Ep027: Investing in Ohio Isn’t “Safe” — It’s Predictable (And That Matters)

Chris McAllister: Welcome to the Landlord Profitability Playbook Podcast, where it’s my job to create and coach business opportunities and strategies that support and add value to the lives of real estate investors. I’m Chris McAllister, the founder of ROOST Real Estate Company, and I’m here today with our Director of Marketing, Laci LeBlanc.

Good morning, Laci. 

Laci LeBlanc: Good morning, Chris. 

Chris McAllister: So today we’re gonna dive into what it’s like or, or what priorities might be for investing in Ohio. And the actual full title is, investing in Ohio isn’t safe. It’s predictable. Why that matters. So most real investors, most real estate investors start with the same assumption.

If I just pick the right market, everything else will work itself out. And I get why people think that we all want certainty. We all wanna believe that there’s a safe place to put our money and where the surprises disappear. I can tell you that after owning and managing and advising on hundreds of rental properties across Ohio, I’ve learned something that runs counter to that idea.

Ohio isn’t a safe place, even though we’ve got a lot of investors from all over the world that, that, uh, uh, originally thought it was. But I can tell you that Ohio, Ohio is predictable and for landlords predictability. There’s a heck of a lot more valuable than safety. So in this episode, we’re gonna talk about what predictable actually means in rental real estate, why Ohio behaves the way it does.

And how our three original core markets, Columbus, Dayton, and Springfield, Ohio, can produce very different outcomes even though we’re all in the same state and we’re all basically right, right along, uh, I 70. So if you’ve ever wondered why your property feels harder than it should, this conversation might explain why.

Laci LeBlanc: I feel like this conversation needs a lot of, arguably interjected into it, but because they’re pretty strong claims that you’re making, um, that picking the right market isn’t enough. So talk to me more about that and tell me why so many investors get this part wrong. 

Chris McAllister: The market selection I think, has been overly simplified.

You know, investors are taught to chase labels, right? Safe, hot, emerging, cash flowing instead of understanding how markets actually behave over time. And that phrase over time is key because if you’re a a rental real estate investor, you know your time horizon. There’s a huge variable and a huge factor that can work in your favor.

Two landlords might buy, you know, in the same market, even in the same neighborhood, and still have wildly different outcomes. The gap usually isn’t, you know, a difference in effort or in intelligence. The gap is almost always in expectations. So if you understand or if you misunderstand how a market behaves, I guarantee you you’re gonna make the wrong management decisions and the, and the market is pretty unforgiving.

Eventually it, it, it will correct you. 

Laci LeBlanc: Yeah. This reminds me of the conversations we’ve had. We’ve actually got a two part podcast, uh, episodes called The Seasons of Investing. So we’ll put that link to that in the show show notes. ’cause I feel like that’s like required. It should be the required listening before you get to this point, um, about how markets perform, but you make a distinction between safe and predictable.

Tell me what the difference in those is. What do those really mean when it comes to real estate investing? 

Chris McAllister: Predictable doesn’t mean that nothing ever goes wrong, right? Properties still break. Tenants still move. Rents still fluctuate, but predictability means that those things happen in patterns that you can plan for.

Employment changes slowly. Rent growth. Comes in increments, generally not spikes, right? Ma maintenance costs tend to, repeat and, and outside of the COVID window, I don’t wanna say that they’re perfectly stable, but things are clearly a lot more stable here in 2026 than they were. From 2022 through, let’s say 2024, and even 2025, you know, taxes and insurance, they tend to go up, but they tend to go up predictably over time, and they virtually never spike overnight, at least not in a more predictable market like Ohio.

And most importantly. Predictable markets reduce compounding risk, right? They reduce the chance that multiple problems or multiple challenges hit at the same time, right? There are markets where there’s a lot of moving parts and a lot of good things can happen at once, and a lot of bad things can happen at once, and that’s where portfolios usually get clobbered.

Laci LeBlanc: Yeah, that’s a good point. I think here I’m in North Carolina as we’ve talked about, and our property taxes, our tax values of our properties did rise pretty suddenly, I guess, and by a lot. Um, but one of the things that I think, you know, you have to keep in mind is just because, you know, the tax assessor says your property value is worth more, that doesn’t mean people are automatically able to, to pay way more.

Right, right, right. Um, so I think that’s another good point is. How all these things work together, but a lot of landlords hear the word predictable and assume kind of low growth. It’s like they think that’s the synonym. How do you respond to that? 

