Greetings Toledo Investors

[Derrich Phillips]

Hi I am fairly new to investing. My wife and I are strongly considering investing in Toledo. My wife is from Toledo and owns a rental house in the 43615 zip code. She has gotten decent returns renting the house, but is considering selling. Currently, we live in Dallas, so our strategy is to buy and hold in the Dallas-Fort-Worth area, but the more we analyze deals the more attractive the Toledo market becomes. Is the 43615 a good neighborhood for buy and hold? Any insight into the Toledo rental market would be greatly appreciated. Thanks 

[Andrew Fidler]

Hi Derrich,

Buddy 43615 is Holland and that is a HOT area to own in. Definitely a nice area with some nice appreciation over the past few years. 

The only real question to resolve is whether the rental you own is earning what you want and if so you just need ten more like that. 

The basic rule here is: the higher the value of the property the better the tenant class will be and the higher the rent will be...then when you fraction that into actual returns you will find that nicer properties make less profit. 

I own in 43608 in $25k priorities at $700/mo (33.6% annual gross rent to purchase ratio)

43612, $35k properties at $800/mo (27.4% annual gross rent to purchase ratio)

Monclova (43542) $150k property rented at $1100 (8.8% ratio)

And a theoretical $250k house at $1800 mo (8.6% ratio)

The ratio doesn’t really mean anything except gross $$ coming in, you can run the same numbers for profit - lower end properties have lower taxes, maintenance, whatever except there’s that whole tenant quality to factor in so I’m not going to wrack my brain. (My Monclova Property looks like a complete dog on paper except it has appreciation and the same tenants have been there for five years and I never have repairs or vandalism or late rent to worry about...the resulting profit is difficult to ratio)

Conclusion- invest in the highest profit category you are comfortable in...I have a cast-iron constitution so I own in some really great profit areas. You will need to draw your own conclusions and develop your strategy accordingly. 

Hope this helps!