There are three factors to consider when you plan on buying rental properties for investment. The first is the median household income of the people in the city; the second is the price of a house in the city, and the third is expected rent per month. The moment you locate a market that checks all the three boxes with high numbers, you will have landed on an excellent investment opportunity. The state of Ohio is one such market that has a scope of high cash flow and growth possibilities.
Renting trends in 3 cities of Ohio
Let us look at January 2020 renting patterns in 3 major cities of Ohio, namely Cleveland, Columbus, and Cincinnati.
The rent in Columbus witnessed a year-over-year (YOY) increase of $25 or 2.7% compared to the rates in January 2019. However, it saw a month-over-month(MOM) decline of $2 or 0.2% when compared to the rates prevalent in last December.
Cleveland saw a YOY increase of $31 or 2.9%, compared to January 2019 and a spike of $4 or 0.4% compared to last December. Cincinnati saw its YOY increase by $42 or 4.3% and an increase of $4 or 0.4% from last December.
Although the national average rent is higher when compared to the cities of Ohio, the rents in Beachwood showed a fast growth of $30 or 1.7% MOM.
Renting an apartment in Beachwood has become very expensive for renters as the average rent has shot up to $1,803. This is followed by Oxford, where the average rate per month has reached $1,601.
The average cost of renters insurance in Ohio is actually quite low compared to other states. For further information about renters insurance in Ohio click here.
Comparison of factors favoring growth in rent in the 3 cities
The housing market has become very competitive, but the investors have continued to pour in. Investing in rental properties is popular as it offers a steady monthly income and also increases the value of the investment.
Wondering what makes these cities in Ohio an ideal place to invest in rental properties? The answer lies in the numbers. Take a look at the below information to get a clear picture.
The historical city of Cincinnati has become a popular destination for as many fortune 500 and 1000 companies have set up their headquarters here. The city has a population of 2.2 million and has become one of the most attractive cities for millennials to reside in.
As per the data provided by Brookings institution, Cincinnati is among the fastest developing region. However, this has not increased the cost of living and housing. It is still below the country average.
As per 2019, the median household income was $80,277, the median price of a house was $165,000, and the median rent per month for a 3 bedroom house in the city was $1,232. This roughly translates to 0.75% of the price of the home, which is on par with the country’s price-to-rent ratio.
These are positive signs for any investor who is looking to buy a rental property in Cincinnati.
The properties in Cleaveland are affordable compared to the rest of the country. This is why it has witnessed a 12% YOY increase in home sales since the last decade. As per 2019, the median household income was $71,582, the median price of a house was $138,000and the median rent per month for a 3 bedroom house in the city was $1,443. This roughly translates to 0.83% of the price of the home, which is above the country’s average price-to-rent ratio.
This increases the possibility of generating a substantial passive income by purchasing a rental property in Cleaveland.
Not only is Columbus, but the capital city of Ohio is also the most significant and technologically advanced city. The city offers affordable housing with the median price of a 3 bedroom house priced at $183,000 as per 2019 data. The median household income was $79,694, and the median rent per month for a 3 bedroom house in the city was $1,310. This roughly translates to 0.90% of the price of the home, which is higher than the country’s average price-to-rent ratio.
These numbers make it an attractive city to invest in and increase your cash flow.
The rental rates in Ohio have witnessed a constant increase. Also, it is a landlord-friendly state as there are no rent control laws here. So invest in Ohio and generate a sizable passive income through renting.
- Columbus: https://www.realwealthnetwork.com/learn/best-places-to-buy-rental-property/#50-13—columbus-ohio
- Cleveland: https://www.realwealthnetwork.com/markets/cleveland-ohio/
- Cincinnati: https://www.realwealthnetwork.com/learn/best-places-to-buy-rental-property/#30-8—cincinnati-ohio
- Oxford: https://www.rentcafe.com/apartments-for-rent/us/oh/oxford/