Chris McAllister: Before I jump into that, I just wanna touch base on the tax situation because in Clark County where Springfield is where I have most of my rental properties, we just went through our five year cycle and our taxes went up dramatically.

Now. Was that predictable? God, you know what it was, we never talked about it. We, we never wanted to think about it. But the tax rates didn’t go up. It was just that, that, that dramatic. Increase in value, you know, post COVID, that five-year period where property values went up so dramatically.

That’s why, you know, our, our first half tax bills went through the roof. It was predictable. I just didn’t do it. You know, I could have done the math. I, I I, I, I could have, you know, said to myself, well, you know, what, five years ago I could have sold this property for a hundred thousand. Now I’ve gotta sell it.

I could sell it for 150,000. I could have done the math and said that my $1,000 tax bill was gonna be 1500 this year on that property, and I didn’t do it. You know, sometimes, uh, what feels like a spike. Is, uh, if you look at back on it it, it could have been predictable, but, 

Laci LeBlanc: well, and you also didn’t raise your rents by 50%, right?

Chris McAllister: We, we did. And, and, and even though, you know, we, we, we, we’ve really enjoyed some, some pretty solid rent growth the last five years across all the markets we work in. It, it kind of feels right now that we’re a little bit behind again. And now the challenge this year is going to be, you know, raising the rents, a reasonable and predictable amount for the tenants, but keeping the thought in mind that our cost structure has changed and, and, uh, now we’ve gotta figure out how far can we reasonably push those fronts to, to capture, you know, what’s actually happened with the taxes.

So it’s, uh. It’s something we all have to deal with as an invest as investors. It happens every five years or so in Ohio, I think it’s five years. It’s either five or seven, but it is, it is known information. It, it is something that can be predictable. But in any case, your question was. That predictable, you know, might equal slow or low growth.

And I, I think that’s a, a bit of a misunderstanding. You know, predictable still doesn’t mean that the upside is capped. Just like we still have room to raise our rents every year a reasonable amount, and I say reasonable in that two to 4% range maybe even 5% given neighborhood. But that’s a far cry from the massive.

Spikes that we saw coming outta COVID, where some folks were able to raise their rents. 10, 15, even 20%. So predictable doesn’t mean that the upside, it’s capped. But it does mean fewer surprises. You know, long-term landlords don’t fail because appreciation was modest, right? Any appreciation is a wonderful gift, right?

They fail because volatility stacked up faster than their cash flow could absorb. And that’s sort of what we’re dealing with right now. After, uh, the property tax payments, um, that are due this month. February. So predictability also allows you and stay in the game long enough for for long-term compounding to work, and that’s where real profitability lives.

Laci LeBlanc: Yeah, that makes sense. But what might not make sense to people listening is, you know, what’s so great about Ohio? Right? What makes it so much more predictable than another state or another area of the country? And therefore, a good place to invest as long as you, you understand what you’re looking at.

Chris McAllister: Well, I, you know, I know Ohio, I, I, I know most of Florida, but Ohio isn’t driven by a single story. And I say that because I don’t know about the other 48 states specifically because I haven’t worked or invested there. But Ohio isn’t driven by a single story. There’s no one industry ing everything up.

You know, employment is spread out across healthcare, education, logistics, manufacturing, defense, and government. And population growth is modest. But there, which means we, we may not be having explosive growth like say Texas or Florida, but it also means we’re not having dramatic declines in population.

You know, the housing supply itself tends to change gradually and most renters are renting, you know, because they need a place to live. Not because they’re just passing through. Right. So there, there are, in some of the high growth states you know, you’ve got people that come in, they may only stay in those states, stay in that job for two or three years or even less, and then they move on someplace else.

That tends to be, that, that tends not to happen nearly as much as in Ohio as it as it might in some of the high growth or Sunbelt states. So the unique properties that make up the Ohio. Economy, it tends to create stable demand patterns that landlords can actually manage into, if that makes sense.

Laci LeBlanc: No, it does. And yes, I mean, stability is a nice synonym for predictability in a lot of ways. And I think, again, I’ll use North Carolina as kind of the alternative to this. We were a big furniture. State, uh, especially Western North Carolina, a big area in furniture manufacturing. So when the decline of furniture manufacturing came about, it wasn’t sudden, but it felt sudden.

