Investing in West Dayton Ohio and Getting 2%?

[Robert Gibson]

In my brief analysis of the Dayton area single family home market, I don't see any way (short of getting a super screaming deal) of getting much greater than 1% (rent/appraised value) other than in West Dayton area.   From my general analysis, homes in "nicer" suburbs of Dayton just don't get distressed enough to come close to yielding 2% or are valued low enough vs projected rent.

So, my first question is: is my analysis off base here?

Investing in West Dayton would make me nervous given the level of crime and distressed neighborhoods in this part of the city.   However, I fully admit that I don't really know much about West Dayton other  local news crime reports and seeing some pretty sad homes on Zillow, etc.  

Second question: are their parts of West Dayton that are better and safer than others?

[Darrin Carey]

@Christina Carey gave you a great summary. I'll be a little more specific. In areas like Huber Heights I'm finding deals to be in the 1.2%-1.4% range. A recent example is $975 rent for 80k turnkey, (or <70k if you find it and oversee your own rehab.)

In the 1.4%-1.6% range you can get a B property in an older neighborhood pretty easily. I like these as they typically come with little drama and good tenants.

A typical local 1.8%-2% property in a decent C area would be turnkey at $30-35,000 and rent for $600-700. These are my other target area, a little higher return, not much increase in drama.

You can get 2% in decent pockets all over Dayton, without going into the true warzones. You have to be careful though, neighborhoods can and do change. I will selectively pick up properties like this.

You can get 2.5%, 3%, 4% or more in the warzones, but there are significantly higher probabilities for excessive drama and issues, plus additional maintenance and vacancy could eat up that projection really quickly. It has to be disgustingly cheap for me to look at these, and I still may say no. I've turned down free houses at times. (Yes, FREE)

Personally, I tend to avoid areas where a 3 bedroom rents for under 600, that's an indication they're in areas that exceed my drama tolerance. You also run into the problem of Capital Expenses & Maintenance being too high in proportion to the rent.