Toledo, OH

[Shane Miller]

We are new to real estate investing and are considering the Toledo, OH market. Does anyone know about how long it takes to rent in this market? We are looking at properties in the 43612 zip.

[Ryan Pyle]

@Shane Miller

Rents should stay strong in this area. The housing stock is in better shape than the current rental-occupied areas because it is still in transition from owner-occ to renter-occ and therefore has not withstood tenant abuse yet.

I would focus on buying rentals in the Washington Local School district. There is very little rental stock there and very high demand. It is the "step-up" district from Toledo Public schools...not as good as the wealthier suburbs, but better than TPS, and taxes are still relatively low. The biggest thing to watch out for in WLS is flood plains. Don't buy anything that requires flood insurance because it will be very difficult to unload in the future.

You will pay more for houses in WLS...probably could be "all-in" for around $50k. A 3 bedroom will rent for at least $850 with tenant paying water (I bump the rent to $925 and I pay water). The tenant will have a good paying job and wages for you to garnish should they not pay. And you will have actual equity in the property, there will always be rental demand in the area, and it is way less likely to decline in price like 43612 will.

I speak from experience. I own about 40 houses in 43608 and 43605 zip codes. When I originally bought those houses I was selling flips in those areas for over $70k. I was all-in in my rentals for around $30k. I thought I had a ton of cushion. Guess what? As those areas turned from owner-occ to rental-occ prices fell quickly. Now those houses are worth $15k on a good day. Again, the same thing is happening in most of 43612.

With all that said, 43612 is OK in the Elmhurst Elementary school area. That should be OK for a while. But you will pay the same if not more that you would in WLS (because the homes are bigger in the Elmhurst hood) and the rents will be slightly lower and you have more risk of price decline down the road. I just don't see why you'd buy there.

Good luck.