Table of Contents

Are you a real estate investor with properties in Toledo? Or are you considering buying investment properties in the Toledo real estate market?

Strategic property management is essential for maximizing rental profits, especially in Toledo’s real estate market. This guide offers a detailed analysis of the current trends, pricing, and demand in Toledo’s rental sector, highlighting the influence of local economic and demographic factors on the market. It provides practical property management tips to attract and retain tenants, emphasizes the importance of understanding local laws, and guides on selecting the right rental property to maximize income. The article is designed to give property owners and managers in Toledo the insights and tools needed to optimize their rental properties for better financial returns.

Understanding the Toledo Real Estate Market

Toledo’s real estate market has a unique story – it hasn’t always been a hot or even desirable market. Along with Detroit, several decades ago, the city’s economy was nearly decimated when large industries started outsourcing manufacturing to foreign countries. Hundreds of thousands of jobs across the Midwest were lost, and cities had to pivot. As a result, Toledo’s population plummeted because residents had to relocate for other employment options.

A declining population almost always results in either a decline or plateaued housing prices, which is what happened in Toledo. The Toledo housing market became oversupplied for decades, resulting in many properties sitting vacant and left to fall into disrepair.

Today, Toledo is rising from the ashes. The city’s economy no longer relies primarily on a single industry but instead has a significant presence of healthcare, education, insurance, and returning manufacturing businesses. The population has stabilized at 271,00 and started climbing at a rate of 0.39% per year. New construction is increasing. New businesses are getting established. All signs indicate a brighter economic future for Toledo.

Investors Love the Toledo Rental Property Market

Toledo presents a unique opportunity for investors to acquire rental properties at prices far lower than the national average. The median Toledo home price is just $111,000, but investors are purchasing turnkey investment properties for as little as $65,000. Furthermore, the median monthly rent is $895, representing a 9.6% rent-to-value ratio.

In the coming year, Toledo home prices are expected to lead the country and increase by over 8%. The data proves Toledo is no longer a hidden gem – this Midwestern city is poised for a real estate boom. 

However, what also draws investors from around the country is the fact that Ohio and Toledo are considered “landlord-friendly.” That means that the laws regulating rental properties favor landlords instead of tenants. Property owner’s rights are protected, which reduces investor risk.

Property Management Tips for Toledo

Buying a property is only the first step in real estate investing. After purchasing a rental property, you need to handle ongoing management. How a property is managed can make or break an investment. Being inattentive to maintenance requests, poor bookkeeping, and bad tenant screening will increase vacancy rates and operating costs, therefore lowering your profits. You need to manage your investment similar to commercial property – like a business.

Market Your Toledo Rental Property       

Good tenants don’t just show up asking to lease a rental property. You need to market the property to attract interested parties. The more interested prospective tenants you connect with, the pickier you can be when selecting a tenant.

Make sure you have clear, attractive photos that show the property in its best light and feature all major rooms. Create listings on popular platforms like Zillow or Apartments.com, but don’t forget that Craigslist and Facebook Marketplace are also effective tools.

Take Tenant Screening Seriously

Your first line of defense against bad tenants is your tenant screening process. You want to ensure you take every precaution to ensure the household moving into your property will take care of it and pay rent on time.

 To do so, make sure you:

  • Run credit checks.
  • Verify identity, income, and employment.
  • Ask for referrals and actually call them.
  • Check rental history.

If you don’t have confidence in your ability to find, screen, and secure tenants, then you need to start working with a professional property manager. A Toledo property management company will know how to market your property effectively and then evaluate tenants. These professionals understand what red flags to look for in tenant applications and can quickly assess and approve (or deny) an application.

Respond to Maintenance Requests Quicky

A small maintenance request can quickly escalate into a costly disaster if not addressed quickly. For example, a leaking toilet doesn’t take long to cause subfloor damage. Maintaining the property provides the benefits of tenant satisfaction but also protects your investment.

If you’re a remote investor, it’s crucial that you have a go-to list of local vendors whom you can call in the event your property needs work. Form relationships with several plumbers, electricians, and handymen to ensure that someone is always available when needed.

Instead of worrying about handling all maintenance requests on your own, a property management company can take the pressure off. When you engage a residential property manager, you gain access to their extensive vendor network. A great team will amplify your investment’s potential while minimizing costs.

Don’t Overprice the Rent

A big mistake many investors make is overpricing their property when trying to find a tenant. Prospective tenants are usually price-conscious and will show around to find the best deals that meet their needs.

If your rental property sits vacant for months because you’re trying to get an extra $100 a month in rent, are you actually making more money? No.

If your property ultimately gets leased for $1,000 a month, two months of vacancy will cost you $2,000. However, $100 more a month will only earn you $1,200.

In most leasing situations, it’s better for the landlord’s bottom line to price the property competitively and attract tenants quickly. Vacancy is a cost. You don’t want your property to sit vacant. Conduct thorough market research and stay on top of trends. Know what properties are available in the same neighborhood as yours and their asking rent.

Retain Your Tenants

Tenant retention helps keep your costs down. When a tenant vacates a property, there are tenant turnover costs such as carpet cleaning, repairs, and painting. All of these tasks take time, even if you have a team and gameplan ready to go as soon as the property is empty. Tenant turnover can easily cost landlords thousands.

