Dayton economy. Where is it going?

Question

Hello to Dayton, Ohio investors! I'm interested in the Dayton market and trying to understand what's been happening there since the Great Recession. I've read some of the Dayton CAFR and it says the Dayton Region experienced recent employment growth since 2013, until a reversal in the fourth quarter of 2018 through the first quarter of 2019. But the CAFR also suggested that while the regional job numbers had suffered, the city wasn't so affected. It also says there is a lot of business growth happening or expected soon.

It seems like Dayton was hurt by the recession - but the local government and businesses are working hard to turn things around. I'd like to know if Dayton investors are optimistic and seeing things actually turning around. What caused job losses late 2018? How has the real estate market been affected?

Christopher Sineno · Answer

@Gordon Starr

Apologize for the delay in my response... My biggest argument for answering your questions comes from a conversation I had recently with a realtor in the Greater Dayton Area.

To truly understand the change in population, outside of industry shifts in manufacturing demands, I believe the answer lies in changes in actual physical city limits of Columbus vs Dayton. Before I dive in, I do believe that Columbus, Ohio is a wonderful place to invest in RE, but so is Akron, certain divisions of Cleveland, the northern most sections of Cincinnati - It all demands on the tastes and organizational structure of the invester. How diverse the individual wants his/her portfolio to be. Each area has its own Pros & Cons...

But when it comes to Columbus vs Dayton in regard to population flunctuations since 1960:

As of today... Columbus city limits are approx. 223.11 sq mi (217.17 sq mi of land), currently - with the Metropolital Area spanning a whomping 4,000 sq miles. From 1950-2000, Columbus annexed a lot of land from the surrounding areas - now situated firmly in 11 counties, growing almost sevenfold. Larger corporate head quarters and major industry giants hang their hat here. Definitely a respectible position for a Capital City. Dayton is 56.5 sq mi - from defined city limits. What is labeled "Greater Dayton" is 1,715 sq miles - which is less that half compared to Columbus.

During the same period, Dayton took a major economic hit, and the city limits themselves did not see the growth that the Capital did. A large part of this was the employment decline due to the demise of manufacturing giants like NCR, General Motors, and the Mead Paper Company. Over 30,000 jobs, gone, poof. So the city shrunk. In 1960, Dayton hand 160,000 people within city limits. In 2000, Dayton was ranked 147th in its size, from the nationwide census. We are now in the top 60. Less than 20 percent of the population of Mongtomery county live INSIDE Dayton City Limits... taking to the developing suburbs.

What Dayton is doing now is smart... They are building off their past in manufacturing, moving toward industrial tech. They utilized their geographical position (with the intersection of Interestate 70 & 75) to position themselves as a waypoint for logistics and travel, and even started the I-675 auxiliary in late 1987. But with Reynold & Reynolds, Lexus/Nexus, Fuyap Glass America, CareSource, PSA Airlines, and GE Aviation all establishing their HQ here, Dayton is setting itself up for the future. And I am just naming a few companies that are major players in the US National economic market. This doesn't touch the new Amazon warehouse that just opened here as well.

To Recap - Columbus grew in land-mass. Which stimulated growth in all areas.

Dayton stayed the same in land-area (or barely grew) - but has been in a developmental repositioning in recent years. Thus why it continued to be a great place for real estate investing. There was even a recent article posted in Forbes calling Dayton the "Hidden Gem" of REI, specifically turnkey investing.

Christopher Sineno · Answer

@Gary Mendrin

Dayton is an interesting town. Division ally, the municipality seems to be sectioning off areas and marketing them as rebuild zones. Especially after the tornado in May.

Perfect example is the Riverside Dr area... boarded up Multifamily homes all over the place. They are undervalued, need some work, but are great investor opportunities.

We have a very successful turnkey company, of which I help run property management. Rental rates are stable and increasing through these rebuild zones. The City is happy with the market shift as it grows.

Columbus is great, but they are in new builds in the subs, and the market has been stable there for awhile.

Feel free to reach out to me directly. As a real estate professional, I love to discuss market strategy and help connect like-minded individuals to other sources of profit.

Gordon Starr · Answer

The base, beermakers, aerospace, specialty manufacturers, big auto manufacturing, two big universities, distribution hub, hospitals, high tech incubation. Dayton is incredibly diverse, it seems to me.

Gordon Starr · Answer

Many are moving back to in town locations. If you have a fully rehabbed place in town, you will get good tenant applicants. Not everywhere, just the better parts.

@Christopher sineno.  I agree with you as I am in the riverside dr area. For me it was about the great quality smaller sf homes and duplexes. You can do really well with a 1950s quad 4x 1 bed brick buildings that scatter the area.

Roger Smart · Answer

@Christopher Sineno That was a very well crafted answer. I would like to add one additional detail, Dayton has recently added high end housing Downtown, so less units but more cost each, so the market stays strong. As those rental rates move away fromt he new development, they help to drive up the rates of the immediate surrounding homes in a sort of ripple effect. There is a huge chance to pick up great deals that will rent well.

The most attractive thing I find about Dayton is the barrier to entry is so low. Housing costs a lot less, which means you need to bring a lot less to the table to get started. I don't think I would be an investor if I was in another city.

Last note, the Developer for the Water St apartments and condos just bought the Mendelsons warehouse (some 54,000 sqft 8 story monster in the heart of downtown) for $7.3 mil. Really excited to see the plans released for that.

Christopher Sineno · Answer

Absolutely I would love to comment on that.

Since 1960 Dayton has seen a decrease in manufacturing and logistical work, and an increase in summer development including Centerville, Oakwood, Beavercreek, and Kettering.

In recent years, the Dayton area is returning certain manufacturing jobs to the area, so it is Projected then we will see an increase in residency again. But the Dayton area as a whole is a great market for long-term investment with value add potential.

With the addition of the Amazon warehouse and a few other key companies coming to the area. My vote it still Greater Dayton.

I personally love Columbus, most of my family lives there, but as an investor, Dayton in my choice for affordability and growth potential. If I was in a position for top of the market, stable performance properties OR development  - Columbus and the suns (Dublin) - would be my go to.

Salvatore Lentini · Answer

@Christopher Sineno , @Roger Smart , @Remington Lyman , @Gordon Starr - I know this is an old thread but I'm looking for property management for 19 units I have in Dayton.  Recommendations?

Tom Ott · Answer

Dayton is interesting. I would compare it to Toledo. They are small Ohio cities. I do not know what else is there aside from the airforce base. I would suggest looking into more economically diverse cities in Ohio like Cleveland or Cincinnati.

Caleb Burns · Answer

@Remington Lyman car manufactures moved out of the city and the job market was on decline but recently a few have moved back.

Remington Lyman · Answer

@Christopher Sineno That is awesome. I hope those manufacturing jobs work out for Dayton.

What I love about Columbus is the size of it allows you to find every market possible. If you want stable performing properties, then you can buy in the University, city center (Victorian Village, German Village, Schumacher Place), Northeast, or Northwest portion of Columbus. If you want affordability and growth potential you can buy in the Southeast, city center (Sothern Orchards, Old Town East, King Lincoln, etc.), or Southeast.

Dayton economy. Where is it going?

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