Airbnb or Medium Term Rental Advice in Cleveland Area?

[Daniel Baran]

Hi All - rookie investor in beginning stages of exploring idea of purchasing a STR (i.e. Airbnb) or medium term rental (i.e. a rent by the room type sit. through furnished finder) property in Northeast Ohio. I’m curious if there are others who are doing an airbnb strategy and what sort of success they’ve had? I understand Cleveland is not exactly a “hot” airbnb market but people airbnb everywhere and even with low say 50% occupancy rates in the right places this could still significantly net more than LTRs. Some specific question I have:

• Regulations: Anyone aware of any investor-friendly regulations in regards to STR anywhere in the area? Pretty much everywhere I’ve looked in the area from a first pass that has any regulations outlaws it to investors (including Cle proper). Perhaps a move could be to invest in a suburb where it is not yet regulated and still will cash flow as LTR and worst case convert to medium term/long term rental if regulation is passed.
• Suggested Areas: I am from Cleveland suburbs originally so fairly familiar with general area but curious if there are certain legal areas that people think might do better than others as an airbnb? Specifically looking for markets where I could get 3bed+ under 250, the cheaper the better (while still C, B neighborhoods). Originally was drawn to Brookpark (b/c of proximity to airport and cheap housing/plentiful inventory) and Old Brooklyn (b/c of cheap, plentiful inventory as well and proximity to west side Cleveland neighborhoods like Tremont while still C neighborhood), but does not seem like it will be possible in those areas given regulations.

• Medium Term Rental: An alternative to the Airbnb route would be to do furnished medium term rentals from something like furnished finder as a way of (legally) skirting around STR regulations but still having more attractive cash flow than LTR. Is there any appetite for such medium term rentals in Cleveland area? This is more niche than airbnb and am unsure what sort of demand there would be for this in Cleveland apart from maybe University Circle area where you could rent to visitors in town for Cleveland Clinic/UH and Case around there. Any suggested areas where this maybe could or does work?

[Dave Stokley]

I do it for a living. A lot to unpack here. Message me and we can discuss this week. 

Short answers for the benefit of the forum:

It’s technically illegal in Cleveland proper but they aren’t currently enforcing it. We’ve been in touch with city council and it’s not a priority for them, although I think eventually there will be some regulatory reform. It is legal (or not illegal) and lucrative in many suburbs, but also illegal in many others. I don’t even have a comprehensive list since there are, by my count, 56 municipalities with their own zoning codes in Cuyahoga County alone.

"Still will cash flow as LTR" and "as cheap as possible" are not good criteria for a successful STR property. Commit to the strategy or don't do it. I can find you properties that will return 20% COC at any price point.

Medium term rentals are tough because they don’t generate as much revenue but still cost nearly as much to furnish and operate.

Cheers,

Dave