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Thinking about investing in Cleveland real estate in 2025? You're on the right track.
Despite economic shifts, Cleveland's property market shows promising stability and growth potential.
In this blog post, we will explore why investing in Cleveland real estate is a wise decision for 2025.
We rely on solid, up-to-date data and statistics from trusted sources to guide our analysis.
By the end, you'll see how we carefully analyze this information to draw our own informed conclusions. Enjoy the read!
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
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1) Cleveland's "price-to-rent ratio" is 12.4, indicating it's relatively low
Signal strength: strong
When considering real estate investment in Cleveland, one key indicator to look at is the price-to-rent ratio, which currently stands at 12.4. This figure is considered low, meaning that the cost of buying a property is relatively affordable compared to the rental income you can earn from it.
In simple terms, a low price-to-rent ratio suggests that buying a home is more financially advantageous than renting one. This is because the potential rental income can cover a significant portion of the mortgage, making it easier to generate positive cash flow.
For investors, this is a promising sign because it indicates a strong potential for return on investment. When the price-to-rent ratio is low, it often means that the market is undervalued, providing an opportunity to buy properties at a good price.
However, if the price-to-rent ratio were to rise above 20, it might suggest that buying is less favorable compared to renting, as the cost of purchasing would outweigh the rental income potential.
Sources: USCensus, Redfin, Zillow
2) Airbnb or "short-term rental" in Cleveland offers a compelling 9.0% profitability, making it an appealing investment
Signal strength: strong
The cash-on-cash return on Airbnb in Cleveland is 9.0%, which is a strong indicator of potential profitability for property investors.
This high return suggests that investors can expect a good income relative to the amount of cash they invest. Cleveland attracts a variety of short-term tenants, including business travelers attending conferences and events at the city's convention centers.
Additionally, tourists visiting attractions like the Rock & Roll Hall of Fame often seek short-term rentals. The city's affordable cost of living and vibrant cultural scene make it appealing for weekend getaways and family visits.
If the cash-on-cash return were to drop below 5.0%, it might indicate a less favorable investment opportunity in the Cleveland market.
Source: Mashvisor
3) Cleveland's long-term rentals offer a highly appealing "cash-on-cash return" of 11.0%
Signal strength: strong
The cash-on-cash return of 11.0% in Cleveland is a strong indicator that investing in property here can yield significant returns.
This percentage is particularly attractive because it suggests that investors can expect a good return on the actual cash they invest, compared to other markets. In Cleveland, the rental market is supported by a steady demand from long-term tenants such as students attending local universities and colleges.
Additionally, the city attracts young professionals and families who are looking for affordable living options with access to urban amenities. These groups often prefer to rent for extended periods, providing consistent rental income for property owners.
If the cash-on-cash return were to drop below 7.0%, it might indicate that the investment potential is less favorable.
Source: Mashvisor
4) Cleveland's homeownership rate is just 39.5%, indicating significant potential for growth
Signal strength: moderate
The fact that homeownership is currently only at 39.5% in Cleveland suggests there is significant potential for growth in the real estate market.
This low percentage indicates that many residents are renting, which could mean a strong demand for housing as more people look to buy homes. Typically, renters in Cleveland are younger professionals or families who are seeking stability and long-term investment opportunities.
On the other hand, homeowners in the area often have more established careers and are looking to build equity over time. This dynamic creates a promising environment for investors, as the transition from renting to owning can drive up property values.
If the homeownership rate were to rise significantly, say to above 60%, it might indicate a saturated market with less room for growth.
Source: NeighborhoodScout
5) Cleveland's "livability score" of 72 indicates a good quality of life
Signal strength: moderate
The livability score of 72 in Cleveland is considered good because it reflects a balance of factors that make the city appealing to residents.
One key aspect is the affordable cost of living, which is significantly lower than many other major cities in the United States. This affordability attracts a diverse population, contributing to a vibrant community. Additionally, Cleveland boasts strong cultural and recreational amenities, such as the renowned Cleveland Museum of Art and the Rock and Roll Hall of Fame, which enhance the quality of life for its residents.
Another important factor is the access to quality healthcare, with institutions like the Cleveland Clinic providing top-notch medical services. These characteristics make Cleveland an attractive place to live, which in turn supports the real estate market. When people find a city livable, they are more likely to settle down, increasing demand for housing.
