Anyone living in Ohio or nearby?

[Irishgrrrl]

I''m wondering what property values and average rent is in and near Ohio?

I''m playing with the idea of buying some rental property, and I''ve heard that property values in Ohio are very low right now and rent is very high by comparison. For example, I have seen some three to four unit apartment buildings for $20,000 or even less, and I''m seeing rent rates of about $400 or so for a one-bedroom apartment. I''ve mainly been looking in the Cincinnati area so far, but I would consider just about anywhere in Ohio (or even a different state if the situation is similar somewhere else in the country). Any suggestions?

 

[aliciagirl]

I''m in Cleveland. Depending on where property is, the rent''s here are still very high. Cleveland has a lot of bad neighborhoods where rent is very low. Any specific questions? I''ve only lived here for a few months, but I can try to find the answer if you''re interested in the Cleveland-ish area.

 

[Irishgrrrl]

Hi, Aliciagirl! Thanks for the reply!

Cleveland is definitely an area that we would be willing to consider. I''ve been looking around on Realtor.com, and I''m seeing these duplexes and apartment buildings that are RIDICULOUSLY cheap (like $1,000 and up)! I don''t know that we would want to buy a REALLY cheap place, because we would want one that we could rent out right away (or better yet, one that already has tenants), and not one that would have to have a lot of work done to it first.

Just an example of what I''m finding on Realtor.com: This one is only $2,500!!!

And that one is just one of many, MANY examples. I''m thinking, "What''s the catch?"

Also, since we don''t live anywhere near Ohio (we''re in southcentral Pennsylvania), we would probably hire a property management company to take care of it for us. Do you know what the going rate for property management is in the area?

Thanks again!

 

[Tacori E-ring]

I grew up in Ohio (kinda). I went to high school in Cleveland and let me tell you there are some *ROUGH* areas. Also the buildings are older...more cost to think about. I would actually suggest getting properties in close to a university (and Ohio has a lot of colleges). I think of what I spent for rent while in college and it was CRAZY high. Plus parents co-sign so there is more responsibility if they do mess up your place. I also would guess getting your rent would be easier (we paid per quarter). And leases sign a year or so in advance.

If you do have your heart set on being landlords (and it is an ugly job. I know from experience) a management co would be a good idea. You probably won''t have any cash flow but if you are doing it for a long term investment (and NOW is the time to buy and hold) it could be a good idea. I am not sure what the rate is b/c DH manages ours or I should say what we have left. He has been through it all. Court. Police. Threats. Evictions. Trashed properties. Fire. Theft. It really makes you see people differently. People are crazy.

 

[Irishgrrrl]

Date: 10/13/2008 3:31:28 PM
Author: Tacori E-ring
I grew up in Ohio (kinda). I went to high school in Cleveland and let me tell you there are some *ROUGH* areas. Also the buildings are older...more cost to think about. I would actually suggest getting properties in close to a university (and Ohio has a lot of colleges). I think of what I spent for rent while in college and it was CRAZY high. Plus parents co-sign so there is more responsibility if they do mess up your place. I also would guess getting your rent would be easier (we paid per quarter). And leases sign a year or so in advance.

If you do have your heart set on being landlords (and it is an ugly job. I know from experience) a management co would be a good idea. You probably won''t have any cash flow but if you are doing it for a long term investment (and NOW is the time to buy and hold) it could be a good idea. I am not sure what the rate is b/c DH manages ours or I should say what we have left. He has been through it all. Court. Police. Threats. Evictions. Trashed properties. Fire. Theft. It really makes you see people differently. People are crazy.

Tacori, thanks for the info!

I have heard horror stories about people owning rental properties and getting awful tenants. I guess that''s just a risk you take if you''re going to be a landlord.

I''m hoping to find a CHEAP place with about three or four units, hoping to get a positive cash flow right away. Do you think that would even be possible? We aren''t looking for a gorgeous, high-class apartment building . . . but we don''t want to be slumlords either! LOL!

 

[deegee]

My guess is that if you''re finding really cheap buildings in Cincinnati or Cleveland, they''re not in parts of town you want to go to. I am more familiar with Cincinnati, and know there are some very rough areas with high violent crime rates, gangs, drugs, etc. Be careful.

 

[Tacori E-ring]

Irish, how much cash flow are you expecting? One month of non-payment usually puts a pretty big dent into your annual profit. Plus any upkeep and repairs. I am pretty sure the management co is a % of the RENT but there is NO WAY you could manage it out of state.

 

[Irishgrrrl]

Oh, and could you guys tell me what are some areas in Ohio cities that are "good" or at least "OK"? For example, I''ve seen some properties in Cleveland Heights that look nice and are within our price range. Is Cleveland Heights OK, or is it one of the more "shady" areas?

Also, any advice on other neighborhoods in Cleveland, or in ANY Ohio city, would be great!

 

[Irishgrrrl]

Deegee and Tacori, thank you! We''re looking for enough cash flow to cover our expenses (including mortgage), plus some. The "plus some" is pretty negotiable, but more is better, of course!

 

[Tacori E-ring]

We lived in Cleveland Hts

what road?

 

[Tacori E-ring]

DH says a standard % for management co is 10% of rent.

 

[Irishgrrrl]

Date: 10/13/2008 4:12:36 PM
Author: Tacori E-ring
We lived in Cleveland Hts

what road?

Oh, cool!

There''s one on Noble Road that looks nice . . . here''s the link.

Can you take a guess as to what kind of rent we might be able to get for a place like that one?

Thanks again for all your help with this, guys!

 

[Irishgrrrl]

Date: 10/13/2008 4:15:46 PM
Author: Tacori E-ring
DH says a standard % for management co is 10% of rent.

Oh, that helps! And that''s about what I had expected.

