Auston is Hot, Dayton is Not is that an opportunity?

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Auston is Hot, Dayton is Not is that an opportunity?

Michael Lauther
Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes

I have always been a contrarian (not a speller)but the danger is to take a position too early.

While my Texas friends are raking in the money in their market they are taking that market out of my reach

Just as investors here in the Hampton's have bid up the properties to a point where investing for income is not viable investors in Texan are seeking rapid appreciation I am seeking income now. Would not mind some appreciation.

Currently I am buying properties in Dayton OH , a specific example is example is a 3 bedroom one bath with central air ;408 Sheridan ave Dayton oh 45403. I am all in for under 20k and getting 588 sec 8 rental from a tenant who loves the property.

How would my Texas friends evaluate this market that has been shrinking in population that has had above average unemployment and crime has Lost its manufacturing base.

I am betting it has hit bottom and will slowly appreciate over the next 5 to 10 years as the city finds its way.

How would you compare it to the latest Hot market in Auston. Do you see opportunity here or would investment in Auston give me more bang for my buck?

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Brian LevredgePro Member
Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
14y

I would look more at the long term trends to see what kind of a picture it paints about Dayton. What is the long term job outlook? What direction are taxes heading? Etc., etc. I invest for both cash flow and appreciation and without long term job growth to push up demand for housing then you are only investing for cash flow. Furthermore, you are relying on the govt to pay your rent. I'm not knocking that as I have some Section 8's myself, but what if housing in the future gets cut? Then you are looking at further reduced returns.

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  • Michael Lauther
    OP
    Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
    14y

    Jeff finding good tenants is the primary challenge. Lots of self employed contractors and people on SS disability etc. I welcome sec 8 and have priced my units slighly above the market. I want tenants who enjoy their home and will care for the property. Each time I looked to fill a vacancy I have been able to do it within a month. Had one tenant who could not keep up with rent and lost 4 months but they found me the new tenant and I did not have to evict. The new tenant is on SS Disabilty and loves the property. So far He has paid on time each month.

    1Reply
  • Joe Delia
    Involved In Real Estate · Rochester Hills, MI · Member since 2010 · 812 posts · 178 votes
    14y
    Originally posted by Michael Lauther:
    Joe : Glad to see you liked my post. I have to get to
    Dayton soon. Maybe we can meet when I'm there.

    I'd love that. Let me know.

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  • Joe Delia
    Involved In Real Estate · Rochester Hills, MI · Member since 2010 · 812 posts · 178 votes
    14y
    Originally posted by Jeff Thompson:
    I don't know nearly enough about Ohio... How hard is it filling units? You finding you need to go under market to keep filled or do lenient checks?

    I tend to offer below market rents to get our units filled asap. I howerver do not offer any utilities paid so they have pay for heat with me where they may not have to in another location. I hate variable costs and paying for utlilties is a variable I don't care to have.

    I never waiver from our screening policies. No tenant is better than a bad tenant.

    As far as filling tenants it depends on the area.

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  • Michael Lauther
    OP
    Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
    14y

    Joe is absolutely right about no tenant being better than a bad tenant. When investing in a low income area the scrutiny of tenants is critical. People who are going through difficlult financial times often become very creative when dealing with evictions and when it comes down to it they will survive as long as they can by not paying rent. Dealing with tenants in C areas or below is hands on not passive. This is the reason the rental income in relation to property values return a Higher return.

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  • Brooke Isbell
    Brentwood, TN · Member since 2013 · 14 posts · 2 votes
    13y

    Hi Michael,

    I know this is an old thread, but the title caught my eye. I too am from the Dayton area (recently moved from LA to Nashville) and I have a rental in Dayton. I agree with your thinking that ultimately, the city will have to reinvent itself because right now it's a bit of a ghost town.

    In the meantime, I wonder about little up-and-coming hot spots within Dayton that could be a bit more lucrative in my opinion. For example, the Riverfront park development in downtown Miamisburg. I have heard that it is part of a downtown redevelopment project to boost economic development of the downtown area. I don't have to tell you how quaint downtown Miamisburg is, although a bit run-down. To have a riverfront park with shops and eateries (if that is what they are actually developing there as I heard) would have to make those older houses more desirable. If they are spruced up, it would be a beautiful area. Those types of little metro centers tend to draw the higher end clientele who want the semi-urban feel. As I drive through there when I am visiting, it seems there is no short supply of run-down houses in that immediate area. Also, the Miamisburg schools have an excellent reputation. As a disclaimer, I have not actually seen the Riverfront Park and do not know how extensively they plan to develop the downtown or if that is already finished. Still, if it is what it sounded like it would be, I would be tempted to bet on it if I had the money to invest. There is also lots of buzz right now about Austin Landing which I am not familiar with. Based on the buzz though, I would look into the areas surrounding it.

