You don’t have to wait for a buyer’s market to score a good real estate investment deal. Though you might be paying more in a seller’s market, you can still find lucrative opportunities in areas that are promising even more growth and demand in the future. Here’s where to start looking in Ohio.
Ohio’s housing market is in high demand, and savvy investors would do well to take notice. Home values throughout the Buckeye State have steadily been increasing since 2013 and are expected to climb about 5% within the next year alone.
Even though hot seller’s markets like Ohio’s typically mean paying more for properties, investors can still find lucrative opportunities. Take a look at the five best real estate investment markets in Ohio that are most promising for a healthy ROI.
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Columbus is the county seat of Franklin County, the most populous county in Ohio. It’s also home to Ohio State University, a prestigious school with more than 60,000 students enrolled (and potentially looking for student rental housing!).
The area has been a seller’s market for quite some time, with the median home value rising 8.3% in the past year and projecting to increase nearly 6% in the coming year. Rental rates have notably increased since 2014, up more than $200 per month in the past five years.
However, reports claim that wages have kept pace with the rise in housing costs, which have many considering the buying option to avoid the sharp increase in rent. This could mean more competition for investors, especially since homes aren’t staying on the market long. But it also spells good news that the housing market will likely remain strong in the coming years.
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Baltimore might be a small city, but it has big opportunities for real estate investors looking at the multi-family housing market. The median home value has skyrocketed nearly $100,000 since 2013 and is forecasted to rise another 7% in the next year.
Investors looking for a bargain will be particularly interested in the area’s foreclosure outlook. Baltimore’s foreclosure rate is more than three times the national average (3.8 vs 1.2, respectively). Baltimore’s number of delinquent mortgages is also more than twice the national rate (2.6% vs 1.1%, respectively), while 7.7% of Baltimore homeowners are underwater on their mortgages (i.e. the mortgage is more than their home is worth).
While this doesn’t sound great for homeowners, it can provide an in to the market for investors who want to buy multiple rental properties or flip homes for a profit.
Cleveland’s market isn’t quite as hot as other parts of Ohio, but for investors, that could mean that now is the best time to strike a deal. Home values climbed an impressive 11.8% in the past year are expected to increase by 7.7% within the next year.
But what’s most notable for investors is the home prices themselves: Cleveland’s median home value is just $55,900, with a median selling price of $59,200. Median household incomes remain lower than the national average at $52,489. Unemployment is also higher than the national average at 6.4%, all of which could help to eliminate some of the local competition.
Economic growth has been slow, but it does exist. In spite of its lagging expansion, the city has been touted as one of the best places to stretch your paycheck. It’s home to a number of colleges, which can be grounds for a promising rental market. The city is turning around its once-bleak outlook and starting to carve away its unemployment and promote job growth, which will only benefit the local real estate.
Smaller than the other cities on this list, Madison is a quiet, family-friendly town with big potential. It has one of the state’s highest average rental incomes for multi-family homes, with a median rent of $1,113 per month.
Madison’s lower home values and higher rent creates a dream combination for investors. The market is cooling down just a bit, but home values are still expected to grow 4% within the coming year. The median listing price for Madison homes is $150,000, which a little higher than the state average but lower than Columbus and Baltimore.
Part of Hamilton County, this area is the third most populous in the state. Cincinnati is the county seat and is in a prime locale for the transportation and commerce industries. Economic reports say that Cincinnati's economy is Ohio’s largest and the fastest-growing in the Midwest, thanks to a boom in manufacturing, financial, and professional services.
The city is currently in a seller’s market, with home values having gone up 10.9% in the past year and expected to increase 7.6% within the coming year.
The median rent price in Cincinnati is $1,275, which is slightly lower than other areas in its metro and could help to attract renters. Rent prices have been steadily increasing in the past decade, rising more than $300 per month since 2014.
The rise in home values and rent, combined with a strong economy, give investors every reason to look deeper into this market.
How to Maximize Your Ohio Real Estate Investment
Though most of Ohio is experiencing growth, conditions can vary from market to market. Things like economic outlook, unemployment rate, home values, and other criteria will affect the demand for housing, which will ultimately affect how much you make from your investment.
For accurate insights, it’s best to partner with a top-rated, local real estate agent for guidance and support when breaking into a new market. Your agent can give you expert advice on what the market is doing and other information on the area that can help you make a smart investment.
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