Pourquoi Cleveland

The Cleveland market has positive home price appreciation forecasts and a healthy supply of affordable homes, with a median resale price that is 46% below the national median. Household and employment growth are steady, and in 2016 the local economy added 9,400 jobs. Median household income is $54,800 and has increased every year since 2012, a trend that is forecasted to continue through 2020.

Another factor that makes Cleveland a good market for single-family rental investors is gross market yield (annualized rent divided by home price). The current average is 12.9%, which is above the weighted average (8.9%) for the top 20 single-family rental markets in the U.S. With median sales prices in the $70,000-$86,000 range and gross rental yields predicted to stay above 12% through 2020, Cleveland offers affordable entry points and attractive returns.

In addition to its strong roots in the manufacturing industry, Cleveland has one of the most diversified economies in the U.S., and we believe this makes it less susceptible to market volatility. The area has also been recognized as a startup incubator5.

When it comes to underlying fundamentals that drive single-family rental returns (job growth, household growth, income growth, and housing supply), Cleveland demonstrates progress on all fronts.

Cleveland Real Estate

Home to more than two million residents, the Cleveland metro area is the 36th largest in the U.S. and the second largest city in the state of Ohio. The market has experienced significant recovery since the recession, with home values increasing more than 19% since 2011. While home values still remain 5% below the prior peak, they are expected to increase an additional 8% by 2019.

Opportunity

  1. Positive forecasted home price appreciation through 2020.

  2. Strong current and forecasted gross rental yields above 12% through 2020.

  3. The expanded Route 8 infrastructure connecting Cleveland to Akron has fueled economic expansion.

  4. Emergence of suburban markets: Cleveland is undergoing a general shift as businesses are lured from downtown to the suburbs.