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  • Michael Lauther
    OP
    Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
    13y

    Brooke Isbell The city's downtown area is still too empty but is making progress . I concentrate on the bread and butter rentals in the one area just minutes from downtown. predominantly in the 45403 zip. I believe the city is improving month by month and have seen some escalation of prices. The improvement is still spotty with far too many vacant homes in disrepair surrounding the city center. I tend to communicate updates on Day ton's business on my face book page which serves as one place I can communicate with several investor friends on a regular basis, often on topics other than real estate.

    I find Dayton a bit boring on my regular trips with not much going on Downtown. It has been 6 months since my last visit so I will see how we have progressed. I believe there is tremendous potential for appreciation as the economy continues to improve. Dayton has been named among the lowest cost of living and the best places to work in the country.
    wear is your rental in Dayton? Do you use a property manager?
    I am always looking for referrals to good people. It is a challenge to manage property in Dayton from NY.
    Good hearing from you.

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  • Brooke Isbell
    Brentwood, TN · Member since 2013 · 14 posts · 2 votes
    13y

    Hi Michael,

    Sorry for the delayed response. I was side-tracked with sick kids and had a lot going on.

    My rental is a duplex in the town where I grew up (Germantown). It's about 20 miles outside of Dayton...a cute little historic town, very Norman Rockwell-ish. My Grandmother's house was in East Dayton (back in its hey-day). She grew up in the "Shiloh" area of North Dayton (I think now they call it Riverside). I attended Sinclair in downtown Dayton before moving to CA so I'm somewhat familiar with the Dayton neighborhoods. I am not at all surprised you find Dayton a bit boring. It absolutely is. It has it's good points, like one of the best regional theaters in the country (The Human Race at the Loft/Victoria Theater). However, if I weren't from there. I would have no reason to ever go there. I do agree that property will be hot there again. I think when many of these towns like Dayton (former GM towns such as in PA and MI) reinvent themselves, they will see a boom.

    I do not use a property manager at the present time. My mom still lives in the same town and she keeps an eye on things for me. She is also a real estate buff and has a rental property of her own. I am in the process of building an arsenal of good tradesmen who are honest and reliable, to use for repairs and rehabs. I have a couple already and also use a couple contacts through my Mom. She retired from GM, and many GM retirees (the maintenance guys) have businesses now and can do just about anything you need (if they can't do it, they will tell you who you need). I'll be happy to share any contacts with you.

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  • Michael Lauther
    OP
    Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
    13y

    Good to hear from you Brook. yes I would really appreciate any recommendation, good reliable trades people are hard to come by. I am familiar with German-town and had bid on a few properties there. Right now the properties within the city limits are providing a better rental income for the dollar invested, but it comes ay the price of much more aggravation. At some point I will need to find a good property manager. My investments are all in the 45403 zip primarily because I am so far away and can only monitor a narrow area . I have 4 properties on one block. 408, 503, 507 and 511 Sheridan ave. and 734 E circle drive all in the 45403 zip. Let me know if you are planning to visit Dayton and we may be able to meet for coffee. I would be happy to meet you and your mom. Thanks for the heads up on the Victoria Theater. I tend to spend a week at a time when I visit and iI need to find more to do in my down time. I am looking forward to my next visit to see the new restaurants that have opened downtown. Is Your mom on Bigger pockets?

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  • Amie D.
    SFR Investor · South Bend, IN · Member since 2013 · 342 posts · 56 votes
    13y

    Again resurrecting an old thread but I have another vote in for Ohio (Cincinnati), now that I have moved to Seattle. Prices here in Seattle are higher, inventory is lower, with most things going to multiple bidders the day they are listed. Cincy inventory is getting less, too but not as bad here and the rental market is strong. I think I may start looking there instead for rental properties.

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  • Jeff S.
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    13y

    Amie D. have you considered Montesano, WA where Brandon Turner lives? There are supposed to be good deals there and just a few miles.

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  • Amie D.
    SFR Investor · South Bend, IN · Member since 2013 · 342 posts · 56 votes
    13y

    Jeff S., I haven't, but I will take a look. I saw there were some moderately priced properties in Hoquiam, which isn't far from that area.

    I guess the other advantage with Cincy is I lived there for about five years, as I was a photojournalist there - so know the neighborhoods well due to covering them daily. I am not as familiar with the areas around here, I suppose that will come with time. It just seems that people are in bidding wars over properties that cost twice as much here, with a higher initial investment and a lower cash flow. Of course long distance I'd have the costs of property management but would probably use that here as well if I could not buy extremely locally to where I lived.

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  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    13y

    Hey Amie D. - Most of my single family houses are in Hoquiam. My apartments are in Aberdeen, and I live (and flip now) in Montesano. Hoquiam is definitely inexpensive, as is much of Aberdeen. It's an interesting area to be sure, with a lot of low income (so don't expect much appreciation) but the cashflow can be good. Hit me up anytime and I'll tell you all about the area, where to stay away from, etc.

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