You know, our whole, our whole part of the state really struggled. Um, and that, you know, that’s just an example of the, kind of the alternative side of things. There was one industry propping everything up, and so when that industry kind of failed, everything went downhill. But, um, so just as a. Counterpoint.

But let’s talk a little bit about Columbus. So people call it Ohio’s safe market, but I’m, I’m guessing that you might not agree with that. 

Chris McAllister: I think the label safe might miss the point a little bit. You know, I don’t consider any market safe because that implies an absence of risk, right? The fact is Columbus isn’t safe, or to be honest with you, forgiving at all, especially on the front end when you buy a property, you know, the entry prices in Columbus are higher.

Than most of the state. I, I would say the rest of the state. And competition, for those properties is intense and cash flow, at acquisition and even the first 2, 3, 4, 5 years could be thin, especially if you’re getting a loan. So where Columbus Forgives mistakes is on the backend, right at the, at the end of the, of the life of that rental property.

So liquidity and appreciation. Have historically covered a lot of sense, if that makes sense. Right. So even if somebody overpaid for a property in almost every instance, for the past probably 20 years in Columbus. Appreciation and, and the final selling price at the end of that hold period has really covered a lot of mistakes.

It’s really bailed a lot of investors out. So the cool thing about Columbus is it’s tough on the front end, but there tend to be a lot more exit options. And then there’s a lot more forgiveness, but still that forgiveness to get to that period where that forgiveness is available still requires patience, right?

It still requires time. It still requires a long, longer term horizon. So Columbus doesn’t reward urgency, but it does reward staying power. Does that make sense? 

Laci LeBlanc: Yeah, it does. It sounds like, you know, buy and hold is the potentially the right answer in Columbus. 

Chris McAllister: Well, people tend to, you know, there’s people who buy rental properties and, and larger complexes in Columbus, you know, with you know, negative, uh, negative cap rates with the understanding that they’re gonna sit on that for 10, 15, 20, 25 years.

And at the end of that period, appreciation is going to make them a tremendous amount of money. And that’s why you have so many institutional investors, buying up in Columbus for the long term, the last few years. 

Laci LeBlanc: Yeah, so what kind of investors maybe would struggle in that area? Then 

Chris McAllister: any investor who needs an IM immediate return or needs to see immediate performance.

If your deal only works, if rents jump quickly, or if it looks like there’s room to raise the rents on the property you have and you bank on that. You’re just, it’s just a bad bet, right? So if you’re betting on rents, being able to go up dramatically or expenses are gonna magically come into line, you know, because, you know you’re the best operator out there, I gotta tell you, Columbus will feel frustrating.

I would say it’s not quite as extreme as, uh. What’s the Mike Tyson story? Everybody has a plan until they get punched in the face. Columbus is sort of like Mike Tyson, right? Everybody’s got the plan until they get punched in the face. So profitability in Columbus tends to show up later. So you need adequate money capitalization, and you gotta have the discipline to let the market do what it wants to do for you over time.

Laci LeBlanc: Yeah. Don’t sell when it’s low. Right? Like don’t get scared and get out when it drops. Dayton, on the other hand, behaves very differently. Talk to us a little bit about that market. 

Chris McAllister: Well, Dayton is about stability. It’s not about speed. You know, it’s a classic, a classic rust belt city, you know, it’s, it’s anchored by institutions like right Patterson Air Force Base, which has been a massive, you know, win for the area, gosh, my entire life.

And it attracts a lot of different types of businesses. It attracts some technology. And it is just great to have, that that giant government entity there now and, and hopefully forever. So there’s also a lot of, uh, respected healthcare systems. There’s still some solid manufacturing that goes on in the Dayton area and that type of that, that type of institution or economy tends to produce.

For, from a investor perspective, that type of economy, economy tends to produce longer tendencies, right? If somebody’s gonna rent a property, again, it’s not about, they’re not only just gonna be there for a year, two years, three years. If they find a property that works for their family that’s priced right, taking care of, they’re gonna stay there for a long time.

So again, longer tendencies, which translates into steadier cash flow. For the Dayton investor, but the other side of that is, it may take longer to lease the property, so there may be slower leasing velocity than say Columbus. And more modest rent growth. But again, you’re going to be able to buy that property for a lot less capital upfront than you would if you’re comparing Dayton to Columbus.

So Dayton rewards consistency. You know, Dayton investors tend to to get into trouble if they expect Columbus style acceleration, right? If that’s makes sense. That’s not what the Dayton market is built to deliver. It’s beautifully predictive, predictable, and beautifully boring. 

