Cleveland or Columbus?

Question

Hi all!

My goal is to invest in 2-3 multi-family properties (duplex, 3, or quad) in the next 3-6 months with the goal of achieving good cash flow and starting a portfolio. I'd like properties with low upfront reno required in B/C class neighborhoods. I've been spending a lot of time researching investment opportunities in Cleveland and learning from all of you. About ready to pull the trigger, and then....

A friend told me to look at Columbus. At first blush, I'm intrigued by the "indicators" such as population growth, gentrification, and overall investment in the area in Columbus which seems like in addition to cashflow, could drive up appreciation.

Would love to hear your thoughts on where to invest my time and $$ between these two. Anybody considered both and leaned one way or another?

thanks!

Nicole

Federico Gutierrez · Answer

@nicole s

Just take some capital and invest in a flight ticket. Go to both Colunbua and Cleveland but pull the trigger on one of the cities. I've been following you and sure you've done your search but it's going to get to the point where you need to take action and stop your analysis/learning stage and get your hands dirty

Cindy Scott · Answer

I'm originally from the Cleveland area and currently live in the Columbus area. We are considering relocating to Cleveland, so I've been looking at both areas. I don't have any investment properties yet - I'm still in the learning stage.

Columbus real estate is definitely on fire. In my suburb (Hilliard), houses sell in hours with multiple offers over list price. It's definitely a seller's market. There's no question that Columbus has higher population growth and is better on most of the macroeconomics than Cleveland.

BUT, I'm personally looking to relocate to Cleveland to be near my family, but also because it feels a little less crowded, more established, and there's some great stuff happening. Cleveland is definitely up-and-coming. It's also CHEAPER than Columbus for real estate. Personally, I'm looking at the nicer suburbs on the west side, and Hilliard is more expensive per square foot than all of them. For my personal home, I'm looking at Westlake and I'm blown away by the cheap prices compared to the suburbs of Columbus.

Anyway, I think either would be good for investment. As others said, you really need to work with someone local to make sure that you're choosing the right property in the right location. A few miles or a different school district can make such a difference.

James Wise · Answer

Cleveland is going to have a higher rental yield & a much lower entry cost. Columbus is going to see a much larger population increase & in theory you will benefit from more long term appreciation.

Which one of those you find more important is up to you. Some investors value the cash flow as others value the appreciation potential.

Helen Zhang · Answer

@Nicole S. I am on the same boat as you are as I have just started on doint research on nearby cities such as detroit, cleveland, chicago and Columbus. My choices are leaning toward cleveland and chicago. All my properties are appreciating asset and rentals, I am seeking for more of rental income ratio at the moment. Columbus might end up like my other properties. Don't get me wrong, they are still great rentals with good margins but the margins is just not as great as pure rental gold mine.

I am looking forward to take a Chicago/Cleveland trip sometimes next year Jan/Feb. If you are also interested, maybe we can team up and go for a road trip together =)

Sarah Wheeler · Answer

Hi @Nicole S.

We would always recommend taking some time to visit the places you are considering. While you're here, meet with some of your potential team members, since you will be operating out of state.

We are always more than happy to meet with potential investors to explain the areas and answer any questions.

Please let me know if we can help in your investment journey!

Good luck!

Tom Ott · Answer

I am not too sure how much is going on in Columbus. Mainly because I do not know much about the industry there. Cleveland is home to the largest employer in the state of Ohio (the Cleveland Clinic) which is also the second top-rated hospital system in the United States just after the Mayo Clinic. We also have 6 colleges in the area one of which is Case Western Reserve University, which is huge in medical research. We have been seeing a boom in the bio-medical tech industry as well. The renaissance around here has just been nonstop.

Good luck!

John Horner · Answer

I would agree on lower entry but not necessarily on higher cash flow.  Higher population and growth mean higher demand for rentals which drives rental rates up.

Robert Ellis · Answer

Hi Nicole, Columbus I like for the macroeconomics of being a State Capital, Ohio State University pumping out 6k graduates a year that stay, nearly double digit population growth, and many other reasons. You can buy apartments anywhere and make money. I'd suggest contacting a team locally both, looking at both, and making decisions and even investing in both. And after one year or 6 months make a decision. Get to know the markets, etc.

Cleveland or Columbus?

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