Cleveland Rental Market
Hello BP,
Can anyone give me some insight on the rental market in Cleveland. I have been seeing a lot of things come up in Cleveland area. Clearly the real estate market is still in the dumps there. However, is there a decent market for rental properties?
I have experience in remodels, flips, buy & hold however, I know very little about Cleveland. How is the homes to tenants ratio? I would like insight from people who are actively investing in Cleveland rentals or rehab properties.
Are there any places to stay out of? The bulk of my rentals are in very low income/poverty areas so I'm not afraid of that market but in some places it simply won't work. Any management company recommendations?
Thanks!
@Rob DeLaurentis at this point in the cycle I would challenge the appreciation question as well even in what is considered by many to be the worst inner suburbs; East Cleveland. It really depends on when you got in.
A few years ago, you could get a medium to larger multifamily (>10, < 100) for ~ $10K per unit (or even less!), do significant rehab of $7.5K - $10K and rent out for $450 - $550. All in <$20K per unit and hitting 2.5%-3% rents. It costs more to operate, has higher vacancy / turnover and you need a PM that can deal with the tenant class but certainly makes money once stabilized @ 80 - 85%.
Today, those properties are selling for ~30-35K per unit (even >$40K) and the rents are $575 - $675 (Still 1.5% - 2% rents). Classic forced appreciation of about 1.5x - 2x.
If the property is maintained, I think (for whatever that is worth) in the short - medium term there is still some room for rents to go up a some (10%?) and then you will not see a property trade at less then $40K and even $50K per unit.
