FEATURE: INVESTING IN REAL ESTATE IN CLEVELAND
FEATURE: INVESTING IN REAL ESTATE IN CLEVELAND
Feature: Investing in Cleveland Real Estate
Real estate investing in Cleveland is an opportunity that international investors are recommending. Generating passive income through real estate is becoming increasingly popular in 2020. What about the Cleveland real estate market? Many questions surround this city. Invest US puts information at the center of everything. We are therefore dedicating a special report to this city. We profile its history, with its rise and decline, with Julien Raynard, CEO of investir.us, who has been based in Cleveland for several years. Julien is a property dealer and brings us his expertise and knowledge of Cleveland real estate in this article.
REAL ESTATE CONSULTATION WITH JULIEN RAYNARD, CLEVELAND EXPERT
The origins of the city
A certain General Moses Cleaveland, American lawyer, politician and military man, was sent by the Western Land Company to find new land to exploit. His expedition team left New York in June 1796. On July 22 of the same year, he landed at the mouth of the Cuyahoga River. There, he discovered a plain composed in particular of a rich and luxuriant forest. A good place to establish a city? It was therefore on the date of July 22, 1796 that the city was founded, the construction employees named the place "Cleaveland" in honor of this leader who led them. The spelling of the name of the city took its final form in 1831, by removing the first "a" to become "Cleveland". This shortened name made it easier to get on the front page of newspapers to promote this new city.
General Moses Cleaveland, French and founder of the city of Cleveland
Cleveland's Prosperous Years as an Industrial City
Cleveland's early development was timid, with only four settlers at the start; in 1820, there were only 150 inhabitants. However, Cleveland quickly developed and took advantage of its many advantages, particularly its geographical ones. Namely, its location on the shores of Lake Erie gave it real opportunities. Indeed, in 1832, the Ohio-Erie Canal was built, and from then on, the small town quickly became a necessary crossing point. The railroad revolution further strengthened Cleveland's appeal. The process of the industrial revolution made Cleveland one of the major cities in the United States, which became the site of numerous steel mill headquarters. In 1920, a certain John Davison Rockefeller made a fortune with Standard Oil. Cleveland, in the USA, became one of the main refining centers and the fifth most populated city in the United States.
In 1936, the city celebrated its 100th anniversary as an incorporated city in the United States. To this end, it held the Great Lakes Exposition on the lakeshore. Its first edition attracted 4 million visitors. The following year, no fewer than 7 million visitors attended. This exposition still survives in some way, as it is on this site that the Great Lakes Science Center, the Rock and Roll Hall of Fame, and the Cleveland Burke Lakefront Airport are located today.
Standard Oil Company in Cleveland
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Cleveland's Demographic and Economic Decline
At the end of World War II, Cleveland experienced a short-lived boom, earning it the title of "best city in the country" awarded by business. In 1949, Cleveland's population reached 914,808. However, by 1960, the decline of heavy industry combined with migration to new suburbs gradually turned Cleveland into a city in decline. Financial difficulties were soon felt. It was particularly under the mandate of Mayor Dennis Kucinich in December 1978 that the city experienced its greatest financial difficulties. Also, the subprime mortgage crisis, which spared no city, hit Cleveland hard, with 70,000 homes seized by banks and other lending institutions for defaulting on loans. As a direct consequence, poverty in Cleveland inevitably increased, with high unemployment.
Redevelopment of Cleveland, a city steeped in history
As we know, history is nothing but a succession of cycles and tends to repeat itself, what history teaches us is that Cleveland has always been able to recover, at the beginning of its construction its development was sluggish, before knowing the historical grandeur. Today and in recent years we see that the city is redeveloping, notably reinforced by real efforts of the city hall, which has worked for the revitalization of the city center and urban renewal. Indeed, numerous real estate projects are underway, as well as the investment of public authorities, in the urban space. Cleveland retains its roots as an industrial land (13.7% of the city's jobs). On this point Cleveland and Detroit (Michigan) are two cities of the "rust belt", in reference to the fact that they are historical lands of industry, particularly automotive. Cleveland has been able to build real assets in various sectors. This is evidenced by the region's deeply integrated economic fabric in globalization, with a dozen Cleveland companies comfortably installed in the Fortune 500 ranking. These include GoodYear, a tire producer with a turnover of $15.5 billion (in 2018), and Sherwin Williams, a producer of building materials, especially paint, which has a turnover of $17.5 billion. It is a combination of conditions that have made Cleveland a true business center today.
"To put it simply, a low price per square foot and a skilled workforce with young graduates starting out in the workforce is a winning combination for these large companies. Along the same lines, major announcements have been made: first, Amazon established warehouses in Cleveland, and today the e-commerce giant employs 3,000 people. This represents very stable jobs for Cleveland. Then comes the historic Ford Motor Company, which announced it is investing $1 billion in two manufacturing plants. This investment includes the integration of a new product line into the assembly plant and upgrades to the engine plant (up to $125 million for the upgrade).
