Up and Coming Neighborhoods in Cincinnati for Rentals

[Carolyn McBride]

Hi there. I am a first-time investor interested in a small multifamily property in Cincinnati, Ohio. I'm aiming for a $100k-$200k price point, and can see these properties are available, but am not so sure about the neighborhoods or expected renter class associated with these lower-priced properties. I am open to doing light rehab but not complete renovations or large repairs. My husband is originally from Cincinnati, but has not been there in ten years and considers most neighborhoods "the hood". 

For those that are more experienced with the Cincinnati market, what are the up and coming (B/C graded) neighborhoods that have small multifamilies, a strong renter demand, and are likely to see appreciating rents? And I'm also curious are there any neighborhoods that could be especially popular with short-term rentals in the city?

Some neighborhoods with duplexes that seem particularly affordable are below. Are there any neighborhood-specific economic trends I should know about? 

- Price HIll

- Walnut Hills

- Avondale

- St. Bernard

- Norwood

- College Hill

[Evan Polaski]

@Carolyn McBride

Having lived in Cincinnati for about 30 years now, investing in the area, and generally feeling reasonably familiar with it, I would not necessarily call any of those neighborhoods "the hood" but there are certainly areas of each that I would avoid.  

Like many areas of the country, there is still a housing shortage.  The issue you will likely run into in these areas at this price point is quality of property (likely need more than most people would call a light renovation) and ability to push rents.  The $100k-200k property areas tend to also bring lower incomes.  Lower incomes are more susceptible to rent increases.  In College Hill, for instance, your average household income is about $60k.  To keep rents below 30% of gross pay, you are looking at $1500 per month for rent. 

At this income and price point, you are going to be limited at how much rent growth you can get year over year.  And, in my experiences, tenants at the lower end of the income spectrum tend to move more frequently and have more wear and tear on property than higher incomes.  

My couple take aways: talk with several realtors and several property managers.  Talk to those that specialize in those areas and those that don't.  Those that focus on those areas will  likely be trying to bring in your business, so getting feedback from those that don't work those areas could give you a good balance.

And just know, assuming $200k is your TOTAL budget, you are not going to be getting a good property in a good area.  You can get property, but it will either need a lot of work or will be in what your husband calls "the hood".