Location is undoubtedly the most important factor when searching for rental properties. Some locations are known to have top-tier (and thus very expensive) real estate markets, while others are notorious for their low-level market performances. These are two well-known extremes, but there seems to exist a happy medium that many investors seek. To these investors, the best place to invest in real estate, as a broad category, is a location that is underrated, or as mentioned in the title of this blog, is a hidden investment opportunity. Looking for such a “hidden opportunity”? Check out the Columbus real estate market!
Related: Location, Location, Location: What Makes for the Best Place to Invest in Real Estate?
Columbus Real Estate: The Data
The previously mentioned hidden investment opportunities are typically characterized by two features: they are affordable and profitable. Luckily for real estate investors in the area, Columbus Ohio real estate checks off these two boxes. Here’s the data on the Columbus real estate market, according to Mashvisor’s real estate market analysis (which you can learn about by clicking here):
Median Property Price: $255,303
Traditional:
Rental Income: $1,241
Cap Rate / Cash on Cash Return: 1.23%
Airbnb:
Rental Income: $1,455
Cap Rate / Cash on Cash Return: 1.33%
Columbus investment properties are very inexpensive compared to rental properties in the rest of the country; they are below the national average of property prices. Rental properties in Columbus real estate are profitable for both short term rentals and long term rentals. Such diversity in strategies further motivates investors to invest in Columbus real estate. But where exactly are the best neighborhoods in Columbus for each strategy and why should you follow those strategies? Let’s find out!
Look for Columbus investment properties with higher-than-average returns by clicking here!
Best Neighborhoods in Columbus: Traditional
Traditional Columbus investment properties are among the best properties an investor could buy for many reasons. As seen from the data obtained by Mashvisor’s investment property calculator, these properties are relatively cheap and profitable compared to the average US property. The city is also home to the largest community in Ohio with more than half the population residing in rental properties. This ensures a large tenant pool for investors to look out for. The city’s workforce is a mix of blue and white-collar jobs, further cementing a high number of prospective tenants. Many of these tenants are college students, as Ohio State University, the third largest university campus in the country, is located in the city.
Related: The Guide to Renting to College Students
Columbus investment properties are terrific buy-and-hold long term rentals. Not only do they generate high rental income, but they also have high appreciation. Property values in Columbus real estate are expected to increase by 5.8% in 2019. The Columbus real estate market is currently a strong seller’s market, but this disadvantage for buyers is offset by the market’s affordability. If you’re interested in the best neighborhoods in Columbus real estate for traditional investing, consider these areas:
1.) Indianola Terrace
Median Property Price: $160,000
Rental Income: $1,195
Cap Rate / Cash on Cash Return: 2.49%
2.) Downtown
Median Property Price: $336,703
Rental Income: $1,599
Cap Rate / Cash on Cash Return: 1.87%
3.) Necko
Median Property Price: $938,000
Rental Income: $3,227
Cap Rate / Cash on Cash Return: 0.99%
Best Neighborhoods in Columbus: Airbnb
Airbnb Columbus has been nothing short of a success in recent years. Columbus, Ohio has become among the most popular Airbnb destinations in the world. The Midwest has been a trendy destination for Airbnb guests, with many of its cities having flourishing downtown districts and beautiful nature scenes and national parks. Columbus real estate has certainly been on the bucket list of many tourists, as Airbnb Columbus bookings increased by over 250% in the last year, which is more than the 200% increase from the year prior. Overall, Airbnb Columbus investment properties, like their traditional counterparts, have been very affordable and lucrative in recent years.
All that being said, what is the legality of Airbnb short term rentals in the Columbus real estate market?
For many years, short term rentals were neither explicitly allowed or prohibited in Columbus, according to the R Street Institute’s Roomscore 2016 Report. Recently, however, the Columbus City Council passed legislation that will take effect in January 2019. The legislation officially legalizes short term rentals and mandates taxes and a permit requirement, among other rules. Be sure to learn the legal nuances of investing in Airbnb Columbus before purchasing short term rentals. Here are the best neighborhoods in Columbus for Airbnb to focus on:
1.) Livingston Park
Median Property Price: $190,300
Rental Income: $2,161
Cap Rate / Cash on Cash Return: 5.42%
Occupancy Rate: 52%
2.) Weinland Park
Median Property Price: $222,425
Rental Income: $1,850
Cap Rate / Cash on Cash Return: 3.79%
Occupancy Rate: 57%
3.) Schumacher Place
Median Property Price: $299,325
Rental Income: $1,967
Cap Rate / Cash on Cash Return: 2.8%
Occupancy Rate: 51%
Best Neighborhoods in Columbus: Traditional and Airbnb
Overall, most neighborhoods in the Columbus real estate market are suitable for both traditional and Airbnb investing. Here are the best neighborhoods for both strategies:
1.) Victorian Village
Median Property Price: $516,129
Traditional:
Rental Income: $1,694
Cap Rate / Cash on Cash Return: 0.87%
Airbnb:
Rental Income: $2,460
Cap Rate / Cash on Cash Return: 1.60%
Occupancy Rate: 55%
2.) Harrison West
Median Property Price: $346,003
Traditional:
Rental Income: $1,534
Cap Rate / Cash on Cash Return: 0.63%
Airbnb:
Rental Income: $2,462
Cap Rate / Cash on Cash Return: 2.15%
Occupancy Rate: 57%
3.) Dennison Place
Median Property Price: $450,775
Traditional:
Rental Income: $1,595
Cap Rate / Cash on Cash Return: 0.22%
Airbnb:
Rental Income: $2,673
Cap Rate / Cash on Cash Return: 2.01%
Occupancy Rate: 57%
The Columbus real estate market is undoubtedly one of the most underrated markets in the US. With high rental income, affordable property prices, and rental strategy versatility, this is one market any investor would be wise to invest in. To start looking for Columbus investment properties, click here to use Mashvisor’s 14-day free trial!