Real estate investors seeking good deals might want to look at Ohio.
The Buckeye State boasted three metropolitan areas, including Dayton taking the No. 1 position, on Realtor.com’s ranking of the nation’s top 10 markets for real estate investing.
Dayton garnered top honors for its below-average home prices and strong demand. The city of about 135,000 had a rental vacancy rate of 4.7% early this year. Realtor.com also reports that investor activity has picked up in the past five years, with 13.7% of buyers in the first quarter of 2024 being investors. That is just below the national average.
The list of cities ripe for investment was dominated by Midwest and Northeast communities, including many recovering Rust Belt municipalities.
Other Ohio cities making the list included Cleveland-Elyria in third position and Columbus in 10th place. New York State also garnered three votes, with Rochester placing second, the Albany-Schenectady-Troy metropolitan area ranking sixth and the Buffalo-Cheektowaga area coming in eighth.
Finishing out the list, Pittsburgh ranked fourth; Knoxville, Tennessee, was fifth; New Haven-Milford, Connecticut reached seventh; and the Grand Rapids-Kentwood area in Michigan finished ninth. The top investment spots in the West were Fresno, California, at No. 25; followed by Albuquerque, New Mexico, at 33.
“For buyers interested in investing in rental properties or other real estate, it’s key to know which areas are both affordable and in high demand to be able to capitalize on any investment opportunities, especially with today’s higher prices and rates,” said Danielle Hale, chief economist at Realtor.com. “With low vacancy rates and strong demand, the markets we’ve highlighted as top markets for investment opportunity offer a great mix of affordability and growth potential. These spots give aspiring investors a chance to tap into long-term growth and set themselves up for solid returns as the market shifts.”
Despite evidence that investors are buying fewer single-family homes this year, demand in these 10 cities continues to be strong. Rental vacancy rates averaged just 4.8%, below the national average 6.6%.
Bill Biles is one mortgage loan officer that agrees Ohio is proving to be a strong market for investors. The assistant vice president at Huntington National Bank in Columbus said he is seeing high demand, thanks in part to the Opportunity Zones created during Donald Trump’s administration to attract investment to low-income areas in return for tax incentives. Those programs have combined with state and local incentives to spur investment in Columbus.
“It’s definitely in demand, high demand,” Biles said of housing in Columbus. “I know investors that have gone into these areas and bid for properties above the list price, and they are losing out to larger investors who are coming in and making all-cash bids. The investors are renovating these properties and then either flipping them or renting them out.”
Biles said that a prime example of improvement is the area around the Nationwide Children’s Hospital near downtown Columbus. By offering tax incentives, the area has attracted investors who are refurbishing the neighborhood.
“The programs have helped bring investors into the area who then buy up some of the old real estate, renovate and then resell or rent,” Biles said.
