RENTAL PROPERTY INVESTMENT IN THE USA: FOCUS ON CLEVELAND

 RENTAL PROPERTY INVESTMENT IN THE USA: FOCUS ON CLEVELAND

Before starting their project, any rental investor should consider the state of the market in which they wish to invest their money. In the United States, rental properties are attractive... even if you live in France! Specialists in rental property investment in the US report a net return ranging from 7 to 12%, with no need for significant investments. What should you know and why should you be interested in Cleveland?

Investing in rental properties in the USA: where to put your money?

Obviously, since the United States is a vast country, rental investment in one state will offer different returns compared to the same investment in another state or region of the country. Contrary to popular belief, the most attractive investments are not necessarily those located in the most active real estate markets. As a general rule, it's best to avoid places where real estate prices are rising. To this end, Forbes magazine offers an overview of the best cities for real estate in 2020. Topping the list are Boise (Idaho), Provo (Utah), Ogden (Utah), Tulsa (Ohio), and Killeen (Texas). The list is long! It's also worth remembering that Forbes isn't the only one to publish the list of cities to invest in for rental real estate in the USA.

Get support to make your rental property investment in the USA a success

The sine qua non of a successful investment is, of course, renting the property to a serious and trustworthy tenant. Anyone who isn't on site should contact a competent professional to find a tenant and handle all the necessary procedures for them.

Generally speaking, a reputable real estate agent in the United States will be meticulous when searching for a tenant. They will review the tenant's financial profile, knowing that annual income is one of the key requirements for qualifying for a rental.

Verifying the creditworthiness and information provided by the prospective tenant is part of the real estate agent's job. While there is no 100% guarantee of avoiding non-payment, even in high-end real estate, working with a real estate professional significantly minimizes the risks.

Terms and conditions for renting real estate in the USA

Rental real estate in the USA has specific characteristics, often different from those found in France. For example:

The lease term varies from one to two years and is renewable. The lease outlines the various elements related to the property, including the rent, the deposit, as well as any special provisions and prohibitions. Unlike in some French cities, the landlord is free to increase the rent without any limit each time the lease is renewed. However, they are not free to terminate the lease without a valid reason.

When it comes to rental properties in the US, amenities vary from state to state. While some landlords are more than willing to provide minimum amenities (refrigerator, closet, stove, etc.), this isn't the case for all landlords.

Certain expenses, called "common charges," are payable by the owner. These include local taxes and property taxes. Some states have specific requirements, such as Florida, where the owner must pay "hurricane" insurance.

Focus on Cleveland: a city with strong potential for real estate investment in the USA

The so-called "Forest City," Ohio's second-largest city, is highly attractive to American and foreign real estate investors. The living environment is very pleasant, and today, the city offers a very attractive rental investment return.

Buying a rental property in Cleveland can start at $55,000. This is what you need to pay to expect a return of more than 13%.

Like many American cities, Cleveland took some time to rebound from the 2008 financial crisis. The cradle of the healthcare market in Uncle Sam's country, Cleveland is home to a dozen Fortune 500 companies that have their headquarters there. A sports city, Cleveland also boasts a particularly lucrative captive market. It is notably in this northeastern United States metropolitan area that the Cleveland Cavaliers are based.

Cleveland is also a relatively young city, and today it is the eighth-largest economy in the United States. While it employs many workers in the healthcare and biotechnology sectors, it is also home to many students due to the quality of its colleges and universities.

Cleveland is where millennials and millennials thrive, with 63% of the population between the ages of 18 and 34. There are also few vacancies, with the occupancy rate hovering around 98%. Furthermore, renters stay for an average of four to eight years.

It is the rate of return in particular that will attract investors to Cleveland, since it is higher than 13%, compared to an average of 4 to 7% in the United States. A figure that, in itself, merits the interest of any potential investor!