Jason Hartman starts the show by sharing a CNBC article about homeownership numbers being at their lowest point in history, which is good news for investors. Then, he proceeds to talk about The Greater Cincinnati market that is available to property tour attendees. Jason shares that local townships offer favorable tax situations and are only a 30-minute drive away from major cities in Ohio. He also discusses large employers in the area that offer positions at many different pay grades, which means a diverse portfolio of A, B, and C class properties beneficial to real estate income property investors.
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution. For real estate investors,
Jason Hartman 1:03
This is Jason Hartman, thank you so much for joining me today as we have something to celebrate, yes. Something to celebrate something I’ve been predicting for many years. We’ve been seeing it happening for many years. So it sort of stopped being a prediction, I guess, at some point and became just a trend, a trend that we were monitoring and noticing. But I’ve got more good news on that trend line. So here it is. You’re ready. All right. That is homeownership. Yes. homeownership you think I’m probably going to say something like, Hey, isn’t it great news. The economy is recovering, things are going well. And homeownership rates are up or they’re increasing. But no, that’s not me, the contrarian that you know, and hopefully love Maybe love to hate. I don’t know, which hopefully it’s you just love. And that’s why you’re listening to the show. But even if you don’t like me, Hey, thank you for listening anyway. And thank you for telling your friends about the show. You know, I’m not exactly a stranger to controversy now. So homeownership rate is near its lowest point in history. Yes. wonderful news for you. For all of us investors out there. It’s great news. And again, we predicted this a long time ago. We commented on the trend all along as it was happening, and it continues to happen and continues to be great news. So here are the stats and this is a CNBC article. By the way, we’ve got a guest from CNBC coming on the show. Soon that might even be our next interview. I’m not sure. We got George Gilder coming back. He’s a phenomenal genius that has all kinds of interesting things. To say about the economy and technology and how the two of them go together, so I don’t know what we’re gonna play for our next show, but we’ll keep that a surprise. It’s only two days away after all. But yes, this article about homeownership is phenomenal. And it really ties in with our guests today. And you know, this interview with our guest today, I gotta say, I don’t think I did a great job on this interview. It wasn’t one of my better interviews, but I think you’ll still find it valuable even though your host wasn’t at his best. See, I’m making that disclaimer in in advance. Yes. But hey, Jason Hartman, on his worst day is better than most of his competitors on their best day. How do you like that for cockiness?
Oh, okay. Oh, boy. I’m really making a lot of enemies today or tonight. Okay, anyway, I’ll shut up with my silly cockiness. But here we go. So, CNBC article homeownership near its lowest level in history. This is April 28. So it’s very recent here. Home Sales may be rising but home ownership in the United States is heading down once again. After gains in the second half of 2015. The homeownership rate fell. Yes, fell dear listeners to just 63.6% seasonally adjusted in the first quarter of this year, according to the US Census Bureau, homeownership hit an all time high of 69.4%. Back in 2004, that was the silly george bush ownership society idea. Lyndon Baines Johnson remember, Lyndon Johnson Well, I don’t remember him because I was. That was before my time, but I do watch history. I read history, and all that kind of stuff. Or for our feminist listeners, her story Guess why is it his story? Could be her story? Maybe it should be just our story. Hey, that would be the right word. It shouldn’t be history. It should be our story. Our story, see, yeah, there you go. I bet you heard that here first just thought of it. Okay. So yes, the LBJ had the idiotic, Great Society, which obviously turned out to be a disaster. Some people may think differently, but they’re just wrong. And then George Bush, he had the ownership society and that turned out to be a disaster. Maybe the point here is that central planners should stop trying to plan what kind of society we should have. And that should be determined by us little people, US Beyonds, you know, we can decide what kind of world we want ourselves without a bunch of government intervention, right? Both of those turned out to be big disasters and way back to good old FDR. Okay before those other two and you notice we’re going on both sides of the aisle here, folks. We got a republican and two democrats we’re talking about right. So back to FDR, his idiotic ideas those didn’t work either. That was only salvage by World War Two the the largest public works project in all of human history. Again, war is a bad deal. Of course, it’s terrible. It’s destructive. Why would anything destructive ever be considered? Good? I mean, it’s crazy to me that people think war is good for the economy. That idea is that’s pathological. That’s crazy. Okay, that’s crazy. But like having a cup of coffee, or an espresso shot. It gives it instantly gives a jolt right but the the comedown is never good. It’s crash. Okay. Anyway, back to the article because we are host He always gets off on these damn tangents, you got to stop that. All right, so 69.4% back in 2004 under the program that bush set in motion and it was completely stupid, but really Clinton actually, why not blame a democrat when you get the chance. Clinton really set it in motion with the Community Reinvestment Act, actually, that was back to Carter, another Democrat.
