Apartment in Dayton and Cincinnati

[Shital Thakkar]

Hi,

I am investor from Dallas. I see asking price in Dayton and Cincinnati market is very low compare to lot of other areas. what is the reason of low value..? Low rent or high crime?

[Coleman Nelson]

When talking about crime and good/bad locations, it all depends on the neighborhood, and sometimes the location within that individual neighborhood. I would say overall, looking at the Cincinnati and Dayton markets as a whole, the prices are not different from other cities because of crime. I can't imagine Cincinnati has significantly more crime than Dallas, for instance. Compared to Chicago's crime, most other midwest cities don't come close. But still, Chicago's real estate prices as a whole are still significantly higher than these other cities. So it really depends on the neighborhood you're looking in as to whether crime affects rent prices.

The main driver for the real estate market is the economy. Cities like Dallas and other Texas cities have seen huge job growth, which leads to population growth, which leads to increased real estate demand and increased prices. Cincinnati, and most other midwest cities, seems to have a stable economy, but are not growing at the same pace as other cities. Because of all of this, salaries and cost of living (rent/home prices) tend to be a little lower. Cap rates tend to be a little higher here than in some of the booming cities because of these reasons, which makes the property value lower with the same amount of cash flow.