Ohio or Vegas??

Question

Hello BP Community!

I plan to sell my Vegas condo and it looks like I'll be able to make about a 35-40K return. I plan to do a 1031 into a new investment property. I have been seeing a lot of talk about Ohio (Columbus, Cincinnati, Cleveland), so I wanted to reach out for some advice. Should I invest into Ohio, or stick with Vegas?

My goal is buy/hold. My priority is appreciation so I plan to hold the property for at least 3-5 years. Would love cash flow, of course, but if I could at least break even on a highly appreciating property, I'd be happy with that.

Would greatly appreciate advice from all of you BP experts!

James Wise · Answer

If you're looking for appreciation you should stay in Vegas. If you are looking to buy more property for your dollar, come to Ohio. If you end up in Ohio and you end up in Cleveland you'll want to read The Ultimate Guide to Grading Cleveland Neighborhoods. A lot of properties in Cleveland are so cheap compared to Vegas that you'll think every deal is amazing. This isn't the case and the guide will help explain why.

Zeke Liston · Answer

If you live in Vegas and can self-manage the property, I'd likely recommend sticking to the market you know and have succeeded in. I hold a decent-sized portfolio in Columbus and Cleveland and have seen higher appreciation in my Columbus portfolio. However, the cash flow is a bit higher with my Cleveland properties. I'm not as familiar with Cincinnati, but I have seen many headlines about the city's growth.

Bradley Buxton · Answer

@Amos Lee

There are advantages to investing in an area you already know. You likely have connections and can get references. You can also check on the properties more often. NV is a landlord friendly state with no state income tax and the 4th lowest property taxes in the US. Unless there is some huge upside to investing in OH staying in NV seems to make the most sense.

Bill B. · Answer

I’m not a betting man. But I bet if you buy a property in OH and only hold it for 3 years. You’ll be lucky to break even after selling costs. So you better find something that cash flows or you’d be better off putting the money in a bank CD.

You’d need 20-25% appreciation just to break even with the bank after selling costs. That’s assuming you don’t lose money to vacancy, capex, etc etc. At least I assume you are an expert on OH so you’ll do better than the people who are already investing there. Good luck.

Ps. Don’t forget to pay your state of OH income tax, even on the formerly tax free money you are transferring out of NV in to a state with income tax. :-).

Travis Timmons · Answer

Vegas has the best long term returns, and it likely won't be close.

Also, the fees plus being a forced buyer with a deadline on a 1031 exchange may negate the small tax savings. I'd rather pay the tax bill and be more selective and patient in buying. If you're tax bill is $6-8k (minus the 1031 fees), surely you can make that up by taking multiple swings over a longer period of time.

OR pursue some sort of owner occupied strategy with that cash if you can swing a live in flip or house hack. I understand that not everyone wants to do that, though.

Account Closed · Answer

Hi, welcome I agree with you Ohio is a good place to invest in real estate. People from all over the world are investing in Ohio's real estate market. If you have any questions, please do not hesitate to reach out. Best Wishes!

Sam McCormack · Answer

Agree with @James Wise

Jimmy Lieu · Answer

Hi Amos! I'm an investor here in Columbus OH myself and have seen the city's solid and steady growth with strong economic fundamentals driving the market like major companies moving here (Meta, Intel, Google, Amazon, etc), job growth, and population growth. That's why there's a lot of appreciation potential here and cashflow. Happy to connect and answer any other questions you may have.

Ohio or Vegas??

Most Popular Reply