But then again, you could blame Reagan because he deregulated all the smells, and that was a disaster to the point here is you see the common theme no matter what side of the aisle you’re on politically. Let’s get the big hand of Big brother out of the pie, and let the free market determine things instead of government intervention. So we talked in the past and we predicted that Several meet the Masters events ago that every 1% decline in the homeownership rate would bring about 1 million. Yes, that’s actually a big number, 1 million new tenants into the rental market. Wow, investors rejoice 1 million new new tenants for every 1% decline in the homeownership rate, and yours truly has predicted or has hoped for a homeownership rate of around 55%. I just, I just kind of think that’s where it should be. I think that’s the appropriate amount. I think if the if the intervention was reduced by the government and the government sponsored entities, Fannie Mae, Freddie Mac, then the homeownership rate would fall to somewhere in the 55, maybe even 50% ballpark and think of what we have happened there that would bring about 9 million more people into the rental market. This idea that having this huge homeownership rate is good for society and good for the economy is simply not true. You’ll never hear this from any other real estate agent except myself. Probably. It’s just it’s just an idiotic idea. homeownership is not necessarily better, not necessarily owning lots of investment properties. Yeah, that’s good. That’s really good. You know, I love that. All right. The article goes on to say that that 69.4% rate in 2004, during one of the biggest housing booms in history, of course, it was a central planner induced boom, not a market induced boom. That was also when mortgage lending lending was arguably at its lowest looses sorry, loosest level in history, very promiscuous those mortgage lenders were. Now they’re kind of prudish nowadays. They’re not so promiscuous as they used to be right? The homeownership rate is now just one 10th of one basis point higher than its all time low in the second quarter of 2050. So it ticked up ever so slightly in the past year, economists continue to point to a recovering job market as fuel for growth in the housing market. But for young Americans, just having a job does not translate to home ownership. Whoa, I could go off on that for 15 minutes. But you know what, let me bite my tongue and continue high levels of student loan debt, tight mortgage underwriting standards. I told you they were prudish. Okay, those more wonders and overheating home prices all are all contributing to very low homeownership rates among the nation’s youngest workers, homeownership, among those aged 25 to 34 is nearly 10 percentage points lower than it was a decade ago. Wow. Do you realize how significant that is? So a decade ago for people 25 to 34 that homeownership rate or from a decade ago has dropped 10%.