Laci LeBlanc: Well, you know, and I think, you know, this question really isn’t in our list.

It does kind of play a role. I think in the next question about what role does Dayton play inside a larger portfolio, but I, you know, what I’m hearing is, is what type of investor do you wanna be? Right? Yeah. What type of, you know, like, I, I’m hearing a lot of, you know, what is your risk tolerance, right?

What is your, what do you want the day to day to look like for you? Whether you’re working with a property management company or you’re self managing, you know, these different markets, not only you know, do you look at your portfolio and the charts and the graphs and the numbers and see big differences in how they operate, but also it, the first thought in my mind is, man, that sounds like a much better.

Place for me, right. As a property owner, because Dayton sounds like my place. Columbus sounds like a lot of work, Dayton sounds like, yep. Let’s get a tenant in there and keep ’em and, and that modest growth and I’m happy with that. So, as we talk about kind of what role Dayton plays inside your portfolio, maybe if you could address those, well 

Chris McAllister: we have, we have a lot of investors, landlords that we work with who have.

Multiple properties and they may have those properties, in Dayton, Springfield, Columbus, you know, I’ve, I personally have properties in Springfield, Columbus, and, and the Space Coast of Florida. And I have clients, you know, that I’ve sold properties to in those areas. So when you start thinking in terms of building out your portfolio and managing that, that risk over, not just geography, but time, that’s where.

You know, you think about a Dayton market, right? Dayton tends for these folks to act as a stabilizer, right? You may it, it may be a little more fun, a little more dramatic, a little more exciting. Let’s say in Columbus, you know, 70, 80 miles down I 70, but Dayton will smooth out your cash flow, right? It doesn’t excite it steadies, and when managed correctly.

You know, renewals, keeping those tenants year after year after year produces insane value over time and having those properties, buy ’em right, manage ’em right for the long term, a date and type. Of market reduces your volatility across the entire portfolio. So, you know, I guess we are speaking to people who have a long-term horizon and wanna, you know, buy several properties over the next 20, 30 years, or maybe they already have properties.

But I want people to be, you know, very intentional about the, about the markets that they’re buying in, and most importantly, understand the markets that they’re buying in. 

Laci LeBlanc: So what does that mean for Springfield? Springfield’s kind of associated with cash flow. What’s the trade off there? 

Chris McAllister: Springfield absolutely delivers strong cash flow, right?

You know, entry prices are lower. It, it’s easier to control your costs upfront, right? Especially compared to Columbus. But there is very little appreciation driven forgiveness down the line. It, it, it, yes, we, we’ve enjoyed massive increases in value just like everybody else, but it’s, it’s all relative.

And, and, you know, I really feel like those days are, are over. That was sort of a, a snapshot in time. But if it, when you buy a home in Springfield to rent it out, you’ve got to make sure that it, that you buy it right. You know, if it doesn’t make sense on the merits, right. If the, if the property doesn’t pencil out as they say.

The Springfield market will not save you, right? Liquidity is thinner. Vacancies hurt faster, mistakes carry more weight. Springfield doesn’t punish ownership. It punishes those investors who assume appreciation will do all the work and bail them out at the end, and that’s just not what Springfield is about.

Laci LeBlanc: So given that who should and maybe shouldn’t be investing in Springfield. 

Chris McAllister: Well, Springfield works for disciplined operators who understand the trade off between monthly cash flow, which is going to be honestly superior to anything that you’re able to pick up in, in, in Dayton and especially Columbus. But the, they understand what they’re doing, they understand that trade off, and your operation has to be sound, right.

You gotta have tight screening, you’ve gotta have, you know, solid rehabs that are well managed down to the last dollar. You can’t let. Maintenance, get away from you. Deferred maintenance will just destroy these a hundred, 120, 150 year old houses, right? We, we have very old housing stock. Just, just like a lot of Dayton, you know, but those operational disciplines, those standards, those are non-negotiable.

And investors, again, who are counting on time and appreciation too. To, fix weak execution. Those folks will find Springfield extremely unforgiving. 

Laci LeBlanc: So it feels to me like it’s just like this magic trifecta. But when you look at Columbus and Dayton and Springfield altogether, what’s the bigger picture look like there?

Chris McAllister: I just wanna make it clear, and I think the story does that markets aren’t just locations. Markets are behavior patterns. Columbus absorbs volatility, right? Dayton smooths out cash flow. Springfield magnifies decisions, good or bad. There’s not one of those three markets that inherently better than the other.

