Cleveland, Ohio is a $170 billion industrial economy with manufacturing, healthcare, insurance and education industries. It is home to Cuyahoga County boasting a population of more than 1.2 million residents. The region has stable employment and a strong rental culture with attractive vacancy rates relative to the remarkably low acquisition price for residential homes. This, plus its remarkably low acquisition prices ($40,000 - $60,000) for single-family homes creates 10%+ cap rates and 20%+ cash on cash returns making it a solid income-producing region. The tradeoff for such strong investment performance is above-average crime rates, a slightly declining population and lower potential for asset appreciation. It is a cash flow investment market
Who are partner is and what they say
We work with one, reliable and consistent partner in Cleveland who is new to the local area and has been a hands-on expert several other markets in the USA for over 20 years. His team has bought, refurbished, rented and sold over 1000 properties. Our partner says: “We’ve had our eye on investing in the Cleveland, Ohio market for a few years. Right now there are plenty of attractive factors in this market, but the low price of inventory combined with reasonable vacancy rates and the lease fees are particularly appealing. Now this does depend on your definition of “reasonable” vacancy rates and these days, Cleveland is at 8.3% vacancy rate, which is slightly above the national average. The rental vacancy rate in Cleveland peaked in 2005 at 11.59%. Since then it has fallen by 3.33% to 8.26% according to Department of Numbers data.
What the experts say
Cleveland and Cuyahoga County have extremely favourable rental to home price ratios with high cap rates for single-family homes. The region has stable employment and a strong rental culture with attractive vacancy rates relative to the remarkably low acquisition price for residential real estate, which creates high cash-on-cash returns of 20%+ making it a solid income-producing region. The tradeoff for such strong investment performance is above-average crime rates, a slightly declining population and lower potential for asset appreciation. It’s all about strong cash flow.
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