Ohio investors: recommend a market for low-cost house landlording

10 Replies

Hi, I'm looking to become a landlord for section 8 D properties in the $10,000-$20,000 range. Single-family residences only (2/1, 3/1, 3/2. With section 8, multi-units can cause accountability problems). 

Appreciation is nice but not the main focus. My real concern is crime, and I know when shopping in this price range,  neighborhood and even street-level selection is paramount.

I should also mention I do not plan on remote investment – I'll be relocating. I'm fortunate not to have family related concerns and can live anywhere.

To the Ohio investors, can you recommend, or warn against, the major Ohio markets? Here is my current ranking based on MLS deal volume:

1. Akron
2. Toledo
3. Dayton
4. Cleveland

*Cleveland actually has more listings than Toledo and Dayton, but those other two have a better "deal per capita" ratio.

I'm interested in any local advice you have for me, thank you for your insights!

@James Wise  might be the right person to chime in on cleveland. best of luck on your search. 

@Gary Clisele  .  Are you familiar with CPTED? That is Crime Prevention Through Environmental Design. Google it and you will find a wealth of information. You as a landlord can make a difference in a community and help reduce crime.

Also, listen to BP podcast #8 where @Al Williamson  shares insight as an inner city landlord.

For your Section 8 interest... locate the local housing authority for the areas you are considering and explore how easy it is to work with them. Some housing authorities are easier to partner with than others.

For networking, complete your BP profile and you will find it easier to network here (add a photo too)... also set up a key alert for Ohio. 

See if @Engelo Rumora  may have some tips for you; he's doing amazing things in Ohio with his business Ohio Cashflow.

Good luck!

Hello Gary,  

I've been investing in Toledo for 7 years now and deal strictly in the $10k-$30k price range .   The 43608 and 43609 zip codes offer those types of deals every day all day.  Crime is much higher in those areas and you can expect vandalism especially when a vacancy arises.  Alarm systems help but often do not deter people from breaking in.   I've found the 43612 and 43605 zip codes to be much better as far as tenants and quality of properties .  Either way, appreciation will be near zero.  But if cash flow is your goal, as it is mine, then those areas will work for you.   Feel free to PM me if you want specifics on particular deals or any other questions you may have.   @Ryan Pyle is a great source for info on Toled .  He has made a living for over a decade as an investor here in Toledo 

Originally posted by @Marcia Maynard :

@Gary Clisele  .  Are you familiar with CPTED? That is Crime Prevention Through Environmental Design. Google it and you will find a wealth of information. You as a landlord can make a difference in a community and help reduce crime.

Also, listen to BP podcast #8 where @Al Williamson  shares insight as an inner city landlord.

For your Section 8 interest... locate the local housing authority for the areas you are considering and explore how easy it is to work with them. Some housing authorities are easier to partner with than others.

For networking, complete your BP profile and you will find it easier to network here (add a photo too)... also set up a key alert for Ohio. 

See if @Engelo Rumora may have some tips for you; he's doing amazing things in Ohio with his business Ohio Cashflow.

Good luck!

Hi Marcia,

Your kind words are much appreciated.

We are always happy to help. I have guys within my group that know Toledo better than I ever will hehe

Thanks and have a great day.

Hi Gary, I've done very well with Section 8 in Toledo in both single family and multi-family. I would highly recommend reading the Section 8 Bible if you haven't already. I don't use all of their methods, but their tactics are very useful in terms of how to tenant-proof a house for low-income and Section 8. 

The Lucas Metropolitan Housing Authority (www.lucasmha.org) is our local housing authority. They are great to work with as long as you aren't a slumlord. They can get picky with inspections, especially when you are new and they are still sizing you up, but once they know you are a good landlord they are very reasonable. The key is to show up (or have your maintenance man show up) for every inspection and show that it is important to you and that you find their repair recommendations very insightful and helpful. :)   

Question: what do you mean by "multi-units can cause accountability problems"? 

Thanks Ryan! To answer your question about the accountability issues, here's what volume 2 of the Section 8 Bible says:

Let's go over the pros and cons of multi,family units. Cons first. 

#1. There is no accountability. You can't hold one specific person or unit responsible for anything. If the main drain gets clogged, you had three families flushing their toilets into it so you can't pin the clog on any of them. No one will own up to it and all you'll get is finger pointing and blaming which will lead to fisticuffs and arrests.

#2. Problems to the third power! If one thing goes wrong, you've got three people calling you. Worse yet, you've got three people calling Section 8. When you come over to check out a problem, you've got three tenants flocking to you to tell you about ten other problems that they are having. Eye,yie,yie, you'll never get back home.

#3. Loss of rent! If Section 8 has to stop your pay for any type of utility or backup problem, you're now losing rent on three units at a time.

#4. Fires! God forbid there is a fire. You might lose three of your investments in one day! I could go on with the cons all day, but I'm sure by now you get the point.

Now, let me give the pros.

#1. Tax! You're only paying taxes on one unit instead of three (triplex) or four (quad).

#2. Insurance. You're only paying to insure one unit instead of three or four. You don't have to insure each unit separately, just the building. 

My answer to both of these pros is "big deal". The cons heavily out weigh the pros.

Youngstown has a huge supply of homes both in city limits and even in our burbs. In the city, you could get SFH for under 20k and duplexes super cheap too. The problem here is over supply of housing and very little demand to live in those places. People with sec 8 (especially working people) will look throughout mahoning county or Trumbull county for landlords that take sec 8 as they are much better areas and near retail and jobs. If you ever consider the Youngstown area, feel free to reach out to me for some advice on the area.

Otherwise, out of the markets you mentioned I would go with Cleveland as it is still a rust belt city on the rebound especially in the healthcare industry and some others. Akron is so close to Cleveland and big NE Ohio colleges so any turn around Cleveland has- Akron will feed off it too! 

I have been hearing a lot about Cincinnati's renaissance of sorts, so I might suggest checking that out and Dayton is only about an hour from Cinci.

Any market you buy a 10k house your going to have problems. There are no rent ready houses in any market i'm aware of  for 10k. Maybe East Cleveland but I see no way that they are going to pass a section 8 inspection.

I think the cheapest i've ever gotten a rental operational was 22 or 23k. I run into issues absolutely, but they do  make money.

@Gary Clisele  

Hello, I am from the Dayton area, if you are still interested in the Dayton area, please private message me! I come across properties that fit your criteria, and if we could speak that way i can get a little more info. I want to make sure I can better serve what you are looking for!  Please feel free to read my profile as well, I work with 2 other investors, one that is a investor/Realtor and one who is a investor/Rehab expert.  

I believe you are from California, I'm originally from San Diego, my father was in the Navy!

Thanks, hope to hear from you soon!!!

Sondra

Part of the "low-cost house landlording" equation involves INSURANCE. My friend has a basic small 2 bedroom SFR in Youngstown, and last year his insurance bill was ~$800. Now, it just went up to $900. (No claims). That's two months rent! Any suggestions for a lower premium? Thanks...

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