Ohio Market Update | Cincinnati | Dayton | Real Estate | REIal Talk | EP. 59

Hi, guys, it's Lauren with the marketing team here at Freedom Real Estate Group. Welcome back to our podcast, Real Talk for Real Estate Investors. This is episode 59. I'm here with Mark again, our director of investments. Welcome back.

Thank you, ma'.

Am. And we're going to dive deeper into the discussion we had previously about market updates. So is there anything you want to talk about before we get started?

No, again, I'm sure we'll cover most things talking about the market and what's changes we've seen here over the last couple of months over the last couple of years. I'm going to dive into some examples of some of the different properties that we've had that investors have had sold back in 2020 and just take a look at where they're at price wise now, just so you can kind of compare the markets a little bit as well.

Cool. Sounds good. Thank you.

Sure.

Thank you. We'll go on the questions now. What is the current state of the market, current size and state?

Well, I mean, so as we start expanding as a company, obviously we're doing more in Cincinnati than we have in the last couple years, so, which is really exciting. I mean, Cincinnati is a great market. You know, home prices are great still there in Cincinnati, of course, here in Dayton, and then our middle market, which is Franklin a Middletown. And so again, the markets look really great as we're expanding into those markets. It's allowing us to grow and touch more neighborhoods and things like that for our investors. So again, when we're taking a look at some of those numbers and our growth projections and what our investors are getting back, we send out some information to our new clients about, you know, the Cincinnati market, the Dayton market, and then the Franklin Middletown market. And all three markets, you know, have a little bit of uniqueness to them as far as their price points. But in general, the market is, is very hot. You know, the values of the homes are increasing, rents are increasing. You'll. You'll probably see that throughout the nation that that's happening. So it's definitely happening here as well. But again, we'll try to take a deeper dive into all three of those different kind of markets and see what are the unique characteristics about that.

Great. Great. Yeah, definitely Cincinnati and Dayton are great markets. Every article I've looked up talking about real estate markets in the United States that are great, Cincinnati always comes up. Dayton always comes up as well. So Ohio essentially is a really great market to be in.

Yeah, absolutely. I'm sure that you can get on and just Google the growth of the two cities. And I remember, I think in one of the other vlogs that Chris and I had done, we were talking about that if Dayton and Cincinnati, they're shared by a couple different highways, 71, 75, as they start to merge in on each other, that this will become a large metro. The size, I believe it's the top 20 in the nation. So right behind, like, San Diego.

Absolutely.

For the size of it. And so that's, that's the growth of the cities. You know, I know that we send out information as well about, like, what's all coming to Dayton, you know, what's all coming to Cincinnati. And so there's, there's a lot of exciting stuff that's coming. I mean, Ohio is a, is a great market in general, but this particular area of Ohio, very affordable, so very attractive for businesses. And so that's why the rental market is on the surge.

Oh, yeah. Constantly growing. Absolutely, absolutely. What do you see in the current trends? Current market trends right now?

Well, we had touched on it a little bit on one of our earlier recordings when we were talking about, you know, market rates. And so a lot of it right now is on the lenders. You know, it's on the lenders and big banks. And so everybody's trying to watch the stock market and see what's happening with inflation. And, you know, is the Fed going to raise the rates and continue to tick up those mortgage interest? And so those are things that everybody's keeping their eye on. In fact, I had actually talked to a couple lenders yesterday just trying to get a feel for, you know, what's happening and what's going on. And, you know, they were all saying, you know, as soon as you get your rate, lock it in, because you don't, you don't know what's going to happen in 30 days, 60 days, 90 days. So if you see, if you see a good rate, you know, make sure you take advantage of that.

Yeah, absolutely. Absolutely. What does the current employment rate around here look like in Dayton, Cincinnati, the middle area?

Yeah, I mean, there's jobs almost everywhere. So again, it's, it's, you know, whether you want to take those jobs or not. But again, a lot of jobs are coming to Dayton. So whether it's large manufacturing, whether it's the school systems, the hospital systems here in Dayton, they're all hiring. I believe that there's new Amazon plants that are coming here right outside of Dayton, just south of Dayton. So the Franklin Middletown. Yeah, absolutely. In fact, God, what did I read the other day, isn't there some sort of thing coming with, like, movie studios or something like that?

