The Rivalry: Cleveland EAST VS WEST

[James Wise]

If you talk to a local you would know that Cleveland is very much a city divided. Us west siders don't go east and those east siders don't go west. It is just a fact of life, and for those of us who live and grew up here we couldn't imagine it any other way.

As the owner of The Holton-Wise Property Group I interact with both Clevelanders and investors from around the country on a daily basis. As a matter of fact, I interact with out of state investors so much that a little over a year ago I created The Ultimate Guide to Grading Cleveland Neighborhoods.

With almost 14,000 views as of the writing of this post i'd say The Ultimate Guide to Grading Cleveland Neighborhoods is a pretty popular article.

Do you know what one of the most common questions I receive from out of state investors is?

What about the East Side? 

They ask me that because I left it out. Yup, thats right, the owner of the largest turnkey-esq providers on BiggerPockets just left off half of the greater Cleveland area. That is A LOT of investment properties to simply write off! 

Take a look at the map below there several popular Cleveland area suburbs you will not see.

• Euclid? Nope.
• South Euclid? Negative.
• Cleveland Heights? Notta.
• Shaker Heights? No way.
• Mayfield? Absolutely not.
• Willoughby? Are you kidding me?
• Eastlake? JUST STOP!

Locals get it. We totally understand. If a guy from Shaker Heights created The Ultimate Guide to Grading Cleveland Neighborhoods you can bet that you wouldn't see Parma, Brooklyn or Lakewood.

This is just how it is. Almost like instinct I grew up on the west side and I absolutly hate the east side. Everything about it drives me nuts. I feel the same way about driving to the east side as a 4th grader feels about being driven to the dentist.

For those of you who are on the outside looking in and simply don't get it please check out this article written by Billy Hallal it will really open up your eyes into the psyche of us Cleveland natives and our strange divide. 

(After you read the article please check back and answer the 7 questions below)

WHAT'S REALLY BEHIND THE EAST & WEST SIDE RIVALRY

Question 1: Do you live in Cleveland? If yes, East or West?

Question 2: Did you grow up here or were you a transplant?

Question 3: Did Billy's article accurately describe the East & West divide?

Question 4: Do you invest on the East or West, or both and why?

Question 5: Are your properties on the East or West, or both and why?

Question 6: Do you use a property manager? Will your property manager take on the East and West?

Question 7: How many properties do you have? Do you want more and will you ever change sides?

[Bob Collett]

I am a property manager with properties under management in Euclid, South Euclid, Cleveland Heights, Shaker Heights, Maple Heights, Garfield Heights, Lakewood, Parma, and the west side of Cleveland; so I can speak with a good deal of experience.

I grew up on the west side in the West Park - Puritas area, so I know it like the back of my hand. I tend to agree with those that say east and west does not mix very well in Cleveland... except in sports. I frequently meet a Clevelander when travelling around the country. I can ask just one question and have a pretty good idea of who and what they are... "what high school did you go to?" 

Its difficult to figure. The east side has the museums and the culture and the curved boulevard's and the Shaker transit... and the wealthy... and the gross poverty in the slums.  The west side has the traditional ethnic working class neighborhoods with no wealthy neighborhoods and fewer slums. The roads are laid out in a rigid grid. It makes east siders crazy. Of course many of these generalities have broken down over the last few decades.

From a property management perspective, you are definitely going to have more problems on the east side where most communities require rental permits, vacancy permits, and inspections. Collecting rents is more of a challenge on the east side, unless you get into the ultra high property value suburbs. Property damage and vandalism is more prevalent, crime is higher, and many people who live there want to move out. They have seen their property values plummet and feel they cannot afford to move. Maple Heights for example has as many as 70% rental properties. It also has many vacant properties... just drive through these neighborhoods in late spring and take note of all of the front lawns that have not been cut.

I have heard realtors say they will never again take a listing in Euclid no matter how much you pay them. The city can be that difficult.

Many of the communities on the east side seem like they are trying to rebuild their communities on the backs of real estate investors. Cash flows as a percentage of property acquisition costs can be much greater on the east side, but there tends to be a lot of deferred maintenance expense. The city halls run a cash grab demanding that investors maintain their properties to a higher standard. They often require contractors to be registered in that specific city in order to do any work... of course big fees to get registered. Some of these east side communities use 3rd party companies to do rental inspections. If they don't find any problems, they don't get to come back and charge for a re-inspection.

Good luck, and no matter where you invest, be sure to pay close attention to deferred maintenance costs, and also make sure you property calculate your monthly reserve fund requirements.  This is not as easy as it sounds... and very few investors take this into consideration. (example, what is the monthly reserve for a $4000 roof that is 10 years old and has an expected life of 10 more years?) A property reserve study would do this calculation for each and every capital improvement.