If the livability score were to drop below 60, it might indicate underlying issues that could deter potential residents and investors, making property investment less appealing.
Source: AreaVibes
6) A local in Cleveland could afford a house in about 2.8 years, which is relatively quick
Signal strength: moderate
In Cleveland, it would take around 2.8 years for a local to buy a house, which is relatively short compared to many other cities. This indicates that the housing market is quite accessible, making it an attractive option for potential investors.
With a median household income of approximately $39,041, residents have a reasonable earning capacity. Coupled with a median home price of about $109,341, the affordability ratio is favorable, suggesting that homes are within reach for many locals.
This affordability can lead to a stable demand for housing, as more people can afford to buy homes. For investors, this means there is a potential for consistent demand and appreciation in property values over time.
However, if the time it took for a local to buy a house were to increase significantly, say to over 5 years, it might indicate a less favorable investment environment.
Source: USCensus
7) Cleveland's infrastructure projects, like the East 79th Street Station upgrade and Superior Cleveland Midway, are set to increase property values by 2026
Signal strength: moderate
Several infrastructure projects in Cleveland, Ohio, are expected to be completed in 2025 or 2026, potentially boosting real estate values in various areas. These projects, such as the East 79th Street Station renovation and the Superior Cleveland Midway, are key drivers of economic growth and community revitalization.
The East 79th Street Blue and Green Line Station Renovation, with a completion date set for September 2026, is located between Opportunity Corridor and Kinsman Road. This project involves enhancing accessibility with new ADA-compliant entrances and access points, new concrete platforms, and covered waiting areas. The $8 million investment from the U.S. Department of Transportation’s All Stations Accessibility Program is expected to increase property values by making the area more accessible and attractive to potential residents and businesses.
Similarly, the Superior Cleveland Midway, slated for completion in fall 2025, is a bike lane development project along Superior Avenue from E. 55th Street to Public Square. This initiative is part of Cleveland’s Separated Bikeway Network and aims to revitalize urban spaces by providing a safe cycling route. The $22.6 million investment in federal funds is anticipated to promote economic growth and create vibrant communities, further boosting property values along the corridor.
These projects are part of broader initiatives to improve infrastructure and connectivity in Cleveland, which can have positive impacts on real estate values and community development.
Sources: Signal Cleveland, Tyler Village, Center for Cleveland
8) Cleveland's median home price is significantly lower, at 75% below the national average
Signal strength: minimal
The fact that Cleveland still has a median home price 75% below the national average suggests that there is significant room for property value appreciation. This makes it an attractive market for investors looking to buy low and potentially sell high.
In Cleveland, the most expensive properties are likely luxury homes located in areas like Shaker Heights, which are known for their historic charm and affluent community. On the other hand, the cheapest properties are often small single-family homes in neighborhoods like Slavic Village, where prices are more accessible but may require renovation.
Investing in Cleveland real estate could be a strategic move, especially if you focus on emerging neighborhoods that are undergoing revitalization. These areas often offer a balance of affordability and growth potential, making them ideal for long-term investment.
If the median home price in Cleveland were to rise to match or exceed the national average, it might indicate that the market is no longer undervalued, potentially reducing the attractiveness of investment opportunities.
Source: Zillow
So, is it a good time to invest in Cleveland real estate in 2025? Absolutely, it is.
Investing in Cleveland real estate in 2025 is a solid option due to several compelling factors.
First, the price-to-rent ratio of 12.4 indicates that buying is more financially advantageous than renting, offering a strong potential for return on investment. Additionally, the cash-on-cash return rates of 9.0% for Airbnb and 11.0% for traditional rentals highlight the profitability of property investments in the area.
Moreover, Cleveland's homeownership rate of 39.5% suggests significant growth potential, while the city's livability score of 72 and affordable housing market make it an attractive place to live. Infrastructure projects like the East 79th Street Station upgrade are set to further increase property values by 2026.
Finally, with a median home price 75% below the national average, Cleveland offers a unique opportunity to buy low and benefit from future appreciation. These factors combined make Cleveland a promising market for real estate investment in 2025.