Cleveland Real Estate Market

It’s been a while since I’ve written and I miss writing. I’m thinking of doing a series where I break down the top 100 metros based on how they are from an investing perspective. (No order whatsoever)

I've spent considerable time in Cleveland (not just for their legendary Polish boy sandwiches), and let me tell you - this market is seriously underrated. While everyone's chasing deals in Austin and Nashville, smart money is quietly making moves in the Land.

Let me break this down for you, and I'll tell you why I personally own property here and how I navigate programs like the Enhanced Housing Choice Voucher Program (one of my favorite ways to guarantee rent)...

The City at a Glance

Looking at Cleveland from the Terminal Tower observation deck (definitely worth the $5 ticket), you'll see a city that's way more vibrant than national media would have you believe. The $3.5 billion Sherwin-Williams headquarters being built downtown tells you everything you need to know about corporate confidence in the city.

Fun fact: Cleveland was once home to more millionaires per capita than any other city in America. While those days of John D. Rockefeller's Standard Oil are gone, there's still serious money being made here - just in different ways.

What's Really Going On Here

The city's gotten a bad rap over the years (yes, the Cuyahoga River caught fire... in 1969), but here's what most people miss:

• Cost of living is 23% below national average (try finding that in Austin)

• You can buy a whole apartment building for the price of a San Francisco condo (trust me)

• Property taxes that won't make you cry (looking at you, Chicago and Austin)

• The Cleveland Restoration Society's Heritage Home Program offers 2% fixed-rate loans for homes over 50 years old

Why I Bought Here (And Why You Should Too)

The Employment Scene

Cleveland's economy is more diverse than a West Side Market spice stand. Here's what's keeping people employed:

• Cleveland Clinic (their $1.3B expansion plans aren't slowing down)

• University Hospitals (just opened a new proton therapy center)

• Progressive Insurance (constantly expanding their campus)

• NASA Glenn Research Center (yes, we have rocket scientists)

• The growing tech scene at the Global Center for Health Innovation

I love markets with healthcare anchors - people always need doctors, and doctors need places to live. With Cleveland Clinic's expansion into the Opportunity Corridor, we're seeing whole neighborhoods transform.

Special Programs That Make Investors Money

Here's what most out-of-state investors miss:

1. CMHA's Enhanced Voucher Program

   • Guaranteed rent payments

   • Higher than market rates in many cases

   • Annual inspections that help maintain your property

   • Special landlord incentives for first-time Section 8 landlords

2. Cleveland's Paint Program

   • Free exterior paint and supplies

   • Labor grants up to $1,500

   • Perfect for quick property facelifts

3. Down Payment Assistance

   • Up to $20,000 through OHFA

   • Additional $5,000 through the city

   • Great for owner-occupant flips

4. Historic Tax Credits

   • 25% Ohio Historic Preservation Tax Credit

   • Combined with federal credits can cover 45% of renovation costs

   • Particularly valuable in Ohio City and Detroit-Shoreway

The Real Estate Reality Check

Let me share something that blew my mind when I first started investing here: You can still find cash-flowing properties FROM DAY ONE. Try doing that in Miami right now.

Current Numbers That Make Me Happy:

• Median home price: $115,000 (not a typo)

• Average 2BR rent: $1,100 (more with CMHA vouchers)

• Cap rates: 7-12% (my coastal investors are drooling right now)

• Renovation costs: $40-60 per square foot (half of what you'd pay in Chicago)

The Neighborhood Breakdown

Ohio City/Tremont

The West Side Market anchor makes this area special. When Great Lakes Brewing Company expanded their facility here, property values jumped 15% in six months. The new INTRO mixed-use development shows where this market is headed.

University Circle

With the new Cleveland Innovation District bringing $565M in investment, this area is on fire. Case Western's expansion and the Cleveland Clinic's new research facilities are changing the game. Plus, the CIA (Cleveland Institute of Art) students keep things interesting.

Detroit-Shoreway

Gordon Square Arts District is the catalyst here. The $100M stadium renovation project nearby doesn't hurt either. Watch the Battery Park development - it's a bellwether for the whole neighborhood.

Clark-Fulton

The La Villa Hispana project is transforming this neighborhood. With MetroHealth's $1B campus transformation nearby, this is where smart money is moving.

The Real Talk Section

Look, Cleveland isn't without its challenges. Here's what you need to know:

• Winters are real (budget for snow removal)

• Some neighborhoods still need time

• Old housing stock means surprise repairs

• City bureaucracy can be slow

But here's the thing - these challenges are exactly why the returns are so good. If it was easy, everyone would be doing it.

My Personal Strategy Here

1. Focus on workforce housing in emerging neighborhoods

2. Leverage CMHA's voucher program for consistent cash flow

3. Use the Heritage Home Program for renovation financing

4. Stack tax abatements with historic tax credits where possible

5. Partner with local property managers who know the voucher system

6. Target properties near the Opportunity Corridor development

Final Thoughts

Cleveland isn't sexy like Miami or fast-growing like Austin. But you know what it is? Profitable. And at the end of the day, I'd rather have solid cash flow than bragging rights about owning in a "hot" market.

Would I buy here again? Absolutely. In fact, I'm looking at deals right now. The numbers make sense, the barriers to entry are low, and there's still plenty of meat on the bone.

Just remember:

• Do your neighborhood research (seriously, they can vary block by block)

• Have a solid team in place before buying

• Don't skip the property management

• Watch those renovation budgets (these old houses can hide surprises)

P.S. If you're thinking about investing here, start by attending a CMHA landlord briefing. Then hit up the Cleveland Restoration Society. These organizations will teach you more about the local market than any real estate guru ever could.

By the way, if you're serious about Cleveland real estate, mark your calendar for the annual Historic Tax Credit Conference - it's where the big players plan their next moves.

Note: All numbers current as of early 2024. Your mileage may vary, and yes, you should always do your own due diligence.

Enjoyed this deep dive into Cleveland real estate? Subscribe to Property Playbook for more market analyses and investment strategies.

Next week, we're breaking down another hidden gem market you won't want to miss.