Yeah, there's coming to Cincinnati. Coming to Cincinnati or making Dayton their main. Main quarters.

Yeah, right, Absolutely. So walk around, get starstruck. But, yeah, So, I mean, just lots there. I mean, if you've ever been, you know, over the last 10 years and gone to downtown Dayton, downtown Cincinnati, you've just kind of seen the growth of business, that now that we're kind of past Covid. I mean, I don't want to make an official prediction. You know, now that we're kind of easing out of the restrictions and things like that, the businesses are opening back up. There's restaurants. I mean, there's just entertainment downtown. I mean, it's just a really cool place to be. And we do a lot of our shopping, you know, so our acquisitions teams do a lot of shopping, like, close to downtown. And so, yeah, so the market, it's just, you know, I mean, it's just popping. It's just popping. There's just so much going on. We're trying our best, obviously, to keep up and make things manageable. One of the other things I know that we've touched about in one of our markets is that it is a 1%, you know, and so we've. We've said that if you're buying a house for $150,000, that we're going to get that rent of 1500 or very close. Very close. And so this time of year, again, it's kind of hard as well, because I know that rents are going up, especially as it may even become harder to purchase a home, those rents are going to start ticking up. And we were talking about this. And we were talking about this. That, you know, as home prices are going up, rents weren't going up as fast because the market was so much ahead of the rental market. But now it's almost like you can see that rental market slowly starting to catch up. And so, you know, I know that I had talked to property management about that. And so, yeah, right now it's a really good time to get into investing, especially with the volatility of the stock market. Yeah, I just. I know. There's just so many things I could talk about with the market. And of course, you know, I always say, you know, talk to your cpa, talk to your financial planner. But, you know, real estate right now, it seems like it's. It's not overly dangerous.

Right, right.

You know what I mean? Like, for me, personally, I'd rather take my chances on the equity of a property growing and that rental market versus what's happening, you know, in the global economy.

Yep. It's a very safe industry.

Absolutely. Absolutely.

Yep. How does the current market correlate with turnkey and investors? I guess, like, how does it affect them directly? How does it relate to them?

Yeah, I mean, I guess we were just kind of talking about it a little bit. Is that, you know, with the market, you know, a lot of people may be starting to even withdraw funds from their 401k. They may even be like pulling from other sources, trying to get into a market like Cincinnati and Dayton where it's still affordable and it's safe. I know that earlier I was going to pull some numbers on properties that we had that investors just two years ago. So I got a couple here for us. So there was one in Middletown which was a duplex that we had sold. It was a C class, great, great, great area, great duplex. You know, a lot of people were buying in that area and driving the home price. Particular one is going to be sold at $120,000 on a resale to an investor again, because those rents have gone up and then the property's gone up. So I mean, that's a 10% jump in two years, right? Yeah. I mean, and so I don't know how many people, you know, in their 401k are actually making a 10% over the last two years. So it's things like that or. We had this B class in Dayton. It's a single family home, three bedroom, one bathroom. It was a larger home, so it was a nice. But again, we sold this for 125,000 back in 2020. And you know, when we ran the comps for the investor, this one would sell for probably around 155. So that's a $30,000 over those two years. That's a 24% increase in that B class neighborhood. A C class in Dayton, single family home, same thing, three bedroom. You know, I mean, this was a little bit smaller, but this was an $85,000 and it's going to sell for $100,000. So again, you're looking at an 18% jump.

Yeah.

And then finally in Cincinnati, same thing. I tried to do another single family home, three bedroom, one bath. You know, again, we had just started getting into those neighborhoods. So this one goes back to late 2020 and if we had to run the comps on it again was for 144, this one would probably go for 165. So, yeah, again, like in a year, just to make that $20,000 on. On those values of the home. I mean, so you can just see that the market, you know, whether it's a B class, whether it's a C class, it's just the home values are going up, rental values are going up. So for our investors, Dayton, Cincinnati is just a great place.

Yeah, absolutely. Especially in these areas. All of them. Yep, for sure. So based on your professional opinion, where do you see the market going from here? I know we touched a little bit about this in the vlog, if you want to reiterate more. Expand on that. More.

Yeah, I know that, you know, we kind of touched on, you know, that you don't have the crystal ball and that it would be hard to see exactly into the future if anyone could do that, obviously.

Yeah, yeah.

Grab a hold of that person.

