From the real estate market and appreciation to the best types of investments, FIRE Realty Team talks Detroit Investment Properties.
Let’s Paint a Picture
Unfortunately, we’ve all heard of a few flops when it comes to Detroit investment properties. Typically, it goes something like this...
Someone sees or hears that Detroit has very cheap properties
Said someone reaches out to an agent, property manager, or investor guru who confirms, “yes, we have very cheap properties.”
A deal comes on the table for a $20K house that is a great deal and just needs a few minor updates. Yet, can reach an ARV of $100K.
The client jumps on it only to find out the sewer line is broke, there’s a leak all the way from the roof to the basement, nobody wants to rent in the area, and there’s even more work than originally thought.
$50K is spent fixing it up, but it’s okay as long as the ARV is $100K, right? Unfortunately, when the client goes to sell, a different agent informs the house is only worth $60k in its best condition due to location.
Ouch. It happens.
These are the stories that scare people away from Detroit. However, it’s not all bad. When you take a further analysis, and understand where and how to invest, the Metro Detroit area can be one of the best markets to invest in.
Partnering with the Right Real Estate Investment Company
FIRE Realty Team takes a deep look at the analytics, market, and appreciation. Our team takes the guesswork out of considering an investment property. Reaping the benefits of Detroit real estate properties revolves around the knowledge of the market and appreciation.
DETROIT REAL ESTATE MARKET
Detroit is home to well over a dozen fortune 500 companies. Hospitals are a well known focal point of choosing a market to invest in. Metro Detroit happens to have a very large and sustained, growing, hospital and medical industry. Not to mention the still strong manufacturing industries that bring strong blue collar neighborhoods. It just so happens (by no accident) that some of our favorite markets to invest in include a nearby hospital, or auto maker plant, or both.
Real Estate Appreciation
When investors think “appreciation” they think coastal or mountain towns. However, real estate is an amazing thing because you can just focus on the data. Sure a city like Denver might have insane appreciation, but with a $400k entry price point, that’s just not feasible for the average investor. Real Estate has appreciated at 3-4% across the nation for the past 100 years. It will likely do so for the next 100 years. Natural population growth, demand, and inflation continue to drive these up.
Many of the markets in Metro Detroit have 10-20% appreciation over the past 10 years. Looking at this data, FIRE Realty can easily help you analyze and make an educated decision.
What are the Best Properties to Invest In?
Some of the best investment properties in all of the the Metro Detroit Area, Michigan, and the US itself, reside in the “Ring Cities” or closing bordering suburban cities of Detroit Proper. These cities have an outstanding balance of Purchase Price, Price-to-Rent Ratio, and Location. Cities include: Warren, Eastpointe, Harper Woods, Clinton Twp, Roseville, Lincoln Park, Wyandotte, Taylor, Inkster, Westland, Redford, and quite a few more.
These cities have prices around $100k, Rents well over $1000 and they’re strong blue-collar neighborhoods with parks, hospitals, larger industries, or a combination of industries. Typically, these Detroit property investments work out to be double-digit ROI and a few hundred dollars of cash flow per door.
For years people have been saying “Detroit Isn’t a good place to invest in.”
Meanwhile, if you take a look at just Redford, MI appreciation chart (reference below), investors that bought 10 years ago have almost 5x their money in 10 years. A 3-bedroom house in Redford rents for about $1300-$1600 a month. There are many markets/cities in the Metro Detroit area with similar-looking trends. Investors that invested near Detroit have done pretty alright.
