Looking to invest in Ohio and would like to get market feedback

17 Replies

Hi, I am looking at investing in Ohio, single family home rentals.  In particular, the area of Lima and its surrounding area.  One scenario floated across to me are homes in the 25-30K range with rentals around 300-400.  Is this a norm there?  Also, can anyone share about the 

  1. is Ohio a good place to invest
  2. economy
  3. major industries
  4. demograhpics
  5. tenancy act if landlord or tenant biased
  6. quality of renters that are paying in this range
  7. difficulties in holding a large number of these (100+ homes)

Thanks very much!

@Henry Der ...I know Lima, but don't work that market...if you want market data on one of the fastest growing cities in the country, check out Columbus: https://columbusregion.com/columbus-2020/ 

My advice would be to stay away from paper returns...you can get 30% ROI in dozens of cities in Ohio, but that doesn't mean the investment is sound. We're seeing investors settle for 6% on larger MF's...and we can produce 8-10% cash on cash in the small MF market...very stable environment here. (we don't work the SFR market at all).

Ben did well in Lima when he was here...maybe reach out to him: https://justaskbenwhy.com/

Best of luck

Originally posted by @Henry Der :

Hi, I am looking at investing in Ohio, single family home rentals.  In particular, the area of Lima and its surrounding area.  One scenario floated across to me are homes in the 25-30K range with rentals around 300-400.  Is this a norm there?  Also, can anyone share about the 

  1. is Ohio a good place to invest
  2. economy
  3. major industries
  4. demograhpics
  5. tenancy act if landlord or tenant biased
  6. quality of renters that are paying in this range
  7. difficulties in holding a large number of these (100+ homes)

Thanks very much!

 Do you have a reason to be looking in Lima? That is a very specific area and I do not really know of much happening around there. You might not find a high demand for rentals out there. Maybe looking into the larger markets, like the three Cs?

Only reason for Lima is that there is an opportunity to purchase a large package of homes, hence my inquiry to that area.  Otherwise, am quite open to whatever region  makes sense for cap rates and flip returns.

I won't be much help with Lima specifically, but if you had to take a guess on the quality of tenant you'd get for $300-400 a month, what would you assume? I'm sure there are some exceptions, but I'd put your vacancy rate much higher than the recommended 10% on that low of rent, and increase your projections for eviction costs (if done through an attorney (required if the property is in an LLC.), you're looking at $300-400 each time.

Also, owning 1 unit from afar is difficult I'm sure, I can't imagine 100+. Impossible? Absolutely not. A much larger challenge than owning 20 higher performing units? I'd say so. 

The allure is way below market rents (400 vs 650 so I'm told)  and management in place... but I know, things always are presented better than they actually are...hence the temptation of the "cheap" deals!  If lower rents than actual market is true, then you would think these "low quality tenants" would most likely stay and pay as everywhere else is asking for more...hmmm

Thank you…! Can you recommend a website to view listings as per your recommendation? In Canada, we have a national MLS where you can search the whole country and pretty well every single listing is accessible through the one website (called monopoly!). However, I understand the US is more disjointed when it comes to property listing websites. Thanks in advance!

@Henry Der I came to the Dayton market 2 years ago from Boise to invest. It’s a jungle here. Lots of folks looking to take advantage of out of area investors. It’s insane. Not to mention the wonky laws. It can take over a month to get a deed recorded unless it’s taken into the court house. No electronic recording. The learning curb is steep here. There is very little integrity in the business culture. BUT, once you learn a proper system you can easily see 30% returns on solid investments. PM me if you want more info on how I did it. Our biggest problem now is finding good contractors. It’s a tight market.

@Rodney Rowland Yarger - would like to do some home flips and buy/hold/rents.  Would like to hear how some of your Canadians have entered and succeeded in Ohio.  Thanks!

@Henry Der There are a couple other Canadians I know investing in the Dayton Ohio area. This area has had it's past economic issues. The economy is great, and much more diversified now. It's growing at a nice pace.

In general, Ohio law doesn't favor the tenant or the landlord. When needed, I can do an eviction for non-payment of rent and have property possession back in 4-5 weeks.

30k homes rent for about $600. 50k homes will rent for 700-750 and, in general, have better odds at better tenants. Good tenant screening is a MUST.

There are multiple investors in the area with 100+ properties. That's not an issue.

We have a lot of good Investors, Business and People in the area, find those. Avoid the few who are selling pipe dreams, and the people who associate with them.

Contractors are the only real challenge. Everything else is pretty straightforward.

@Hai Loc I see different numbers, depending on who is doing the calculating.

Rents HAVE gone up 10% or so over the past year in the B/C/D neighborhoods.

Of course, it's equally true that the rents have gone up 10% or so over the past 5 years. 

It's far less staggering with the longer perspective.

Originally posted by @Darrin Carey :

@Hai Loc I see different numbers, depending on who is doing the calculating.

Rents HAVE gone up 10% or so over the past year in the B/C/D neighborhoods.

Of course, it's equally true that the rents have gone up 10% or so over the past 5 years. 

It's far less staggering with the longer perspective.

My mistake 7.38% Median and 9.26  average sales price

https://www.dabr.com/housing-data/