Jason Hartman 11:45
That’s frickin huge. It’s like golf. Yeah, golf. Remember I told you about golf properties and golf courses on a prior episode. Do you know that? I mean, if you enjoy vested in a golf course, or spent a bunch of money on that country club membership. You’ve probably been hurt pretty bad, because golf in terms of the number of rounds of golf in the past decade has declined by about 35% that is ginormous. So all those people with those golf course homes, you know, homes on golf courses really beautiful to look at for sure. And if you play golf, hey, even better, but the millennial generation, they don’t have the time or the money to play golf, that this is just not their sport, and apparently neither is homeownership. See how those two ideas almost tie together? You can almost make anything tie together if you’re just creative enough and persuasive enough. Okay. First time homebuyers are still barely 30% of today’s buyers. Traditionally they comprise 40% of homebuyers rental affordability remains a big problem in many places. And that makes it harder to save for downpayment said. And we have this guy on the show before. Jed Galco. He’s been on the show, an independent economist and senior fellow. Oh, I guess he, I guess he changed jobs. Cuz that’s not who he was with. At the time. He was on our show, an independent economist and senior fellow at the Turner center for housing innovation at the University of California, Berkeley. Wow, a lot of Central planners there at Berkeley. That’s my mom’s alma mater, Berkeley. And my mom said lou dobbs was a socialist when I quote, my absolute love for his book war on the middle class. Great book, you must read that book war on the middle class. You obviously know the article does not say this, right. Okay. My mom went to Berkeley in the 60s and says Lou Jo, Lou Dobbs is a socialist. Mom, I don’t know where you get that. But whatever. Okay, we’re still seeing relatively few first time homebuyers because young people are buying homes later than they used to some of this long term shift toward marrying, and having children later in life. Hey, I talked about that on a recent episode about the how maybe it’s actually better to have kids later. Oddly, counterintuitive, right? But that’s why I talked about that article because you can’t hear the dogs that don’t bark most of the time, right? The profound impact of things unseen. Some of this back to the article, Jason, some of this is that the recovery has been slow among young adults. Most Millennials are still on the young side. For homeownership in Now, remember the millennial generation the Gen Y cohort, can be segmented up to right into the older and the younger of that time. The graphic cohort, the largest cohort in American history, almost 80 million strong, bigger than the baby boomers. I know we have many baby boomers listening. But Gen Y is actually a bigger generation and look at how your generation changed the world, change the country for sure, but even change the world dramatically, while Gen Y is going to change it even more in completely different ways, because they are saddled with huge debt in terms of student loans, not dischargeable in bankruptcy, no second chance debt slave for life. They’ve got a whole different mentality. They saw their parents get burned in the housing market and their very formative years. They like the sharing economy. They’re used to Uber, they’re used to Airbnb, they’re used to Lyft. They’re used to all of these sharing economy type concepts. They like portability, it’s just a different world for them, okay? It’s just a completely different world. So this may be because renting is so expensive, and because the expected migration of babies Baby Boomers from their larger houses in the suburbs to rental homes has been slow to take off due to the recent recession and historic crash and home prices. Well, you know, a lot of those prices, they’ve really come back in a lot of places, pretty much to the same level almost. I mean, that’s we’re not too far off from where we were before in many, you know, it depends on the price segment depends on the geography too long a concept to discuss right now.
But yeah, you know, that’s what Harry dent predicted. And he’s been largely wrong about that, by the way, Harry dent, huge fan of his work. He’s been on the show many times, as you know, but he’s been largely wrong about the bust in the mcmansions. And his latest book, I think it’s his latest at least unless he’s he pops out a lot of books. So maybe I’m not up on his latest but the demographic Cliff a fascinating book, and he talks about the real estate crash coming up and he’s the he is not called Right at all. So maybe he’s going to be 10 years behind the curve in that I don’t know we will see. But again, a different subject. Okay, finishing the article here, household formation is now increasing, but two thirds of it is on the renter side. Yay investors today think about that. household formation is now increasing. Okay. But literally two thirds 66% of it is in the rental market. In other words, these people forming households, two thirds of them are renters. They’re not buying this is it’s it’s an amazing time to be alive. But it’s an even more amazing time to be a real estate investor.