We all would.

You know, it's. It's kind of like what we see is that in the Cincinnati and Dayton market, when we've had the real estate lull before, it's came and we've come out of it successfully. And so, you know, no matter what happens in the market, I think you've seen that in time, strong markets like Cincinnati and Dayton will recover. So home values can't continue to keep rising and rising and rising maybe as quickly as they are. And then again, you know, with interest rates and things that may start to slow that market down or purchasing power or things like that that may affect the ability to buy. It'll slow down for sure. It'll slow down, and the increase in the values will slow down as well. But that may, you know, allow the rental market to become even stronger. You know, as that purchase power becomes less. People may want to just rent because. Well, again, in fact, I think I was talking. Who was I talking to yesterday? I was talking to somebody in the office who is renting because they were like, why don't want to buy? You know, at these rates? And so they're like, well, I'll just rent for another year or two or something like that. So, yeah, just. Just somebody that obviously even works here is just watch, watch.

I'm in the situation to rent right now, so right now it's a great time for investors because. Right. Housing prices are expensive, so renting is just the best option for a lot of people right now.

Now, let me ask you, did you lock in on any sort of rental agreement or did have your rates gone up?

Yes, they will be going up once our lease is up. Thankfully, it's about 5%, which is normal.

Okay.

So. But yes, they are going to continue going up. I got a really great, great price on my apartment. But, you know, as my landlord's trying to keep up with all the rent that's going on, the increase, he's increasing slowly, thankfully, our rent. But yeah, it's a great time for investors because rents are increasing a lot.

Yeah, absolutely. And I mean, I know that I had even spoken to Chris, the property manager about like, you know, how do you manage that? Because I'm sure that the investors, they want as much cash flow as they can. Of course, it's humanly possible. It's why you got in the business. Right. But, you know, some things to consider would be to, you know, not get. And so, like, this is a perfect example of what you. Of what your landlord's doing with you is to not get crazy with, you know, because, gosh, I mean, what if they raised it like 15, 20%, you know, then you'd be like, well, I gotta go somewhere else.

Exactly.

So it's like, so you gotta be careful not to raise it too fast because, you know, you can't.

You're gonna lose your tenants.

Correct.

Yep.

So they can't, like, over capitalize on any situations like that. So if in the future that does happen. For any investors who are listening to this, just be careful not to, you know, try to. Try to, you know, exploit that or get out of control with that, because that may bite you in the butt.

Yeah, it's definitely smart to look at the area around as well. So, like, I'm down in Miamisburg. The rents are. The rents are very friendly there. Investor friendly as well as tenant friendly. It's a good balance there. So looking at the rents around that, because then tenants will choose your area and you can slowly increase the rents as inflation goes up as everything else and prices go up. So. Yeah, for sure.

No, absolutely. I mean, and that's a great market. And I know that you were so miamisburg, for our investors that are watching that, that's right outside the Dayton metro. So it's a little bit on the southwest side of Dayton. Great market. Great.

Family friendly, especially.

Yeah, absolutely. I mean, I would say the majority of those neighborhoods there are probably B class neighborhoods. So.

Yep.

You know, if we can definitely find some stuff in that, believe me, that would be a good one for the investors.

Yeah, it's a good area with great rents, great prices.

Absolutely.

Yeah.

A good school district. So. Yeah. And so, you know, I know that earlier I had touched on you know, trying to see if I could explain the difference between like say the Dayton market, the Franklin, Middletown and the Cincinnati market. So it's almost like, you know, the Cincinnati market may be a little bit more expensive than Dayton because again, it's near the larger city. You know, again, it has a lot of job pooling for there. And so, so Cincinnati is going to be slightly more expensive and then Dayton would probably be then the next expensive and then Franklin, Middletown. So again, these are the way that they're priced. Now the way that the rents go is that the rents will be higher in Cincinnati because again, you know, there's more demand for that market. And so the rents follow that as well. Then Dayton, then Middletown. Then it's the same thing with the taxes. You know, being near a larger city, Cincinnati is going to have higher taxes than Dayton, than Franklin Middletown. And so, you know, when I tried to talk to investors on the call and explain the differences between the three cities, you know, something in Franklin, Middletown may be the easiest for new investors to get into because it's not as expensive. The cash flow might be good right up front because of the low taxes. You might get that. But you know, just when we were going over our examples right here, you know, that Middletown, Franklin, even though it was a good, you know, 10% rise, it wasn't anything like the 18 or 24% in Cincinnati and Dayton. So in Cincinnati and Dayton, you, you may see your home value go up a little bit more, but you will be paying a little bit higher in taxes. It'll probably cost you a little bit more out front. And so those are the kind of the differences between the markets as far as just the numbers like that. Of course we can jump into a little bit more of like the markets and the different kinds of hiring and what's the breakdown of those cities. But just as a mile high, Cincinnati, Dayton, Franklin, Middletown, and I would probably put Miami spur just like in that Dayton metro as well. So any of the surrounding cities that are near that. But I mean, what are your thoughts? I mean, is that, does that sum that up?

