YOUNGSTOWN, Ohio (WKBN) — There is a way to cash in on the drilling boom without worrying about mineral rights: Real estate.
A WKBN investigation showed that renters are making big money and the average consumer can make money as well.
Rental property is a popular part of real estate again.
“A couple of years ago it wasn’t. But the past eight properties we have filled have all been from the oil and gas related industry,” said Chad Cromer of Community First Real Estate.
The rental income is higher than it was three years ago. The tax write-offs are good. But the driving force remains: Demand is high, supply is low.
“We purchased a duplex for $52,000 and rented each side for $800 a month. It’s over a 20 percent return on your money,” Cromer said.
That means now a property owner could cover the mortgage and taxes, and still put away a couple hundred dollars a month.
Chris Scenna was extremely frustrated his Boardman place wouldn’t sell.
“That was one of the biggest things. I was $15,000 off comps [comparable properties] in the neighborhood and I’m getting nothing. What do I do now? It was the right thing to do,” Scenna said.
Renting out his single family home solved a big problem and has turned two mortgages into one.
“I’m not driving a Cadillac. Putting a couple $100 in the bank. Note’s been paid,” Scenna said.
He has even been able to establish an account for making upgrades.
Ryan Dewberry had a 2,000-square foot home on the market since May.
“The house was listed for $90,000 in 2002, bought for $70,000. Twelve years later, begging for someone to take it at $55,000 and still can’t sell it,” Dewberry said.
He didn’t want to take a $10,000 out-of-pocket loss if he sold. He found a renter in February.
“What we’re seeing. I’m in hotel industry. We see guys coming in every day. It’s in its infancy. Might end up with a housing shortage in this area,” Dewberry said.
That would certainly lead to a reversal and higher home prices. But it’s not without risk.
“From looking into the Dakotas, same oil & gas bust. Overbuilt and property dropped. But if I make back my money back in five years and property drops 5 to 0 percent, I didn’t pay for that $40,000. Somebody else did,” Scenna said.
How popular has renting out a home become? Two recent employees of 27 First News who left town for other jobs couldn’t sell their properties and now rent them out. They both found their renters on the first day the properties were listed.