Yeah, who just one third of new households were owner occupied homes. homeownership is highest in the Midwest. Well Remember when CONSUELO MACK was on the show? And Meredith Whitney, and we talked about how they feel that the Midwest is their favorite emerging market? As if it’s a country the way they say that. But yeah, we’re doing a lot of business in the Midwest for sure. And you know, I’m doing a 1031 exchange right now I’m deciding where I’m going to buy Am I going to buy in Ohio? Am I going to buy in Memphis again? Am I going to buy in Chicago? I don’t know. I’m gonna buy a couple, three more houses. We’ll see. homeownership rate is highest in the Midwest, where houses are cheapest. And its lowest in the west where houses are most pricey. And by the way, that makes total sense. Those people must be listening to my podcast, because in those pricey markets, you’re much better off being a renter. Okay. Hey, if you haven’t yet, and many of you have and thank you, we appreciate your business. We appreciate you buying our stuff. So Hartman education.com. We’ve got that sale, a little less than two weeks. To go Hartman education comm you can get a bundle of the online courses for meet the Masters, the last two of them both this years and the prior years. And you get Jason Hartman University Jq all bundled in at a spectacular sales price. absolutely spectacular deal. So take advantage of that. Because time is limited false scarcity, absolute BS in terms of all those internet marketers that say, Oh, it’s a limited time offer, but yet it’s a digital product. You could sell it a billion times. Yes, I could, too. But hey, you got to have some incentive, right? And if that’ll make you get off the dime, and buy those very excellent products, then that’s what I’m going to do. I’m going to use that same false scarcity idea. We don’t do that with real estate though because real estate really is scarce. In fact, Let me just tell you two things before we get to our guests today and talk about the Cincinnati while the Greater Cincinnati market where we have a property tour coming up and you should register and join us for that. Jason Hartman, calm click on the events section, you got early bird pricing on that. But two things number one, one of our clients recently kind of talked one of our other clients out of buying a property. And he said, Hey, I didn’t mean to rain on your parade. And I said, don’t worry about it. Because those properties that this one guy was thinking of buying, they will sell to somebody else. There is no problem with selling properties. Now Now granted, if it was back in the doldrums if it was 2008 2009 Yes, I’d be upset that you talk the guy out of buying, but not anymore because the the challenge now is getting inventory The inventory sells almost all of it sells. And if it doesn’t sell it’s, it’s not a good deal. So that’s fine. We don’t want that. We don’t want the bad deals to sell to our clients. And then someone else asked me, Hey, you know, if I buy a whole bunch of properties, will you give me a better deal? And if I if if you buy a whole bunch of properties, you’re just taking inventory away from our other customers that will buy them anyway. So I’d love to say yes, bulk discount, you know, if you want to buy 40 properties, but it doesn’t matter because real estate has a built in scarcity. That’s why it’s so valuable, as what was it well, Rogers or Mark Twain or someone like that, not through like each other, but said, buy land, they’re not making any more of it. But you know, when you combine it with my packaged commodities investing concept, it’s really, really something. So check out the great properties at Jason Hartman calm in the Properties section, you’ll love them, they’ll pretty much all be gone. Before you know it. Our Ohio provider has agreed and you’re going to hear from her in just a moment. She’s agreed to hold some properties back for our upcoming tour. We always have to do this for our property tours. Join us for that because you’ll get the creating wealth in today’s economy seminar, as well as the property tour. Great time a lot of you have registered, I hope to see a lot more of you there. And check out Hartman education comm for our really big sale. And let’s go to our Cincinnati, Ohio market profile.
Hey, listeners, I know you’ve heard me talk a lot about one of our fantastic managers. You know, you’ve heard me say many times, I would rather have in a team and a B market than an a market and a B team any day and I used to sort of consider this market. A B market but it’s gotten quite a bit better recently in the last couple of years. And we’ve been in it for maybe three years now. And that is the Cincinnati Dayton metro area, you know, you know, Ohio. Now there are still some very blighted areas of Ohio, that we are not recommending. But we’ve got some good stuff here. We’ve talked about it before, but with our upcoming property tour, I thought we’d get our local market specialist back on to talk about that. And you’re gonna learn some stuff about property management during this interview. So even if you’re thinking, you know, I’ve got I’ve got the three to five markets that Jason always recommends. See, isn’t that weird? I talked about myself in the third person. Yeah, I know. That’s terrible. That guy Jason is always recommending diversify in three to five markets. Even if you’re already diversified enough. You will want to hear this interview because our LMS in this market is very good at property management. So let’s dive in. How are we doing? In the Cincinnati Dayton Metroplex nowadays,
Local Market Specialist 24:03
we’re growing like crazy. So it’s really exciting right now.