Smart ways to keep your tenants include:

  • Attending to maintenance requests immediately.
  • Limiting rental increases.
  • Pricing your property at market rates.
  • Offering a discount if market rents drop significantly.

How to Increase Rental Yield in Toledo

Increasing rental yield in Toledo is an interesting game. While home prices in this city are low, rental prices are also low.

Increasing rental returns involves carefully navigating a tightrope of strategic upgrades and management without spending too much money.

You need to make smart decisions. Landlords want your investment property to be efficient, not flashy.

Selecting the Right Rental Property

Good rental property returns start with buying a property with good prospects in a desirable area. Unfortunately, some properties might not ever be profitable. Investors need to understand how to find houses with great investment potential.

In identifying potential rental properties, it’s crucial to conduct thorough market research, including a comparative market analysis (CMA), to understand the local real estate landscape. Factors like proximity to key amenities, public transportation, schools, and employment centers can significantly influence rental demand. Moreover, considering future urban development projects in Toledo can provide insight into areas poised for growth, potentially yielding higher rental income and property appreciation over time.

Working with a turnkey real estate company like Ohio Cashflow can make it easy. Their expert team understands the local market, has relationships with brokers, and finds off-market properties that deliver 8-10% cap rates.

Never Over Upgrade

If you start browsing rental properties or even home sale listings online, you’ll quickly realize that the Toledo housing market is not “fancy.” Homes in this city are humble, often showing signs of age. It can be tempting to want to undertake a significant renovation and truly elevate a property’s presentation, but that usually isn’t a smart investment decision.

Rental income strategies for Toledo are different than most other cities. Over-upgrading will result in a lower rate of return, as most prospective tenants won’t be able to afford a rental rate that justifies your costs. Furthermore, many higher-end finishes are less durable than cheaper options, which leaves your property at risk of costly wear and tear. Stone countertops, new bathrooms, and hardwood floors might look great, but they won’t necessarily bring the return you want.

When updating a Toledo rental property, you want to make renovation choices that optimize the space, require low maintenance, and meet the demands of the tenants in that area.

Optimize Your Costs

While some costs (like property taxes) are non-negotiable, others are not. For example, you always need insurance on your real estate investments to protect both the properties and yourself in the case of a lawsuit. However, you should shop around for different policies, comparing benefits and costs. Toledo rental income optimization involves managing costs as much as getting a high rent.

If you’re spending money on your rental property, make sure the benefit outweighs the cost, and you’re getting the best deal available.

Limit Financing on Your Investment Properties

Many real estate gurus will try to convince real estate investors to purchase rental properties using excessive leverage. They recommend you build a portfolio using “someone else’s money,” which might sound exciting, but it really leaves you incredibly susceptible to risk.

We recommend that investors own 3-4 properties, all cash before they start leveraging further purchases. Fortunately, that’s possible in Toledo, where you can buy an investment property for the same amount as a car. A debt-free foundation portfolio provides the security you need for a sustainable investment strategy. 

We recommend limiting your financing to no more than 50% of a property’s value. This strategy helps protect your real estate portfolio in the event of an economic downturn or other unforeseen circumstances. You can lower financing costs and increase cash flow by carrying less debt and being strategic with your loans. However, eventually, loans are valuable for portfolio maximization, allowing leverage and growth opportunities.

Find the right balance between financing and cash flow to optimize your rental property investments and total investment portfolio.

Maximizing Your Toledo Rental Returns with Professional Property Management

Maximizing real estate profits of a Toledo investment property is possible on your own – but the best way to accomplish this goal is to work with a local property management company like Oz Realty. Professional management gives investors the time and freedom to focus on building their portfolio instead of becoming time-poor due to management demands. You want to be able to work on your business, not in it.

The benefits of professional property management in Toledo include:

  1. Automated and timely rent collection.
  2. Effective marketing and advertising.
  3. Pricing strategy and investment advice through market analysis.
  4. Hands-off maintenance.
  5. Cost-effective vendor relationships.
  6. Financial reporting.
  7. Updates on changing legal regulations.

While you will have additional property management fees, your time and attention will be freed up, and you’ll have access to the knowledge base and relationships of the property managers. A great property management team gives real estate investors freedom and the ability to scale their businesses.

Make Property Management Easy with Oz Realty

Property management shouldn’t be a stressful task. The difference between a professional and a personal investor is that experienced real estate investors know that they need a professional property management company to help maximize their cash flow. Property managers are your boots on the ground, letting you focus on building your portfolio of rental properties, not managing day-to-day tenant demands.

Oz Realty is the #1 Toledo property management company with over a decade of experience and hundreds of properties under management. We are your partners in investing, making it possible for local or remote landlords to be fully passive investors. 

About the Author

Kelsey Heath

Kelsey Heath is a real estate content specialist with an extensive background in residential, industrial, and commercial property. She has been involved in the industry for a decade as a professional and personal investor, gaining a deep understanding of the market and trends. With a passion for written communication, Kelsey loves helping people understand the sometimes-complicated concepts behind real estate and is now a sought-out guest and ghostwriter.

More about Kelsey