Cleveland Investment Properties (Things That You Should Know)
Are you looking to invest in property in Cleveland, Ohio? Here are things that you know and places to stay away from.
Investment properties are a great way to build wealth and are often a more stable investment strategy than stocks and bonds. Purchasing an investment property can be a stressful process, and knowing where to buy is often one of the harder decisions.
Cleveland is a major city in the state of Ohio with a population of just over 2 million. Location is everything when it comes to real estate so first, we will touch on the best areas to invest in Cleveland (and the areas to avoid).
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Best Areas to Invest in Cleveland
According to Bell Hop, you are going to want to purchase an investment property in a location that is booming – one that will rise with value as time passes, and where you will be able to source the best tenants (those that will pay rent and look after the property). You will want to be sure that the location of your investment will continue to be in a good neighborhood in a few years. The best (and most up and coming) neighborhoods to invest in include the following.
- Tremont. Inner-city so rental income will be higher.
- Ohio City. Also, near the city and on the water, which raises its rental appeal.
- Detroit Shoreway. A scenic location near the city, and the location of the famous ‘Cleveland’ sign and Edgewater Pier.
As can be seen, the best investment opportunities will be nearer the city. While property prices in these nicer suburbs will be higher, you will be able to charge more for rent. You will also be able to attract a higher class of tenants, and this alone can make for a sound investment.
Where to Avoid in Cleveland
Like every major city in the US, Cleveland will have its areas to avoid. If you yourself would not want to live in an area due to crime, or pollution, then chances are you will struggle to get good quality tenants. The parts of Cleveland which have the worst reputations and should be avoided for investors include.
- North Broadway
These areas make up the south-east pocket of Cleveland and are notorious for crime and shootings, as well as poor infrastructure. So, for the sake of your investment (and your future tenants), it is highly suggested to avoid these areas.
Advantages and Disadvantages of Buying an Investment Property in Cleveland
Cleveland is a major US city, and so had a large population, which is a positive when it comes to determining where to buy an investment property. There are any number of different locations within the United States where one could invest, and so we will look over the advantages and disadvantages of choosing Cleveland as your investment location. Here are some info from RoofStock.
- It is a tourist hub, so this keeps the economy high.
- It is ranked among the top 10 cities for population growth.
- Wages are high, and unemployment is only at 4.5%
- It has a low cost of living index (below the national average) and a high quality of life.
- Cleveland ranks as one of the top four markets with a low risk of a real estate dip – which bodes well for long-term investors.
- House prices are rising so it could be difficult to get a return on your investment in the pricier areas.
- There is a fair bit of crime throughout Cleveland, so this increases the chance of property damage.
- Job growth lags behind other major cities
You need to be aware that Cleveland is a large city, and so there will always be pros and cons to investing in property. These can be mitigated by obtaining a good property manager and taking extra care in choosing tenants.
Investing in Airbnb’s in Cleveland
You may be tossing up between the idea of having a traditional rental property as opposed to an Airbnb. While an Airbnb can bring in high returns, there are additional risks involved as well as extra costs. If you do decide to go the Airbnb route, you will need to ensure that your investment property is located in a touristy area, as you will be attracting short-term visitors. Mashvisor notes that investing in an Airbnb in Cleveland is a good strategy as the economy is rising and tourism is growing. However, you need to be aware that unlike long term tenants, rental income is never guaranteed. And the additional taxes and regulations can end up costly.
Market Stats in Cleveland
So, what are the key stats that an investor will want to know when considering an investment property? The most important is of course the median house prices and the strength of the rental market. The median house price in Cleveland is only $69,000 (reference 2), and most importantly, home values are rising by an average of 10.3% per year. The market is strong, and homes are only on the market for 75 days on average.
As for rental data, the median rent is $900 per month in the city areas, and rental prices rise on average 3% per year. So, there is definitely a potential for growth. Also, 50% of homes are occupied by renters, so there are clearly a lot of people in the Cleveland area looking for rental properties, and this competition is what you want when you are an investor.
There is never going to be the perfect location for purchasing an investment property, but all in all, Cleveland, Ohio, is a good location to invest. As long as you take care in choosing the specific location, the property itself, and your tenants, then you should be in for a good long-term investment.
Charles is the founder of infoSpike.com. He enjoys real estate investing, marketing, and personal finance. Read more about Charles here.