Jason Hartman 24:06
Well, that’s good to hear. Nope. So, you know, this has sort of been considered, over the years, many areas of Ohio have been considered kind of blighted and, you know, certainly not as bad as Michigan. That’s really a tough one there. And especially in the Detroit area, of course, but other areas of Michigan too, sometimes. And we’ve done some very successful business in the Grand Rapids metro area that’s been really good for us. So that’s kind of surprised me as well. I just financed a property in Kalamazoo, Michigan. You know, there really is a place called Kalamazoo. And so some of these markets are becoming pretty attractive. Now. What What do you tribute that? I mean, has the government become more business friendly or what’s what’s going on?
Local Market Specialist 24:51
I think that governments have definitely become more business friendly, and specifically the unincorporated areas, Ohio still has a lot of areas that are considered townships which are not cities, which have some very fair, favorable tax benefits. For example, the Westchester Liberty township area, which is one of our fastest growing areas, has had GE Aviation move in over 2000 employees into their new location inside of Butler County. And they did that and left Cincinnati and a couple of other markets because of this paper bill tax situations.
Jason Hartman 25:25
Mm hmm. No, good. Okay. So, Butler County is one of the areas you like quite a bit, although you do go a little bit outside of it in different directions, especially north of it. Why is that so special? Well,
Local Market Specialist 25:39
for many years, everyone’s been moving to the suburbs. And Butler County is really a suburb to two large cities. On the south side. It’s a suburb to Cincinnati and on the north side, it’s a suburb to Dayton. And people like the wide open spaces, the good schools, the great places to go out to eat but many times they’ll work in the city. And it’s 70 miles from the north end of the county to Dayton. And about the same 17 miles to Cincinnati, and Ohio, that’s a 20 or 25 minute commute because traffic isn’t as horrific as it is in some areas. So it’s a very reasonable commute in people like having more room to move around. That growing population is another thing that makes it attractive for investors and for tenants will talk to us about the tenant
Jason Hartman 26:27
who is that target tenant in your properties.
Local Market Specialist 26:31
Typically, in our B class properties, we’re looking at someone that has a two year degree or better. That’s very median income. The median sales price of homes in Butler County is about 120,000. It goes up or down depending on which end of the county you’re in. But at that price, you know, that’s a $700 a month mortgage or 995 to 1095, and a rental payment. So that’s very reasonable and very close to that 1% rule.
Jason Hartman 27:00
To find a, b, and c in terms of price range, and I mean, of course listeners, you need to understand this is somewhat subjective. There’s no question about it. You can’t, the houses don’t come with labels A, B and C. Yeah. That’s, that’s not like in the paperwork, okay? But define that if you can for the listeners and define those A, B and C level prices in your markets and tell us if you have a favorite
Local Market Specialist 27:25
Sure, I think in our marketplace, and a 50 to $80,000. Home is typically a C class property, a B class property depending on which city you’re in, because of course, some cities have higher median income. So those homes are a little more expensive, but a medium be priced home is 80 to 120, or 80 to 140. And then an A class property is always 140 or above. So each of those homes kind of have a plus and a minus. Of course you’re a class homes have tendency to have greater appreciation. But remember, Ohio is a millennial market and you can’t eat appreciation. My favorite is a combination of the B’s and C’s. And then if you’re buying 10 homes that I think everyone should have an A class property. So my choice would be to seize six or seven B class properties and then one a class property on the end.
Jason Hartman 28:22
Okay. All right. So you define that right in the same market have, I talked about diversification in the three to five metro areas. So if yours yours would be counted as one metro area and Memphis would be another Atlanta would be another, Indianapolis would be at another, but you say right within your area, people should diversify into different classes of property. Hmm.
