Hi BP Community,
I'm looking at a deal in Cleveland, Ohio and am unfamiliar with the area and its rental market. I'm wondering if there's anyone with experience investing there that can shed some light on a few questions for me.
My biggest concerns are with how long it would take to place a tenant and tenant turnover rates.
The deal I'm looking at is a duplex and each unit should rent for $575. Including remodel the initial investment will cost around $40,000. My focus is on the cash flow potential of the property.
1) Is this a good deal for the area? Does it sound too good to be true?
2) Is one month a reasonable time for tenant placement here?
3) Are there any issues with investing in Cleveland itself that anyone has come across?
Thanks in advance for taking the time to address my questions and concerns.
1. The Cleveland area is quite diverse and can vary block to block in certain areas.
2. One month is reasonable with quality management and a quality property.
3. Issues depend on the quality of tenant, neighborhood and management. You can get great results in most areas, but also bad results.
Any two bedroom in Cleveland under $600 is generally not in a desirable neighborhood. C neighborhoods are generally commanding $700 and above for 2 bedroom duplexes.
Hope that helps!
Thank you very much John, I truly appreciate the input. This will be my first rental purchase and I'd heard that the best returns are out in the Midwest. It's still bewildering as to how one would go about finding an adequate market and which states currently offer that, but I suppose that the more time I spend researching the topic the more confident I will feel about this first step in the real estate world. So as to clarify, anything under $600 would be in a bad neighborhood and thus a poor choice for a first time buyer such as myself. Is that correct?
Also I don't want to take up too much of your time but if you get the chance, would you be able to name a few neighborhoods in the Cleveland area that would be adequate for a first time buyer such as myself to look into?
Is this an on-market property? And where is it specifically?
One month is reasonable if it's a decent property, but it's probably not just based on the numbers. Like @John Koster said, it all depends on the neighborhood, the team, and maybe most importantly then tenants. You should assume high turnover and have an extra line item for evictions and the associated turnover costs if you're venturing into the lower end of the market.
The short answer is yes, too good to be true.
Thanks for the reply Ryan, I really appreciate it. To answer your question, yes it's an on-market property in the 44102 area.
From the answers I'm receiving I gather that venturing into the lower end of the market is not the best choice for me. Therefore I've begun to look into alternate zip codes which I hear are more likely to be of benefit for a first time buyer such as myself. If anyone were to have the contact info for a good property manager and/or agent in the area, I would very much like to start reaching out to a few people out there. And of course I would be very grateful for anyone willing to share these property managers and/or agents contact info.