Cleveland, Ohio
A Contradictory Market with Plenty of Potential
by Carole VanSickle Ellis
Although nationwide investor interest in single-family home purchases is declining, the Cleveland, Ohio, market is still heating up. According to Realtor.com, Cleveland rents are startlingly affordable relative to other similarly sized metro areas, and that means increased interest from investors and would-be tenants as national costs of living continue to rise.
In December 2024, Cleveland posted the lowest average rental rates in the Midwest at just $1,184 per month. While this is relatively low, the figure is still within four percentage points of the area’s all-time high, meaning investors hoping to build profitable rental portfolios in the Cleveland area still have a chance to do so.
Investors should note Cleveland residents currently are demonstrating a marked preference for single-family residential living; multifamily absorption rates are falling across the Midwest as more households opt to either rent or buy single-family homes. CoreLogic economist Thomas Malone wrote in a September 2024 blog post that investors in Cleveland and elsewhere should likely “stay in the rental market,” citing unaffordability and higher insurance premiums from climate risk as sources of opportunity.
In the wake of such analyses, Cleveland followed through during the remainder of 2024 and the first half of 2025. In fact, at the end of Q1 2025, ATTOM Data ranked the city third for “the highest potential annual three-bedroom gross rental yields in 2025 among counties with a population of at least 1 million.” However, the analysts warned, Cleveland’s rental rates are currently outpacing wages, although this was not enough to knock the city off ATTOM’s “28 SFR Growth Markets” list for the year.
In Prime Position for Continued Growth
Since its founding, Cleveland’s location on the Cuyahoga River and Lake Eerie has played a key role in the city’s economic stability and growth. Although Cleveland, like much of the Midwest, encountered substantial economic stumbling blocks in the 1960s after being named “the best location in the nation” by local businesses in the years following World War II, today it functions as a center of commerce as well as a nexus for the healthcare industry. Since both of these industry sectors are somewhat insulated from economic downturns, they provide a base rock for the local economy.
“Greater Cleveland is the Medical Capital of the United States with more than 700 biomedical companies and a number of nationally ranked medical research and educational institutions,” boasts the Cuyahoga County Department of Development. At the time of publication, Cleveland’s healthcare sector employed more than 120,000 healthcare professionals and was the largest employer in the county.
The Port of Cleveland also plays an outsized role in stabilizing the entire region economically, generating a roughly $4 billion impact on the local economy according to Port data. According to David Gutheil, interim CEO of the Port of Cleveland, “The Port [capitalization Gutheil’s’] is intentional about participating in the local recreation and tourism economy, serving as a partner on projects that benefit both the Port and region,” such as stabilization of local communities and shoreline enhancements.
Gutheil noted the Port of Cleveland participates in development projects outside of freight and shipping, such as financing a portion of the Sherwin Williams building located nearby, hotel construction, and affordable housing. At present, Gutheil said, the port is involved in a $100 million project to stabilize a hillside on the Cuyahoga River. Once the project is completed, the port will participate in the conversion of the stabilized area into a park.
The Port of Cleveland is also a Great Lakes Cruise Ship destination, which generates about $1.5 million in tourism- and hospitality-related economic impact.
The Port of Cleveland could find federal financial support imperiled in the coming months, however, as the current presidential administration winds down environmental funding for sustainability initiatives. In 2024, the U.S. Environmental Protection Agency (EPA) awarded the port $95 million as part of the largest grant in port history. That $95 million was earmarked for electric cargo handling equipment, zero-emissions vessels, and charging infrastructure.
Those plans are presently “on pause temporarily,” Gutheil said, noting the port has “maintained its status as an economic driver over the years regardless of shifts in policy and other challenges.”
Contradictory Views on the Cleveland Economy
Perhaps the most confusing element of the Cleveland real estate market is the local economy, which seems to befuddle some of the leading experts around the country. While U.S. News and World Report ranks Cleveland as one of the top markets for real estate investing and residence thanks to what it called “undervalued” properties, the Milken Institute recently published a report placing the city near the bottom (185th out of 200) of the “Milken 2025 Best-Performing Cities,” causing Axios Cleveland to warn that the area could be facing an uphill climb when it comes to “attracting new residents, visitors, and investors to a region.”
However, Axios contributors Troy Smith and Alex Fitzpatrick rebutted some elements of the Milken findings along with Greater Cleveland Partnership CEO Baiju Shah. “The report doesn’t explicitly look at other quality-of-life factors people may consider when picking a place to live…that could have improved Cleveland’s ranking,” Smith and Fitzpatrick wrote.
Shah added, “We are at a moment in time where our large and small businesses are thriving. Our biggest issue now is not having enough people living in the region.”
SIDEBAR 1
By the Numbers
2 // Cleveland Clinic was ranked 2nd best hospital in the nation in 2017 (U.S. News & World Report)
10 // Qmed lists Cleveland as one of its “Top 10 Cities in the US for Medical Technology Innovation”
2 // U.S. News & World Report ranked Cleveland the 2nd-most-undervalued housing market in which to buy a home in the country (November 2024)
4 // U.S. News & World Report ranked Cleveland the 4th-most-undervalued rental market in the country in November 2024
22.6% // the rent-to-income ratio in Cleveland (vs. 32% nationally)
8.51% // amount CoreLogic reported Cleveland home prices rose over the course of 2024
1.6% // amount CoreLogic forecasted Cleveland home prices to rise in 2025
SIDEBAR 2
Let the Property Owner Beware
When it comes to owning one (or more) homes in Cleveland, the local market has a few quirks which investors should be aware of before they buy:
Theft of 19 properties from landlords and estates around Cuyahoga County
Starting sometime in the early 2020s, an individual successfully forged quit-claim deeds to rental properties and properties in the estates of deceased individuals in order to sell the homes and pocket the profits. The rightful owners of the homes have struggled to regain possession of the properties, which are inhabited by the defrauded buyers in multiple cases, and so the original owners have title and must pay property taxes but do not have
possession of the property.
A portfolio-wide meltdown affecting 80 Swedish investors, 100 Cleveland-area rental homes, and a fraudulent turnkey operation
Between 2016 and 2019, a Swedish turnkey company operating in Cleveland sold roughly 80 Swedish real estate investors 100 rental properties, promising a 15.8% return on investment and a rock-solid local property manager. Unfortunately, neither the property manager nor the returns ever materialized, and necessary renovations and repairs were left undone. The investors sued; the renters sued, and the turnkey operator folded without admitting liability or leaving any possibility of payout to either injured party.
Skyrocketing property taxes
Property taxes may not be quite as “exotic” as an international con artist scamming both renters and landlords simultaneously, but they represent a much broader threat to Cleveland investors. Cleveland residential property values have risen an average of 49% since 2019, the last time the county conducted its standard sexennial appraisal.
