It was also recently announced as the GOP’s headquarter base for the 2016 presidential elections – a move that’s set to bring a one-time revenue increase of $250 million to the city. In even bigger news, the return of basketball star LeBron James is set to infuse $500 million into the city for every year he plays there.
That’s good news for Cleveland residents, and better news for investors looking to the Midwestern city for cash-flow opportunities.
“[Cleveland] has the number one price-to-rent ratio in the whole country,” says Davor Rom, investor and president of Investor Income Properties. “Essentially the market rents versus investment dollars are higher than anywhere in the country, which is why we’re doing business [there].”
Trulia also named Cleveland and its suburb Akron as the top two undervalued U.S. cities. The online residential real estate site said the cities are each undervalued by 21 per cent.
“It’s been approximately a year since prices began trending upward,” Rom says. “The markets are a lot different because the larger buyers are unable to meet their quotas and are turning to cash-flow markets, like Cleveland.
“It’s created a lot more buyers and now inventories are decreasing at a more rapid pace.”
Rom, whose company provides turnkey rental properties in Cleveland, says investments can see returns between 12 and 20 per cent, depending on the type of property and its location.
Still, despite the seemingly quick money to be had in Cleveland, Rom cautions potential buyers. “Buying a property based solely on high ROI is dangerous,” he reminds investors. “The first rule of real estate should hold true: location.”
This article originally appeared in the October/November 2014 issue of CREW.
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Cleveland is hardly an up-and-coming neighbourhood. The city is home to the Rock N Roll Hall of Fame and the corporate headquarters of the Cleveland Clinic, one of the largest private medical centres in the world.