Yeah, I'd say so. Yeah, for sure. I feel like, I feel like miamisburg rents and prices, maybe just the neighborhood I'm in, it's very close to Franklin, that sort. And Middletown, those rent prices maybe because of the actual neighborhood I'm in. But the rest of miami'sburg is very family friendly. That's why the prices are very good there.

Yeah.

Friendly on both sides. Yeah.

Yeah. I would say like, as you know, there, there Are other companies out there that are doing this, you know, here in our own cities of Cincinnati and Dayton. And, you know, obviously we welcome that because that helps our investors out. You know, together we're all out there transforming these neighborhoods, you know, buying.

Absolutely.

Buying these homes, fixing them up, you know, given a great place for people to. To rent. So.

The transformation of the neighborhoods, that's incredible. Especially in Dayton, there are a lot of vacant houses. But that gives us a lot of opportunity to better those neighborhoods and make the day, help make the Dayton area and Cincinnati area better areas for other people to come in, jobs to come in, employment to go up, good tenants to come in.

I mean, I'm sure that you've even seen it like on, you know, the last year of marketing that, you know, there have been neighborhoods that we've been targeting that, you know, maybe that first buy we bought there was like, I don't know, you know, we're the first ones to that market. But, you know, as we've bought, you know, a dozen or 20 properties in those particular neighborhoods, we're so more confident with those after renovation values. They're so much higher. The rents there are higher. And so those. Those people that originally bought in those markets are seeing those dividends. And so when you asked about the future, I would say that maybe that's a point to consider as well, is that as we and others continue to shop in these neighborhoods and bring the value of those homes up, it can only get better.

Exactly. Yep. Yep. That's a really good point.

Yeah. So, I mean, so market snapshot.

Hot, tight.

It's a hot market. Things are flying off the shelf. Inventory. You know, again, everybody always asks, like, how's the inventory? We're getting plenty of properties, for sure. Yeah. I mean, there's plenty of properties out there. There's lots. You know, cost of goods maybe have gone up a little bit. But, you know, it's. Everything, I guess, is. Is, you know, coming together for that final purchase. And yeah, it's interesting.

Even on the market, it does go up and down, for sure. There's lulls. There's. There's very active and hot times, and there's more slower times. But it does adjust itself.

Yeah, absolutely. I mean, have you seen anything else that maybe I'm forgetting market wise?

No, but I've definitely noticed that being here the year and a half, so that I've been here, I've definitely noticed that it's been a while. But yeah, the. Definitely the up and down, I've noticed there's slow months, so that there's really hot months a lot of the time. So. But it does adjust itself and it's always a very safe market to be in.

Yeah, absolutely. And I mean, again, I want to caveat by saying that that like every time that you purchase real estate, it's not a home run every single time. I mean, again, I just randomly pulled some of these houses, but for the most part, Dayton, Cincinnati, the metros in between. Safe.

Yeah, absolutely.

Very, very safe.

Yeah.

Good growth potential.

Yeah, yeah, for sure. Well, thank you so much for sharing today. Is there anything else that you want to talk about?

No, I think that should get everybody a great idea of the way that the market looks and how things are projecting. So of course, we obviously welcome any questions. Please email us, give us a call and we can definitely maybe point more specifics.

Yeah, I feel like that was a very good overview picture of what's going on in the market right now. This was the diver deep. Sorry, deeper dive into what we talked about in the vlog about just the market updates. And make sure to subscribe to all of our channels. And thank you for watching. Check us out on all major streaming platforms. And we like to end these with invest smart and live happy. Bye, guys. Thanks.

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