Local Market Specialist 28:45
I think so. And those were my recession lessons that when we saw people starting to move and downsize, they did that at different times. For example, your C class properties which were your tenants that probably had this one a savings account, those went vacant. First, your B class properties that took six months to a year before the recession really hit them, they were a little more responsible had a little larger savings accounts. And our a class properties. It was almost three years into the recession before we saw those even hitting the market as far as foreclosures, because many of those people had either decided to sell and or moved out of the home and and gave it back to the bank before the recession hit them the hardest. So by diversifying your portfolio within either your marketplace or your price ranges, then if another recession would happen to hit, you have a little more diversity.
Jason Hartman 29:42
Yeah, right. Right. Okay. And so those different classes of workers will get may affect it in different ways, or I should say laid off in different I mean, that’s the idea behind it. Right, exactly. Okay. Well, I want to circle back to a little bit more about yourself. Marking the major employers and all that good stuff. But our clients over the years have been impressed with your property management. And we’ve had many clients buy in your market. Tell us some of your your best practices for property management,
Local Market Specialist 30:15
I think your single best is your application, because we call that the honeymoon period, when you’re on a honeymoon, a tenant will give you or a potential tenant will give you all the information that you could possibly ask for. And you may not think you need all of that information today. But if the tenant starts falling behind, it’s always nice to have mom’s phone number if they’re a younger tenant, because they really don’t want mom to be called twice, so they become more responsible. And we’ve found that by asking a lot of questions, and then verifying all that information on the application really starts off the relationship, right? If we can screen the tenants to where we have weeded out anyone that has had a bad history, then we don’t have to worry about that. In the future of them repeating that history, because we know people have tendency to repeat that habits.
Jason Hartman 31:05
Mm hmm. Yep, that is true. no guarantee of future results. But you know, the past what else? Can you go by type of thing? Yeah. Got it. What else on management,
Local Market Specialist 31:16
I think holding them very accountable. We have a very strict policy rents due on the first light on the fifth eviction notice on the sixth 100% of the time, and that doesn’t mean we’re going to evict the tenant, it means that we’re telling them that they’re on notice that if they don’t pay, that they will be evicted. And by the first month that they’re late by starting that process with them, then they know you’re serious. You’re not mom and pop that’s just going to forget about it. They have to pay their rent every month on time. And then we will take their money up until the time of the set out because we don’t want the property to be vacant. And we want them to learn their lesson but absolutely holding them accountable by walking through that eviction process very quickly. teaches them that they have To chaos first,
Jason Hartman 32:01
what else though in terms of that, I mean, the reason I’m kind of, I mean, all property managers will say that they’ll all come on the show and say, well, you you got to be firm with your tenants, you got to teach them that they need to pay the rent, etc, etc. You know, of course, where everybody agrees with that. But it doesn’t always happen in practice. Why doesn’t it happen? Why is it so frustrating for some?
Local Market Specialist 32:24
I think they don’t communicate. And today, we use a program called AppFolio to communicate with our tenants, which allows us to text them, email them, call them by telephone, and do electronic billing, which you have to keep up with what the current trends are. On the other side, we still mail we do snail mail, to the people that don’t have access to email because we know that they’re in a different class of people. I think the other thing that attracts the best tenants is to make sure that you have the best looking property when you put it on the market. And that means it’s clean, it’s fresh, it’s painted It looks nice, it smells nice. Because if you put a stinky ugly property on the market, you’re going to get a stinky, ugly person that’s willing to take it. So we try to make ours the shiny Penny, the prettiest one on the market to attract the right kind of tenant. I think that’s really the first step.
Jason Hartman 33:15
Okay, anything more you want people to know about management before we kind of circle back to the market and talk about some of the big employers and so forth.
