When it comes to real estate investment, so-called “flyover country” should be anything but.

1) Economies are built for stability.

While no economy is immune from volatility, many Midwest communities are more insulated than most.

Think about their core industries—healthcare, financial services, advanced manufacturing, food processing and even agriculture.

These products and services are core to consumers’ day-to-day lives, and economies built around them tend to weather the inevitable ups and downs of the economy. In contrast, the coasts attract more risk-takers—everything from startups to jobs tied to the fortunes of Wall Street. Investments in these areas may carry additional risk because of it.



While the Midwest certainly is home to its share of Fortune 500 and fast-growing companies, its bread and butter is small businesses and family-owned businesses. These companies often are nimble, make decisions with the long term in mind and give back to their communities.

2) Residents are “common cents” smart.

For multifamily investments, tenants’ financial situations are key to achieving positive returns. In the Midwest, individuals tend to be more financially literate and financially conservative.

For instance, a 2019 study found 68 percent of Midwesterners had increased their savings or saved the same amount as the prior year. More than half—56 percent—have a retirement account, and almost two-thirds have a “rainy day” or emergency fund.

Just as with the economies themselves, Midwest residents are known for being hard workers who gravitate to stable occupations. Tenants in multifamily properties likely will include nurses, teachers, manufacturing workers, even students. Their more stable financial situations can lead to on-time rent payments, renewals and satisfied investors.

3) Investor competition is less, while yields can be superior.

Even during the pandemic, the Midwest performed well for property investors thanks to its more conservative approach and prioritizing cash flow.

CBRE named the following markets among the best in the country in 2020: Cincinnati, Cleveland, Columbus, Detroit, Indianapolis, Kansas City, Louisville and St. Louis.

And while the current environment has produced significant interest in property investment, investors will find the field a bit less crowded the closer they go to the center of the country. Even more encouraging: Yields in the Midwest tend to be higher than in other areas of the country, thanks largely to the characteristics above.

4) The “Midwest migration” is a real thing.

The line of moving vans heading out of certain states along the coasts is not an exaggeration—and many of them have been heading to the Midwest.

Recent U.S. Census data showed a huge spike in movement out of the nation’s 56 major metro areas with populations exceeding 1 million, and higher population growth in smaller metro areas. Non-metropolitan America showed the biggest annual population increase in more than a decade.

The pandemic, coupled with historic inflation, is combining to drive residents to the middle of the cost of living, and in some cases, a political climate that aligns more closely with their values.

In Cleveland, for instance, the city ranked fifth in the U.S. for net new resident gain during the pandemic.

That means strong demand for housing in the Midwest, which has experienced extremely high occupancy in its multifamily sector.

5) Communities are designed for livability.

Once people move to the Midwest, they tend to stay. Credit a combination of high-quality schools, safer neighborhoods, less congestion and pollution, and outstanding quality-of-life amenities.

The Midwest is filled with lakes and rivers for recreation, award-winning arts organizations and destination parks.

Residents love that they can find world-class healthcare, a huge range of higher education opportunities and diverse, more affordable housing than elsewhere around the country.

It all equates to long-term residents who make the Midwest a winning investment for all.

With its roots in Ohio and a growing portfolio of 14,000+ apartment homes in suburbs across Ohio, Michigan, Indiana, Illinois, Kentucky, Iowa, the Carolinas and soon, Nebraska, Redwood is well-positioned for continued growth and success in the Midwest. To learn more about investing with Redwood, call 216.360.9441 or fill out a contact form.

The information contained in this presentation is provided to you for informational purposes only and is not to be used or considered as an offer or invitation to sell or issue or any solicitation of any offer or invitation to buy securities in a company, or any advice or recommendation with respect to such securities. An investment in a Redwood project is limited to only those persons who qualify and can verify their status as an “accredited investor” under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). Investment opportunities in a Redwood project are speculative and involve substantial risk. You should not invest unless you can sustain the risk of loss of capital, including the risk of total loss of capital. Certain statements in this presentation constitute "forward-looking statements" within the meaning of the Securities Act. Any statements contained herein that are not statements of historical fact are deemed to be forward-looking statements. It should not be assumed that future investments in a company, project or business transactions with Redwood or any affiliate will be profitable or will equal or exceed the performance of previous apartment neighborhoods developed and managed by Redwood. Investors should consult with a professional investment advisor that is aware of the investor’s circumstance before selecting an investment. Investments in a Redwood project are illiquid, long-term investments that cannot be sold or exchanged.