The problems arise when landlords manage, you know, one market as thinking that it’s gonna behave like another. You know, profitability comes from operational alignment with the market. It doesn’t come from wishful thinking or, or, or just uh uh, you know, optimism. 

Laci LeBlanc: Yeah, and I think there’s something to be said, you know, again, with, for working with a property management company kind of native to the area, right?

Yeah. I can just, I can only imagine trying as someone who not only maybe does live in the area but hasn’t lived there for. A long time. It’s really hard to know what the market cycles look like, and it’s really hard to, I think, understand locations where you can only really live in one place at once, right.

Where you don’t physically live. So, you know, I just, that’s what I’m thinking this whole time is man, that’s a lot of information gathered over a really, really long period of time by people who are really ingrained in this work day in and day out. Not only because they’re investing, but because you’re working with people you know who have investments.

Addition in addition to yours. So, you know, how do people, smaller landlords, people with maybe one or two properties, how do they, that are prob that maybe self-managing currently, how do they apply this thinking? 

Chris McAllister: Um. Before I answer that, I, I, I do feel that I should point out that, you know, we’ve been managing in Springfield for other people not just what we own since 2009, I believe is when Gretchen got her license.

You know, we’ve been at it in Springfield for, 15 years now. And, we will continue to work and invest in Springfield for years and years to come. But it, it took a while for us to internalize what Springfield was all about, and it took us a while to, to internalize what it was all about relative to the other markets that, that we work in and, and how that’s gonna be different when we start working, um, you know, in, in Cincinnati and, and Cleveland to the north.

But anyway, as far as smaller landlords, you know, even those with one or two properties. I just want anybody, any investor, every property sits inside of a broader behavior pattern, and when landlords judge performance in isolation, everything feels urgent and everything feels personal, right? If you understand the market.

And hopefully are able to make predictions right about the market, you know, that’s gonna allow you to plan for variance instead of reacting to it. And sometimes it’s not even, you know, actionable plans. It’s about adjusting your expectations and have an understanding of, of what is likely to happen based on, you know, how behavior differs from, from literally one city, one market to the other.

And that kind of knowledge. Is incredibly powerful and that, and it, that and the, the planning that goes into how you’re going to purchase and operate those properties, that tends to compound too. So when you have your expectations set appropriately, when that knowledge really becomes, personal power.

Your stress starts to drop, you start to make better decisions, and, and those returns tend to become more durable for, you know, over time. Right. You know, it, it really does come down to understanding what’s happening versus succumbing to, you know, we’ve talked about this before, but I always call magical thinking.

Laci LeBlanc: I’m a big fan of magical thinking, but you know, figuring out how it’s gonna translate to the real world is the real challenge. No, I think all of that makes sense to me, and it just reiterates, the value I think of looking at your investments from 5,000 feet, right? The, from the portfolio level, um, and having partners that do that.

What is your final takeaway for folks listening today? 

Chris McAllister: You know, the most profitable investment, the investors that we work with, you know, the, the ones that, that make money month after month, year after year, year after year. They’re not chasing markets, they’re building portfolios, even small portfolios that will behave well when conditions change.

In Ohio when you understand. The state properly, when you understand the different markets property properly, you really get to capitalize on, on what’s possible, right? So again, it’s not about chasing markets or the best market, it’s about choosing a market, understanding the type of market you’re getting into, you know, setting up your expectations accordingly, and hanging in there for the long term.

Laci LeBlanc: And choosing the right people to work with just Yes. ’cause that’s my job. That’s my job here. 

Chris McAllister: Yeah. That’s, and again, these are our core markets and you know, we are looking to expand throughout Ohio over the next, uh, two, three years. But, you know, these are the ones that we’ve been working in since 2009. We know them.

We love them. We invest here ourselves. And, and we just want, I just personally want everybody to, to understand what makes Ohio. A great place for real estate investors. So if you’d like to learn more about how we work with investors like you, you know, check us out@investwithroos.com. And if you’d like to go deeper into into the subject, I want you to check out our new blog post called Investing in Ohio Isn’t safe, it’s Predictable, and That matters@learnwithroos.com.

Thank you Laci. 

Laci LeBlanc: Thanks Chris. 

Chris McAllister: And thanks to everybody for listening. See 

Laci LeBlanc: you next time. Bye.