Affordability is arguably the most motivating feature in the real estate business. A rental property can become profitable, sure, but it either is or isn’t affordable. Some rental markets, such as the Cleveland real estate market, are hotbeds for inexpensive properties. What are some other reasons you should invest in the Cleveland housing market? Where can you find the best Cleveland houses for sale? What about short-term rental properties in Cleveland; is Airbnb legal in Cleveland? To learn the answers to these pertinent questions, keep reading this post!
Related: Here Are the 10 Most Affordable Real Estate Markets for 2019
Cleveland Real Estate Market: City-Level Data
Before we tackle any of the previously mentioned questions, we need to quantitively evaluate the Cleveland real estate market. We can do so by using the data from an investment tool called the rental property calculator. Wondering where you can find a rental property calculator? Just click here! The link will take you to Mashvisor’s page where you can learn about our tools! In the meantime, take a look at the data of the average Cleveland real estate investment below, provided by Mashvisor.
Pricing
- Median Property Price: $178,379
- Price per Square Foot: $112
- Price-to-Rent Ratio: 15
Traditional Investing
- Rental Income: $974
- Cap Rate/ Cash on Cash Return: 1%
Airbnb Investing
- Rental Income: $2,055
- Cap Rate / Cash on Cash Return: 5.4%
- Occupancy Rate: 48.7%
Why You Should Invest in the Cleveland Real Estate Market
As you can see from the data, there is a lot to talk about with the typical Cleveland houses for sale. Cleveland investment properties are affordable, profitable, in demand, and successful with Airbnb.
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Affordable Investment Properties
The primary selling point of Cleveland houses for sale is that they are extremely affordable. Some of the best neighborhoods in Cleveland, for instance, have properties that are less than $100,000! The median Cleveland real estate investment price is an impressive $178,379. This is about half the national median price of approximately $340,000. Even relative to the Ohio real estate market, Cleveland is very inexpensive. According to Mashvisor, the median Ohio property price is $220,770. Not only is the average price cost-effective, but the city’s cost of living is also 23 percent lower than the national average. Cleveland’s affordability comes in more ways than one and will definitely attract both real estate investors and prospective tenants.
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Profitability and Appreciation
Affordability is a great feature for rental properties, but the bread-and-butter of real estate investing is rental income. Profitability is another facet the Cleveland housing market excels in. The average traditional rental income in the city, for example, is $974. This is merely an average, meaning that actual Cleveland houses for sale will most likely generate higher rental income. Airbnb Cleveland is even more profitable, with an average ROI of 5.41% and rental income of $2,055.
Cleveland investment properties also benefit from another form of profitability: appreciation. During the last 12 months, the appreciation rate of the Cleveland housing market was 6.16%. So far, the appreciation rate of 2019 is following a higher trajectory. The rate of the last quarter was 1.82%, which annualizes to 7.49%. The high appreciation rate of the market is another great reason to purchase Cleveland houses for sale.
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Rental Property Demand
The demand for a Cleveland investment property is another reason to buy Cleveland houses for sale. As seen from Mashvisor’s data, the price-to-rent ratio is over 15, meaning it is more affordable for a person to live in a Cleveland rental property than to purchase a home. This gives investors an advantage, as renting out becomes the go-to for residents. This is clearly the case in Cleveland, with 58 percent of residents renting out an investment property.
Related: The 5 Most In-Demand Cities for Renters
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Airbnb Cleveland
As indicated by Mashvisor’s data, Airbnb investing is the more profitable strategy for Cleveland investment properties. Tourism has been peaking in Cleveland as of late. In 2017, over 18.5 million tourists visited the city, which was a 2.3 percent increase from the previous year. This increase set a record and trumped the 1.9 percent and 2 percent increases of the US market and Ohio real estate market, respectively. With an $8.8 billion impact on the city’s economy, it’s easy to see why many Cleveland houses for sale are being purchased and used as Airbnb rentals.
Is Airbnb Legal in Cleveland?
But before you consider purchasing Cleveland houses for sale for Airbnb purposes, you need to know the Airbnb regulations in Cleveland. Fortunately, Airbnb is fully legalized in Cleveland. The most notable Airbnb regulations are a business license requirement, 5.5% Bed Tax, and a 3% Transient Occupancy Tax. To learn more about the Airbnb regulations in Cleveland, visit Airbnb’s Help Page.
Best Neighborhoods in Cleveland: Traditional Investing
We can now answer the final question mentioned at the beginning of this post: What are the best places to search for houses for sale in Cleveland, OH? According to Mashvisor, the best neighborhoods with Cleveland real estate for sale (for traditional investing) are St. Claire-Superior, Euclid Green, and Union Miles Park.
St. Claire-Superior
Pricing
- Median Property Price: $60,000
- Price-to-Rent Ratio: 5
Traditional Investing
- Rental Income: $990
- Cap Rate / Cash on Cash Return: 6.6%
Euclid Green
Pricing
- Median Property Price: $178,974
- Price per Square Foot: $104
- Price-to-Rent Ratio: 10
Traditional Investing
- Rental Income: $1,457
- Cap Rate / Cash on Cash Return: 4.4%
Union Miles Park
Pricing
- Median Property Price: $63,500
- Price per Square Foot: $43
- Price-to-Rent Ratio: 7
Traditional Investing
- Rental Income: $802
- Cap Rate / Cash on Cash Return: 3.6%
Best Neighborhoods in Cleveland: Airbnb Investing
What about Airbnb; where to invest in real estate in Cleveland for Airbnb investing? According to Mashvisor, the best neighborhoods for Cleveland houses for sale are Jefferson, Central, and Tremont.
Jefferson
Pricing
- Median Property Price: $98,009
- Price per Square Foot: $85
- Price-to-Rent Ratio: 10
Airbnb Investing
- Rental Income: $2,380
- Cap Rate / Cash on Cash Return: 14.5%
- Occupancy Rate: 54%
Central
Pricing
- Median Property Price: $125,700
- Price per Square Foot: $80
- Price-to-Rent Ratio: 11
Airbnb Investing
- Rental Income: $2,902
- Cap Rate / Cash on Cash Return: 13.8%
Tremont
Pricing
- Median Property Price: $266,300
- Price per Square Foot: $123
- Price-to-Rent Ratio: 19
Airbnb Investing
- Rental Income: $2,183
- Cap Rate / Cash on Cash Return: 6.9%
- Occupancy Rate: 55%
To sum it all up in one sentence: the Cleveland housing market is an affordable, profitable, appreciable, in-demand, and Airbnb-friendly Midwest market in 2019. To start searching for Cleveland houses for sale, CLICK HERE to start your FREE 14-day trial with Mashvisor!