Why do folks love life in Cincinnati? The architecture, museums, Bengals, community theatre, Reds, chili used as a condiment, Goetta and a booming economy are just a few reasons.
The city isn't just a magnet for new residents; businesses find Cincinnati to be an environment where they can thrive. A big draw for businesses is Cincy's highly-educated workforce (30 percent of Cincinnati's workers hold a bachelor's degree or higher). Because it is home to Kroger, Procter and Gamble, Macy's and six other Fortune 500 companies, NerdWallet named Cincinnati one of the best cities to start a business in Ohio.
Recently, all of Cincinnati's top industry sectors experienced growth and several large corporations have announced plans to expand, which will bring even more jobs to the city. It's safe to say Cincinnati's economic outlook is rosy.
Q2 2015 Cincinnati Rental Market Update
In Q2 2015, Cincinnati was the eighth-best Midwestern housing market to own rental properties in and 40th-best in the country as a whole. Since Q1 2015, Cincinnati fell three spots in the Rental Ranking Report's regional rankings for the Midwest and four spots in the national rankings.
The Cincinnati rental real estate market is admittedly far from perfect. It has an abysmal vacancy rate - 15.20 percent - that is the third worst in the country and 126 percent less than the national average for that metric. Additionally, Cincinnati property values increased by a paltry 3.21 percent year-over-year in Q2 2015, price gains 37 percent less than the national average for that metric during that time period.
Regardless, Cincinnati rental real estate can still be a lucrative investment. Cincinnati rents jumped an impressive 5.83 percent year-over-year in Q2 2015. The local rental capitalization rate, which compares annual rents to property values, is a stellar 8.16 percent - one of the best "cap rates" in the country and about 20 percent greater than the national average. Demand for Cincinnati housing appears to be bolstered by its moderately strong annual job growth rate of 2.20 percent (compared the national average of 2.03 percent). So, while Cincinnati is hardly the most lucrative rental market in the U.S., nor even in the Midwestern U.S., it can still offer good returns for those who choose to invest there - and will likely continue to do so for many quarters to come.
Q1 2015 Cincinnati Rental Market Update
Cincinnati ranked fifth in the Midwest and 36th in the U.S. as a whole in the Q1 2015 Rental Ranking Report for its attractiveness for rental real estate investment. These modest rankings are largely due to Cincinnati's impressive year-over-year median rental price appreciation of 5.25 percent, almost twice the Q1 2015 national average, and its respectable rental capitalization rate of 8.68 percent, which was also significantly larger than the national average.
Cincinnati lags in several of the metrics that were used by the Q1 2015 Rental Ranking Report to evaluate the 75 metros included within it. Its vacancy rate, 10.60 percent, is still depressingly high and is one of the worst in the country. Cincinnati's year-over-year job growth of 1.63 percent, while strong compared to recent quarters, was unimpressive when compared to the national average during that time frame. The median age of Cincinnati's housing inventory, 75 days, is also slightly above the national average. To become a more lucrative market for rental property owners, demand for housing will need to heat up and vacancy rates and the median age of inventory must decline. This should come to pass as Cincinnati's many large corporations continue to expand.
What data is this Rental Ranking Report based on?
To calculate the statistics found in the Q2 2015 Rental Ranking Report, All Property Management gathered data, including the most recent government housing and jobs data, for 75 metros across the United States. Specifically, we looked at home vacancy, capitalization, home value appreciation and job growth rates, changes in rental prices, and the median number of days properties have been on the market to determine which U.S. metros will give investors the highest returns on rental investments. Click here to learn more about the Rental Ranking metrics.
Should I invest in Cincinnati rental property?
As part of the Rust Belt, Cincinnati's economy and housing market have occasionally fallen on hard times in the past several decades. Fortunately, those days appear to be coming to a close. Cincinnati's many Fortune 500 companies are doing well and expanding their workforces, bringing new residents into its metropolitan area - and boosting demand for housing in the process. Cincinnati's impressive Q2 2015 median rental price gains and capitalization rate are proof enough that now is a great time to invest in rental real estate there.
Thinking about renting out a property in Cincinnati? Save time, avoid hassle and maximize your rental income by having a professional property management company operate your rental property for you. Click here to get a free quote from a local property manager or call 877-780-4510 to have the All Property Management staff get quotes for you.
All Property Management specializes in connecting rental property owners with professional property managers in communities across the United States. These property managers help set rental rates, advertise properties, screen and manage tenants, collect rent, manage vendor relationships and ensure compliance with local, state and federal housing regulations. They take the hassle and worry out of managing rental properties - all while maximizing rental property owners' rental incomes.