The general picture of the midwest and this region is that it is on an upward trajectory. Home values were predicted to go up a healthy but moderate 1.9% in 2019 and properties are still commanding strong asking prices well into post-COVID 2020. Dayton is on track to be a wise choice for real estate investment for the next decade.
1. Dayton is under the radar
When most people think of Dayton, Ohio they think of a sleepy midwestern city that has seen better days post Industrial revolution. Don’t let the rust stains fool you, Dayton is on the move. The fact the city is underrated is an advantage to real estate investors. Low attention leads to relatively low investment competition so you can enjoy healthy returns for the foreseeable future.
2. Investment Real Estate is Cheap
It’s no secret that real estate investors are always looking for ways to scale. One of the easiest ways to grow a larger portfolio is simply to purchase inexpensive properties. It is more profitable to purchase ten $30,000 properties than one $300,000 property.
The total equity is the same but your earning potential is unparalleled just by the sheer volume of doors you would have. The median home value in Dayton is just above $68,000 making it incredibly affordable for real estate investors on a tight budget.
3. Dayton’s Growth has been Slow and Boring
As a real estate investor, the hot markets should be a turnoff. High flying cities like New York, Los Angeles, and Boston are fun and exciting but the cash flow is dismal. Dayton’s slow and steady growth means that investors get paid handsomely today and tomorrow.
4. Dayton Has a Strong Rental Market
Over 53% of Dayton area households rent instead of own. That is good news for real estate investors. Couple that with a median rent of about $900 and you have even better news. The area does have lower than average household incomes which means that demand for rental properties on the lower end of the spectrum will remain high as rent prices outpace wage growth.
5. The Dayton Real Estate Market is Balanced
Dayton has a lot of shadow inventory, particularly in up-and-coming neighborhoods. But in the established retail markets financed by banks, properties are still at or around asking price within 60 days. It is not particularly a buyer or seller’s market but both as able to reach their goals easily.
6. Millennials Are Moving Here
Millennials are largely tired of being burdened by student loans and being priced out of major metropolitan areas. Markets like Dayton are seeing their affordable housing market become attractive to Millennials seeking to buy homes from Baby Boomers. The influx of new residents has kept demand relatively high and caused the homes in good condition to be purchased quickly.
7. The Jobs are Local and Not Likely to Move
Dayton’s unemployment rate has kept pace with the national average; the metro area’s unemployment rate typically hovers around 4%. Aerospace and healthcare are two of the biggest employers in the area – neither of which will be moving anytime soon. Local universities and colleges are huge draws to the region that have their own staying power.
8. The State of Ohio is Landlord Friendly
When it comes to landlord-friendly laws Ohio stands out compared to other Midwestern states. Ohio does not have any grace period laws, re-keying law, or pet laws. You are not required to have a rental license to be a landlord and manage your own property and there is not a statutory limit on late fees. The fees simply must be reasonable.
Finally, Ohio’s laws do not limit how much you can charge for a security deposit as long as you only charge for damages beyond normal wear and tear on the property.
9. The Property Taxes are Reasonable in Dayton
Property taxes in Ohio average around 1.6% of the property’s value in annual property taxes. Because home values in Dayton are relatively low already, the annual taxes are very reasonable.
10. Dayton Enjoys a Healthy Influx of New Residents Every Year
Wright State University and the University of Dayton are two of the larger universities in Dayton but there are a number of institutions that attract young new residents on an annual basis. Many students choose to remain in the area after graduation to take advantage of local employment opportunities.
In addition to the University of Dayton’s 10,000+ student footprint, vocational and technical schools like Lincoln College of Technology, Sinclair Community College, and Kettering College of Medical Arts bring thousands more each year.
11. The Air Force Base
The Wright-Patterson Air Force Base is a force for the good of real estate investors in Dayton. The base and associated U.S. Air Force Museum employs more than 20,000 civilians and about another 10,000 military contractors. All this spells a large population of long-term tenants in the area.
Dayton Ohio Real Estate Investment: Summary
Dayton is an attractive market and indeed boasts some of the most lucrative returns in the Midwest. It has quality housing stock, strong prospects for future growth, and stable property values.
Like many midwestern cities, Dayton does suffer from the opioid crisis but has put measures in place to help those hardest hit. Dayton remains an attractive market for investors that seek steady cash flow and stable appreciation. The growing population and low carrying costs make the decision to invest in Dayton attractive and relatively low risk.