CLE real estate...a bad investment? or good?

[nep321]

What about the political or financial health of Ohio these days? It seems like the state has a surplus and is doing great. They even repealed corporate income and franchise taxes as of 2014, and the individual income tax rates are like 3-4%, which is low! Both Cleveland and Columbus metros are booming with jobs, too. How are they doing it?!

[theurbanfiles]

Well I do think positive things are happening with Ohio, though while I have some general ideas I'm definitely not expert enough to speak on it.

[usernametaken]

Data point -- purchased a property in early 2010 for $30k in Euclid. Currently Zillow values it at $40k as does one real estate agent I talked to (although he assumes the property is in excellent shape to get that price, which is not true). After seeing the house, another agent told me I could get $35k tops and then deduct the 6 percent fees and my share of closing costs. So basically I would break-even on my purchase cost.

Was considering on selling as my 2-year old tenant just left and I live out of state and am tired of dealing with rude tenants and uncertainty about whether grass is mowed, whether rent is late etc... If I had a great tenant, its a no-brainer on renting being a great investment option in the greater Cleveland area. I think that the population will grow consistently albeit slowly in the near future.

In my case, $650 rent per month*12 = $7800. After property taxes and some repairs each year, I can still get $4000 net gain most years (although one year I lost money due to major repairs). $4000/$30000 property price is a great 13.33 percent annual return. Problem is that getting a great tenant is very hard...most people wanting to rent such cheap houses will have bad credit.

[davesantos23]

Do you guys lower the rent increase rate for good tenants? I think its very important the peoplee who rent. Would rather have a good tenant who has proven to take care of the property, then paying repair fees and worrying about the tenant later on, even if he pays higher rent.

[L2DB]

I don't typically increase it except when there's turnover, but I tend to average people staying only 2 years or so so it hasn't been a big deal. If someone was there 4-5 years and was good, I might increae it some at that point, but keeping good tenants trumps a small rent increase (and the possibility of them leaving) by a lot.

[nep321]

I just hope to god that it's not hard to find a decent 1 bd rental for $700-900 in a good area, when and if I move there in May.

[bjimmy24]

Originally Posted by nep321

I just hope to god that it's not hard to find a decent 1 bd rental for $700-900 in a good area, when and if I move there in May.

It's not.

[varanj_16]

Trying to resurrect this thread in Nov 2017:

I am an out-of-state investor and looking to buy a SFR or townhome in CLEVELAND with a max budget of 325K

Goal is 8+ rated schools, safe neighborhood, new construction and rental income to match as close as it can to my monthly PITI payments.

Please advice. I found a few new construction properties on Zillow but would appreciate local folks insights.