Local Market Specialist 33:23
I think that, you know, looking at longevity of tenants, our average life right now is about 3.4 years. And we spend a lot of time identifying what’s going to the asking the next question that says, what would make you want to stay in our property longer. And we’ve been very successful this year with asking tenants to go from a one year lease to a two year lease. And a one year lease is our neighborhood normal and two years is not normal. But after they’ve been a tenant for a year and they’ve been consistently good. We’re asking them to then sign a two year lease which will extend the life of that tenant, which is really We’re all looking for we want people that move into the properties, pay their rent, and don’t move out and take care of it.
Jason Hartman 34:05
What do you think about rent increases, though? See, in the reason I asked this question is, some property managers say, Well, hey, we don’t we really minimize turnover. But if you don’t have some vacancy, you’re just not charging enough. Right? Would you agree with that philosophy? Or?
Local Market Specialist 34:23
I don’t, I don’t necessarily agree with that philosophy, because I know that a vacancy will cost you at least one month’s rent, if not two in a year. And if you can extend that over three to four years, then at five years, you may want to ask yourself that question, but keeping that property occupied for at least the first three to four years, I think is important to your cash flow. And if you raise the rent 10 to $20 a month, it’s not going to make up for that month, a vacancy that you’re going to have when the tenant turns over,
Jason Hartman 34:54
no rent increases or every couple of years. I mean, We’d like to see our clients get a Performa rent increase. So you know if they can raise the rent 4% annually on average, I think that’s pretty great.
Local Market Specialist 35:09
I think you have to absolutely look at it. And we look at it by demand in that marketplace. You know, if and what is currently available in the marketplace at that time, if we have a flood in one neighborhood vacancies, then we’re not going to raise the rent in that specific neighborhood. If we’re renting very quickly in that neighborhood, then we’re going to look at raising the rents there, but we raise anywhere from 3% to 10%. Depending on the neighborhood,
Jason Hartman 35:36
can you raise 10% and keep the tenant or you’re retaining at that point? I mean, I can’t imagine most tenants are gonna do a 10% increase.
Local Market Specialist 35:44
It depends on when they rented the property. You know, if they’ve been in the property for a number of years and haven’t had an increase, then that’s very normal for them. Hmm,
Jason Hartman 35:53
yeah. Okay. We’re really working. Tell us about this, this sort of typical tenant.
Local Market Specialist 35:59
Well, when we were Talking about that median income. We’re looking at a lot of teachers, nurses, government services workers. Some of our largest employers are Cincinnati Financial Corporation, GE Aviation, the larger school districts. We have Miami University and Oxford, which is a very large school that employs a little over 3000. So there’s and then there’s the healthcare, which is absolutely exploding in our county right now. Because in the last 30 years, hospitals were all built in the old downtown areas. So with the shifts of population to the counties, to those suburbs. Now, the hospitals are all moving out here. So we’re seeing a huge surge, and employment and that’s everything from the cleaning people to the doctors and nurses.
Jason Hartman 36:49
Okay, so healthcare workers, that’s good, that’s stable, it’s in demand. What else should people know about that target tenant?
Local Market Specialist 36:57
We have a large steel manufacturing firm. called aka steel that employs a little over 2400 in Middletown, aka steel is the largest steel rolling mill in the nation today, and is a fortune 500 company. You know, many times we look at manufacturing, we think, Oh, this is the rust belt, but AK steel is a fortune 500 company. So it’s not quite that old rust belt that many people thought of. Mm
Jason Hartman 37:21
hmm. Okay. And then are they those people are running C and B class properties probably most of the time, right?
Local Market Specialist 37:28
Actually, they’re A and B class properties because the steel workers make 70 to $90,000 a year so
Jason Hartman 37:34
Oh, counterintuitive. Ah, okay. What else we
Local Market Specialist 37:38
have an Ikea in Westchester. And Westchester is one of our growing areas again, because of it being a township. And we’ve just recently opened the Liberty center which is the area that the property tour is going to be in the Liberty center over the next year is going to employ over 3000 people. That is everything from hotel workers to foodservice. It’s one of those live work, eat places where there’s everything in one spot.