Julien Raynard, Cleveland market expert , INVESTIR.US
CONTACT THE INVESTIR.US TEAM, CLEVELAND SPECIALISTS
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Education in Cleveland, but also culture and art are also real assets, in fact with a large student population (around 50,000), the vitality of the city is assured. In addition, the attractiveness of jobs favored by a high concentration of companies (attracted by a low price per sqft) encourages young university graduates to stay in this city. Let's not forget sports too, with the most national of them being basketball, which directly and indirectly allows for a large creation of wealth.
American media describes Cleveland as the comeback city
REAL ESTATE CONSULTATION FOR INVESTING IN CLEVELAND
Focus on Cleveland Clinic (the city's largest employer)
The Cleveland Clinic is a major player in the city and the world. Indeed, it is the city's largest employer, providing no less than 20% of the city's jobs. Sixty thousand people work at the facility alone, including 11,800 nurses, 3,953 doctors, and researchers in 140 specialties. In 2017, the facility generated revenue of $8.4 billion with no fewer than 7.6 million patient visits. Its local integration extends beyond the economy, as academic programs are established in partnership with the University of Cleveland Medical School, Case Western Reserve. This contributes to renewing this expertise in medicine and health, as Cleveland students receive exceptional training that is internationally competitive.
Indeed, Cleveland Clinic is a major international player, consistently ranked as one of the best hospitals in the world by the US New & World Report. Its cardiology program has been ranked number one in the country since 1995. Cleveland Clinic also has a presence in its Canadian neighbor, Toronto, with a center specializing in sports medicine. Cleveland Clinic has opened a hospital in Abu Dhabi and plans to open a hospital in London in 2021. International expansion is only just beginning.
Fox News World's Best Hospital
Cleveland: A Real Estate Market Full of Opportunities
Following the global crisis, real estate prices have fallen sharply. Looking at the figures and its evolution, we see today that growth has returned, and is only accelerating, which has led to neighborhoods becoming too expensive to buy. Overall, the real estate market has only increased. In August 2011, the median sale price was $25,600, while in February 2020 it was $70,000. We note that since 2017, the evolution of prices has really accelerated, and some neighborhoods are now at prices that exclude any investment strategy. Rents are also following the trend, since a clear evolution can be observed: the median rent in June 2011 was $845 per month, in October 2019 the median rent was $919 per month.
Cleveland is fertile ground for the housing market, with many investment projects, each one more massive than the last. The Beacon: a 108-meter skyscraper completed in 2017 for an investment of $95 million. The Lumen: the largest apartment complex in the city center for an investment of no less than $135 million! Probably completed in spring 2020. Also coming is the nuCLEus project, which includes a hotel, 14,000 square meters of retail and restaurant space, 500 apartments, and also 18,000 square meters of office space .
Julien Raynard, Cleveland market expert , INVESTIR.US
CONTACT JULIEN RAYNARD, CLEVELAND EXPERT
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Real estate offered by Investir.us
If the center is today a market that can be described as "mature", some surrounding neighborhoods are still growing and offer real opportunities for what are called "single family houses". These units, which accommodate families, often with 3 bedrooms and 1 bathroom, offer purchase prices starting from 50,000 euros with net returns of at least 10%. Also, the "multi-family houses" are included in the Investir.US catalog, with very specific characteristics, these will be investment properties, comprising a reduced number of units, naturally the investment is larger but the profitability remains unchanged, we ensure this.
"Our profitability calculations are as close to reality as possible, with no tricks to inflate the percentage. Therefore, we include all expenses, such as property taxes, by seeking information directly from the source. On city and county websites, as well as rental management fees, which are typically 10%. At Investir.us, we focus our efforts on this type of investment product, to offer a turnkey service. We support you from purchase to property management. We often carry out renovations to offer a product with a competitive advantage."
Julien Raynard, Cleveland market expert , INVESTIR.US
Example of a house in the USA. Real Estate
REAL ESTATE CONSULTATION FOR INVESTING IN CLEVELAND
INVESTIR.US offers their expertise for your real estate investment in Cleveland, having completed the transaction themselves a few years ago with the idea of investing in Cleveland. They aim to establish long-term relationships with investors. Investir.US's core value is transparency. To this end, they have placed this value at the center of their various processes.
"We support you from the moment you first contact us to study your project. We then implement the legal and tax strategy, such as the creation of a Limited Liability Company. We also handle your property's insurance to negotiate the best quotes on the market with the best terms thanks to our long-standing partners. Finally, the relationship continues after the purchase, as we handle rental management in Cleveland for all the properties we offer to investors. The investor only has to collect the rent from their investments. We have therefore set up a platform during the process that allows them to be informed in real time of any work on the property, or even maintenance operations. We publish all the technical documents for the properties, with a technical sheet as well as a detailed and precise list of repairs. We also compensate for the distance with the investor by being extremely responsive, never leaving a question unanswered. Investors are in direct contact with people on the ground, as close as possible to the properties."
Julien Raynard, Cleveland market expert , INVESTIR.US
Investir.us in Cleveland, one reality: the Land
"At INVESTIR.US, we have one priority: the field. Our business requires speed and efficiency. This is why we have established offices in Cleveland, in the heart of Downtown, which allows us to be as close as possible to our properties, both on the EAST and WEST sides of the city. This ensures optimal team communication and we are as close as possible to the properties. We can also welcome our investors to our offices during the week to discuss and visit future investments together."
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