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Updated over 7 years ago, 07/28/2017
Columbus neighborhoods from REI perspective
I'm a remote multi-family investor. Currently, I have two properties in St Louis, MO. I'm looking for another city for my next investment, currently researching Columbus. I understand that it has:
- strong, diverse economy
- midwest cap rates
- big university
Tonight I'm looking at the MF properties currently listed on LoopNet. How would you classify these neighborhoods in terms of occupancy rates, growth, etc?
Hilltop
University District
German Village
Near East Columbus
Any other areas I should get to know?
Thanks!
Originally posted by @Jacob Marble:
I'm a remote multi-family investor. Currently, I have two properties in St Louis, MO. I'm looking for another city for my next investment, currently researching Columbus. I understand that it has:
- strong, diverse economy
- midwest cap rates
- big university
Tonight I'm looking at the MF properties currently listed on LoopNet. How would you classify these neighborhoods in terms of occupancy rates, growth, etc?
Hilltop
University District
German Village
Near East Columbus
Any other areas I should get to know?
Thanks!
Hi Jacob! University District is strong rentals. Typically you will get the 1% rule around there. Great student housing, there are ranks within the university district depending how far you are from the University rents decrease. German Village is class A. Most expensive real estate in Ohio by price per square foot on average. Very little opportunity for an investor unless you are looking for appreciation only. Think of this like buying a property in california. Near east is great. One of the best areas to invest but you want to buy smart and find distressed. There are a lot of opportunities here. Stay North of Main and south of long for now unless you have experience in C class apartments. We have a 24 unit listed on loopnet north of hilltop (43204) zip code. Overall great rental area but that's about it. Buy smart. You don't see as much appreciation over here. I'd be looking for 2BR units or above here. I'll send you a PM following up on this.
- Robert Ellis
Hilltop - varies street to street. South of Mound, West of Hague, IMO is your best bet on the west side of Columbus. Good price to rent value here IMO, but property tends to be on a case-by-case basis.
University District - Prices are high, and Ohio State, in their infinite money grab, has just banned sophomore students from living outside University housing, which will impact landlords. The highly desirable Short North rental crowd, driven out by high rents, is spilling into the University District, so there may be some opportunity there. But if you're looking at large multi-fam, you may not be able to capture that crowd who would likely prefer singles, doubles, and town homes. I'd tread with caution regarding university property. Ohio State may someday in the near future decide that if you go to school full time and are under the age of 22-24, you must live on university property. Sounds crazy, but after their latest ruling regarding sophomores, I wouldn't put anything past their insatiable greed.
German Village - expensive. Merian and Hungarian Villages may be better, but don't stray too far south. Not sure how much 5+ unit multi-fam you will find in this area.
Near East Columbus - Olde Towne East and Franklin Park area has gotten pretty expensive of late, and the rest of the East side is on a block-by-block basis IMO. There's probably good opportunity here, but you need to know your streets.
Good Luck!
I have to slightly disagree with @William Carroll here regarding Ohio State's sophomore rule.
I do agree Ohio State will continually make efforts to keep students paying them for housing, and of course I agree there's greed involved. However, I don't feel the sophomore rule has affected landlords very much yet. This may change. In my experience working in property management with the largest manager of "student" properties in the area, occupancy remained essentially the same. With over 1,000 units under management, my company saw 2014 and 2015 occupancy of about 94-95% drop to about 93-94% in 2016. I'm not saying there won't be a further effect in the future, just my two cents on the matter!
If you can still achieve 93% occupancy or more AND you've got that added bonus that nearly all student's leases are cosigned by a more financially stable parent or guardian, I think student housing can still be a good niche. The main concern I've seen personally is high maintenance and CapEx.
I certainly agree that one should tread with caution, just wanted to offer a slightly different perspective on the matter.
Oh and one additional comment: There is no way Ohio State could make all full-time students stay in dorms or Ohio-State-owned housing. They've been building brand new dorms non-stop for the past few years, and there are still sophomores who will get around the Sophomore Rule because there isn't an available slot for them in any dorm. Ohio State only has so much room to build dorms, so I don't foresee anyone older than Sophomore age being required to stay in a dorm anytime soon.
I have a Student Housing for sale
Originally posted by @Elliot Adkins:
I have to slightly disagree with @William Carroll here regarding Ohio State's sophomore rule.
I do agree Ohio State will continually make efforts to keep students paying them for housing, and of course I agree there's greed involved. However, I don't feel the sophomore rule has affected landlords very much yet. This may change. In my experience working in property management with the largest manager of "student" properties in the area, occupancy remained essentially the same. With over 1,000 units under management, my company saw 2014 and 2015 occupancy of about 94-95% drop to about 93-94% in 2016. I'm not saying there won't be a further effect in the future, just my two cents on the matter!
If you can still achieve 93% occupancy or more AND you've got that added bonus that nearly all student's leases are cosigned by a more financially stable parent or guardian, I think student housing can still be a good niche. The main concern I've seen personally is high maintenance and CapEx.
I certainly agree that one should tread with caution, just wanted to offer a slightly different perspective on the matter.
I've kept an eye on the University market and it 'seems' like I've seen more property being placed on the market there than recent years... and my 'assumptions' have been that its related to OSU's housing market grab. That said, my 'assumptions' are not hard data, and you probably have better data than I do.
Campus rentals are not my market, but would be interested to learn more as more info comes out. OSU just rolled this out, so not sure if the effects have fully taken hold yet.
Originally posted by @Elliot Adkins:
Oh and one additional comment: There is no way Ohio State could make all full-time students stay in dorms or Ohio-State-owned housing. They've been building brand new dorms non-stop for the past few years, and there are still sophomores who will get around the Sophomore Rule because there isn't an available slot for them in any dorm. Ohio State only has so much room to build dorms, so I don't foresee anyone older than Sophomore age being required to stay in a dorm anytime soon.
Certainly not insinuating that this would happen any time 'soon' (3-5 years).
But once OSU gets a taste of that sweet, sweet housing income, there's nothing that makes me believe they are going to stop where they are. Just look at all the other land grabs, med center expansions, 'professional' sports program expansions, etc., etc. etc. they've executed in the last 2-3 decades. Basically the only thing OSU doesn't invest in anymore is inexpensive education for local kids.... they consciously nixed that mission statement years ago.
I went to Ohio State over 30 years ago and loved the educational services they provided to the locals back then. Hate what they've become... but I'm a grumpy old fart and probably all large university systems act the same way now. It's the local kids who weren't born to wealthy parents who are ultimately suffering the burden of OSU's endless money grab.
Sorry to the original poster... this thread has gone off the rails!!!! :) Sounds like @Elliot Adkins definitely knows his way around the district and could provide you some help if your interested in the university market.
William Carroll I appreciate the friendly words and I do agree with much of your assertion, especially your point about the long-term trend towards Ohio State taking more and more control of the University district. Great university but even greater business entity!