Jason Hartman 38:06
Right, right. And I love that, you know, when you sent over the pictures of the hotel and everything, I thought, wow, this is nice.
Local Market Specialist 38:13
It’s only been open for about eight weeks now. So you’re going, it’s really going to be nice,
Jason Hartman 38:19
good. Well, let’s talk a little bit about the property tour and what you have planned for us. As soon as it gets a little closer, you’ll be holding some inventory back for our tour attendees. One of the problems we commonly run into on tours is we don’t have enough inventory of properties for people to purchase. It’s a good problem to have, but it is a problem nonetheless. I mean, it’s a good problem for us to have may not be seen as good for the customers. We want people to have a decent selection of properties. So talk to us about inventory and kind of what areas we’re going to see and and then we’re having dinner at your beautiful home on Saturday. I can’t wait.
Local Market Specialist 38:56
Yes we are. That’ll give us a chance to socialize. To meet all of our team, because many times when I’m out, especially at your group, it’s only myself and maybe one other person. Most of our management team will be at the dinner. So they’ll have a chance to meet everyone that makes the process work from the project managers that work the rehab to the property managers that are ultimately those people that make you continue to get money every month. And then, we’re going to start at the Liberty center. And I know we have some great education planned, and a break for a fabulous launch. And then we’re going to get on the tour bus. We’re going to see at least six properties. We’re going to look at the A, B and C class homes, so you can see all what the differences is. differences are and then we’re going to look at them in a couple different phases of rehab. We’ll probably see one stinky one that makes you know why we work so hard to make them nice. Some that’s in the middle of rehab so you can see what’s actually going on the detail in the rehab. We, we do, and then we’re going to see a number of finished homes that will be available for you. available for your customers only.
Jason Hartman 40:08
Okay, okay, good. Good stuff. Okay. Well, any other thoughts you want to talk about about your market as we wrap it up?
Local Market Specialist 40:16
No, I think we’ve covered all the great things. I mean, the growing population is important because you want your rental property to be in demand. We have extremely low unemployment. And I’ve always had that throughout the recession. We’re right at 4% right now. And you know, the demand for rental properties.
Jason Hartman 40:33
It’s basically full employment. Yeah,
Local Market Specialist 40:35
yes. Absolutely. And that means your rental properties are full and in demand, and that’s what we want people that can pay.
Jason Hartman 40:43
Yeah, good stuff. Good stuff. Okay. And the property tour, go to Jason hartman.com. That way you need to fly in on Friday, June 3. You can either fly out Sunday night, June 5, or Monday the sixth. We’re gonna have a great time you’ll get the hotel booking. Link after you, you book and we have a discounted room rate their beautiful hotel like you said it’s only eight weeks old as of as of now. It’s 125 per night, I believe was that the rate? That’s correct. Yeah, good, good stuff. I’m sure you’ll have a fun time. One of the best things I love about these property tours is getting to share so much knowledge with our attendees. You know, we learn from our clients, you guys teach us a lot of stuff. It’s our job to sort of assimilate that and then feed it back to all the other clients. I just love doing that and we could have so many meals together. We’ll be having three meals together on Saturday and two meals together on Sunday. So it should be a fantastic property tour. And I’m just looking forward to seeing everybody there. Go to Jason Hartman calm, click on the event section. At this point based on registrants, we still have early bird pricing. But the price goes up is when we have more registrations and as the event draws near, so register as quickly as possible, and we look forward to seeing you on Saturday morning, June 4 at our Cincinnati area property tour. It’s gonna be a great time. Thanks for joining us.
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This show is produced by the Hartman media company All rights reserved for distribution or publication rights and media interviews, please visit www dot Hartman media.com or email media at Hartman media.com. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax legal real estate or business professional for individualized advice. opinions of guests are their own. And the host is acting on behalf of Platinum properties, investor network, Inc. exclusively.