Mid-Year Market Update: Cleveland Rental Trends & Investors Insights

We're almost halfway through the year, and it’s an ideal moment for rental property investors in Cleveland to pause and assess where our local market stands. Cleveland’s real estate market has shown resilience and steady growth, making it continually attractive for investors looking for stability and strong returns.

As someone who actively invests in Cleveland real estate—owning over 30 rentals, completing over 100 flips, and helping hundreds of clients successfully navigate this market—I regularly analyze key data and trends. This mid-year update is your guide to understanding the current rental market trends, what’s influencing them, and how investors can capitalize on opportunities in the months ahead.

Snapshot of the Cleveland Rental Market

As we reach mid-year, here are key statistics investors should know:

• Average rent growth is currently tracking at around 4-6% year-over-year.
• Occupancy rates across the Cleveland metro area remain consistently high, averaging 93-95%, with some neighborhoods seeing even higher occupancy.
• Average days-on-market for rental listings have dropped, indicating stronger tenant demand.
• Property appreciation continues, albeit at a slightly moderated pace from previous record highs, averaging around 5-7% annually.

Factors Driving Cleveland’s Rental Trends

Let’s explore what's fueling these market conditions and what it means for your investment decisions:

1. Continued Economic Strength

Cleveland’s economic pillars—healthcare, education, manufacturing, and technology—are consistently creating jobs and attracting residents. Employment growth supports rental demand, particularly in neighborhoods close to major employers like Cleveland Clinic, University Hospitals, and Case Western Reserve University.

2. Increased Demand for Quality Rentals

Post-pandemic shifts have led tenants to prioritize upgraded housing options. Modern, clean, and well-managed properties command premium rents and experience less turnover. Investors who offer high-quality finishes and updated amenities are seeing significantly higher returns.

3. Rising Home Prices and Interest Rates

Homeownership has become increasingly difficult for many due to rising home prices and higher mortgage rates. This affordability challenge bolsters the rental market, as more Cleveland residents choose renting over buying, fueling consistent rental demand.

Neighborhood-Level Rental Insights

Cleveland is diverse, and each neighborhood offers distinct investment characteristics. Here’s how notable neighborhoods are performing midway through the year:

Hot Rental Markets:

• Lakewood and West Park: Stable, family-oriented neighborhoods with strong demand and steady rent increases.
• Ohio City and Tremont: High appreciation areas attracting younger professionals and higher-income tenants, driving rents upward significantly.

Emerging Opportunities:

• Old Brooklyn and Slavic Village: These neighborhoods are seeing increased investor activity, offering affordable entry points, rising tenant demand, and improving rental yields.
• Collinwood and Euclid: Both continue offering high-yield, lower-cost investment opportunities, ideal for investors seeking cash flow.

Legislation & Policy Trends Impacting Investors

Cleveland landlords must pay close attention to evolving local regulations, as compliance significantly impacts rental profitability:

Lead-Safe Certification

Cleveland’s mandatory Lead-Safe Certification remains a crucial compliance factor for landlords. Properties built before 1978 must obtain this certification, ensuring safety and regulatory compliance. Investors should proactively budget and plan for this requirement.

Short-Term Rental Regulations

Cleveland recently clarified short-term rental regulations. Investors exploring platforms like Airbnb should stay current on zoning restrictions and licensing requirements to avoid potential fines or legal challenges.

Investment Strategies for Second-Half 2025

Given current trends, here are proven strategies for rental investors looking to optimize returns in Cleveland:

1. Invest in Strategic Renovations

Strategic upgrades, such as kitchen and bath renovations, updated flooring, energy-efficient appliances, and enhanced curb appeal, allow investors to capture premium rents and lower vacancies.

2. Capitalize on Multifamily Investments

Duplexes, triplexes, and smaller multifamily buildings continue offering excellent returns due to their lower per-unit acquisition costs and streamlined management efficiencies. Consider multifamily options near employment hubs and transportation routes.

3. Explore Value-Add Opportunities

Purchasing underperforming or poorly managed properties and improving operations can significantly boost rental income and property values. This approach works particularly well in emerging neighborhoods with growth potential like Old Brooklyn, Clark-Fulton, and Maple Heights.

Potential Risks to Watch

Being aware of potential market challenges is crucial for informed decision-making:

• Increased Competition: Institutional investors continue entering the Cleveland market, driving up competition for attractive properties. Investors must act quickly and decisively when quality deals surface.
• Economic Uncertainty: Broader economic factors, including inflation and potential recession concerns, could eventually affect rental demand or tenant affordability. Staying financially flexible is crucial.

Investor Case Study: How Current Trends Translate to Success

To illustrate the opportunities, present in today’s market, consider a recent client example:

A client purchased a small multifamily property in Old Brooklyn early this year. Recognizing the neighborhood’s improving market conditions and increasing tenant demand, we strategically renovated kitchens, flooring, and landscaping. Within weeks, the client secured quality tenants at rents substantially above initial projections, positioning the property for significant long-term appreciation.

This scenario exemplifies the real-world potential when investors leverage current market insights effectively.

Key Takeaways & Actionable Steps

Here’s your actionable checklist based on Cleveland’s mid-year rental market trends:

• Evaluate current portfolio performance—assess whether your rents match market rates and identify opportunities for targeted upgrades.
• Research emerging neighborhoods—such as Slavic Village, Old Brooklyn, and Collinwood—for untapped growth opportunities.
• Ensure compliance with Cleveland’s lead-safe laws and short-term rental regulations.
• Optimize tenant experience with responsive property management and thoughtful property enhancements.
• Maintain liquidity and flexibility to quickly capitalize on emerging opportunities or navigate market shifts.

Final Thoughts and Looking Ahead

The Cleveland rental market remains strong and stable mid-year, with ample opportunities for informed investors to generate attractive yields and steady appreciation. Staying educated, proactive, and responsive to market conditions is the key to continued success in this vibrant market.

As always, I'm here as a resource. If you have any questions, or if you're curious about specific investment strategies tailored to your portfolio or goals, don’t hesitate to reach out.

You can always call or text me directly at 216-789-6736. Let’s discuss how you can take full advantage of Cleveland’s current market conditions to strengthen and grow your investment portfolio.

Here’s to your continued investing success!

Warm regards,

Jack Krusinski

Cleveland Real Estate Agent & Investor

216-789-6736

[email protected]