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Updated almost 5 years ago on . Most recent reply

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89
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Guy Azta
  • Investor
  • Los Angeles, CA
73
Votes |
89
Posts

Cincinnati - is rent rising and why?

Guy Azta
  • Investor
  • Los Angeles, CA
Posted

Hi BP,

So I've owned a 12-unit in Cincinnati (Evanston) for a little over 2 years. Most units are studios (efficiencies). I'm out of state. 

It seems as if the rent has been going up. I remember when buying the building, there were many units avail in the under $400/mo range, but now it seems like most are around $500/mo and higher. I'm just curious to get other people take on this and see if I'm reading this right, or whether it's just a seasonal thing or something else. If there is an increase indeed, is it mostly due to better local economy or higher costs of multifamily acquisitions and operations?

Thanks 

Most Popular Reply

User Stats

212
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110
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Ryan Scott Isacksen
  • Property Manager
  • Castro Valley, CA
110
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212
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Ryan Scott Isacksen
  • Property Manager
  • Castro Valley, CA
Replied

I invest in Dayton and had done a lot of market research before diving in.  I am not so well versed in the details about Cincinnati, but will share what I have seen in the market.

Reasoning for the rent increase:

Jobs have been coming to the area for a bit and rent rates lag behind jobs.
Cincinnati and Dayton are tied together a bit and growing towards each other.  Cincinnati relies on pulling work force from outside the city.  

There has been companies relocating to the area with enough growth that Cincinnati and Dayton were considering a bid together when Amazon was looking for new headquarters.  

The effects of the recession dragged on longer in these markets, with staggering foreclosures in Dayton through about 2015.  2016 was when people started first flipping houses in Dayton, not sure of Cincinnati, but with about an hour or so between the two, I can't imagine a huge difference in the landscape.

I have seen a lot of developments popping up between Dayton and Cincinnati as the area revitalizes. 

Most existing stock sells below replacement value, so unit supply will be constrained to existing buildings.

I wouldn't count on too much more noticeable growth.  The numbers on the milken report (ranks cities based on jobs primarily) showed some decline in Cincinnati.  Dayton had decline in 2017 and a little growth that brought it back to the 2016 ranking.

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