Rental Property in Cleveland, OH (4 Units)

[Bhavik Patel]

Hey guys, I am looking to buy my first rental property within the next year. I've been researching quite a bit the past few months to learn about the different factors involved when evaluating properties. I came across a listing in Cleveland, OH which interests me. Can you please give me any insight on this property? http://www.loopnet.com/Listing/20265820/7102-Grand-Ave-Cleveland-OH/ Thank you in advance! Eager to hear your thoughts! Best, Bhavik

[Oren K.]

Hi Bhavik,

They did not include any maintenance expenses which should be ~ 10%.

Insurance seems high at over $450 per unit

They also assumed 100% occupancy which is unlikely over any reasonable amount of time so cut another 10% of the income. 

Property taxes are based on the current valuation so will go up in due course by the county.

Note that the income works out to ~$450 per unit per month; not exactly a high end rental even if they are all (doesn't even tell you) 1B / 1Ba units.

I do not think the property would perform as the agent is representing and would pass.

A couple of other points to consider;

- Property management: Needs to be fully vetted. You are out of state and managing remotely can be challenging. BP has many people that do this successfully but not for everyone.

- The other thing that struck me was the broker is based in FL (bottom of the Loopnet post and click on the link to all their other listings). Where / how did they get this listing and what do they really know about the property.