, consider changing them. I dont invest in east side so not sure on time to rent.

Originally posted by @Leonard Davis :

Hi All!

I have owned duplexes in the greater Cleveland area since 2014 (mainly in Old Brooklyn, Shaker and Garfield Heights) and I have really been hurt by the fact that the vacancy rate has been ~35% on average (I am including the months where tenants would live in the property without paying). My properties are well maintained and I wonder if the challenge that is due to the areas where my duplexes are located. Questions for the BP community:

1/ How are your duplexes performing from a vacancy rate standpoint?

2/ What are the cities that have the lowest vacancy rates in the greater Cleveland area? My next investment will probably be in Strongsville or Solon in order to have much more stable tenants.

Would love to get your thoughts on this one!

Thank you!

 Typically speaking a duplex unit should rent within 30 days of its rent ready renovation. Garfield & Old Brooklyn are C-class areas. Parts of Shaker are similar with other parts of Shaker being high end A-class areas. Fairly obvious to tell which part of Shaker it is based on purchase price and type of housing stock. The larger community of Doctors & Lawyers living in Shaker aren't living in duplexes. They are living in large estates. 

Vacancy issues will drop as you enter higher end neighborhoods. Solon is an A-class neighborhood so going out that way will greatly reduce your issues. For more info on Cleveland neighborhoods and the grading scale I am referencing check out The Ultimate Guide to Grading Cleveland Neighborhoods.