Competitive advantageThis is the next post in my series on property investing in Dayton, Ohio. My last post discussed my experience as a Dayton real estate investor. I broke down some of the returns I have seen from my personal investments and also discussed the returns some of my clients, who are investors, have seen. In short, I believe that Dayton provides a solid “cash flow” opportunity that can be difficult to obtain in coastal states. In this post I will discuss why I believe that our metro area has a “competitive advantage” over many other areas when it comes to property investment. If you are considering purchasing an investment property then contact me today to speak with a realtor.

Real estate investors looking for cash flow may wish to consider whether certain cities possess a competitive advantage

Many real estate investors buy properties in order to achieve long-term cash flow from monthly rental payments. This is true of those who invest in single family homes as well as those who invest in multi-family units (such as duplexes or small apartment buildings). When looking for properties which provide cash flow, it can be a good idea for investors to choose a city with what Warren Buffet would term a “durable competitive advantage.” In short, this would mean choosing a city with characteristics that differentiate it from other cities and are likely to last over the long term. Such characteristics can increase the chances that an investor’s monthly cash flow will be relatively secure as time progresses.

I believe that the lack of a competitive advantage can potentially spell trouble for a real estate investor. Suppose someone chooses to buy rental properties in a given city that is going through a “boom” that is based on unsteady or unsustainable factors. A change in the economy can quickly make the value of one’s investment plummet. For example, this article, from Reuters discusses a North Dakota town which saw rapid growth earlier this decade during an oil boom. When the price of oil dropped, however, economic activity in the town quickly dried up. This was obviously bad for anyone who had invested in rental real estate. While all cities will experience some ups and downs,I believe  it is also possible to choose a city or area whose advantage is longer-lasting.

I chose to invest in Dayton real estate, in part, due to the competitive advantage provided by the city’s geography

When looking for investment property in areas with a durable competitive advantage, one thing to consider is geography. Location, after all, cannot be replicated. The idea of location and geography was a key factor in my decision to personally invest in Ohio. Roughly sixty percent of the U.S. population resides within five hundred miles of Ohio[1]. When you consider that several major highways (such as the 70 and 75) converge or go through Dayton, our city becomes a likely choice for many ecommerce companies to open distribution centers or other logistical operations. This is one of the reasons why our metro area has recently seen investments announced from companies such as Chewy, Crocs, and other ecommerce businesses. These investments are leading to new jobs in the area. Dayton’s geographic advantage, put simply, is something durable and is also something which can’t be replicated. I feel that such an advantage helps to secure the future cash flow from rental properties.

If you are considering purchasing an investment property, or buying a multi-family unit, then contact my office today to speak with a Dayton real estate agent. I have worked with in-state and out of state investors and I will strive to help you find a property which best fits your goals. I also service the areas of Beavercreek, Centerville, Clayton, Englewood, Oakwood, Fairborn, Harrison Township, Huber Heights, Kettering, Miami Township, Miamisburg, Riverside, Springboro, Trotwood, Vandalia, Washington Township, West Carrollton, and Xenia.

Note & Disclaimer: Nothing in this article, or on this website should be construed as investment or financial advice. The opinions shared on this website are the personal, and not professional, opinion of the author and are not associated with Keller Williams Advantage. Any investment decisions should be made after consulting with a certified financial/investment professional.

References:

[1] https://en.wikipedia.org/wiki/Dayton,_Ohio

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