 

[aliciagirl]

I would definitely suggest coming to the area and checking it out. Cleveland is one of those places that one block may be really nice and have $400,000 townhomes while the next block is one of the worst in the city. It''s odd in that way. I would stay away from the town East Cleveland if at all possible. The area around John Carroll University would be nice, but be careful with areas around Case Western. Again, nice on one block and sketchy on the next.

 

[Loves Vintage]

Hi Irishgrrl,

I'd really caution against this idea. From personal experience with real estate management companies in upstate NY, it is very difficult to find a management company that is trustworthy, up to the task, professional, timely and that stays in the business for years (or, for more than a few months!!) Tenants do not pay rent. Do not live willingly when they are evicted. And, usually trash the places when they do leave. Repairs are another issue. Many investors do not wish to spend big $$ on upkeep, have management companies who are willing to put in quick inexpensive fixes and then sell the places to some poor unsuspecting new investor who gets stuck with bills to the tune of several thousands to fix things like sewer lines that were roto-rooted down to the soil for years.

Owners that are selling these houses for supercheap are inevitably doing so for one reason -- they are not making any money.

10% for a management fee sounds right, but you will get charged extra for evictions, maintenance (lawn mowing, snow removal, yard clean-up when the town sends you a citation for junk strewn about the yards) and all repairs, for which they may also get a mark-up.

The only way I think it could possibly work is if you have someone in the area who could handle property management for you (but, then they would have to be comfortable with going to the property and knocking on doors to collect rent.) Do not expect rental payments to come in the form of a check.

Does that, uhm, help?

The situation could be totally different in Ohio. I can't comment on Ohio specifically, but I would recommend doing lots of research and talking to owners who have owned rental properties in the area for years.

 

[katamari]

Hi Irishgrrl! I am living in Columbus now, but I also lived in Cincinnati, too. The one thing I would consider is the vacancy rating. Columbus has some very nice properties for sale right now, but it is also very vacant. For instance, I recently sat on a grad. school panel about finding an apartment, and the people who attended the panel couldn''t believe that you don''t start looking for an apartment here until the month before you want to move in. Most property owners won''t even talk to you earlier because places tend to sit vacant between tenants, so they won''t ''hold'' anything.

If you were looking in Columbus, I would recommend Grandview, German Village, or Clintonville (if you post links, I will tell you whether or not they are in these neighborhoods if I know). All of these areas have a lot of graduate students and young professionals--not yet ready to buy a house, but certainly mature enough to pay their rent.

In Cincinnati, I would consider Anderson, Norwood (by Xavier), Montgomery, or Mason. Near the UC campus probably isn''t good because there is no real divide between students and impoverished neighborhoods. Plus, it is very urban, so there are many more apartment buildings rather than single homes or duplexes.

I would recommend getting HUD approved for Section 8. My parents used to have rental properties, and, if you are dealing with the government, you know you will get rent. Plus, there is usually a waiting list for Section 8 homes, so you won''t have to stay vacant.

 

[littlelysser]

I grew up in Cincinnati, so I have a pretty good knowledge of the areas around the city. What areas are you looking in?

But, like the others, I'd really caution you to think long and hard about it. These cheap buildings are often in a HORRIBLE state of disrepair and would likely cost a lot of money to bring up to code...a task which would be very difficult for you to do long distance. And really if it looks too good to be true, well, it probably is.

ETA - I just did a search in Cleveland and looked at some of the pictures of the units that are under 20k. Do your search again and look at the places that have more than a single picture...these are not the kind of places that are going to allow you to generate cash flow right away.

 

[Tacori E-ring]

I haven''t lived there in 10 years so it doesn''t ring a bell. Cleveland Hts. is very diverse. One side was a mansion and the other neighbor was a duplex when we lived there. If you are really serious I would call an agent. They should tell you what the going rate of rent is there.

DH does/did have some section 8 homes which is nice b/c the city sends the rent to DH directly but there are lots of loops and inspections. He once had 15 rentals. Only ONE paid on time and with a check. The rest were always a hassle to get and always in cash (which mean he had to PICK it up every month

)

 

[Diamond*Dana]

I live in the Cleveland area (Strongsville), and I am going to agree with Tacori about one side of the street being nice, the other side is a bit shady. There are definitely nicer neighborhoods in Cleveland, but I really think that you should check the area out for yourself and then decide. I would have to think that with the price that low that there is either something really in need of repair or it is not in the best area.

 

[Irishgrrrl]

Everyone, thank you so much for all the advice!

DH and I talked about it last night, and we''re still considering Ohio, but we''re hoping to find something here in Pennsylvania. All of the attorneys at my law firm are admitted to practice in PA, so we would be able to get any legal services we might need for free as long as the rental property is located here in PA. Ohio is still definitely a possibility if we can''t find something in PA, though. Thanks again, everyone!

 

[crown1]

i don''t mean to be a downer but i agree with others urging you to personally investigate this situation before you commit to it. i do know a little about the work involved in making money and keeping the tenant, yourself and the community happy in a similiar scenario. in my area, out of state landlords are not highly regarded. whether this is fair or not, i will not make that judgement, but when you have a bad situation in your face and someone several states away is making money on it or just letting it sit idle and uncared for it makes the natives restless. i wish you well if you do find this is your cup of tea.

 

[Daydreamer7130]

I am in a nice burb just south of Cleveland and newly transplanted from Trumbull county. Trumbull county is next to Mahoning where the infamous Youngstown is. Trumbull county borders the PA line and is probably more country than what people expect. I''ve had a house for sale for over 18 months now and getting frustrated (long story). However, there are a ton of properties cheap and some very nice areas.

Trumbull county is between Cleveland and Pittsburgh and between Chicago and New York City. Pretty cool location.