Detroit is back. After being one of the hardest hit cities by the Great Recession, the city is rebounding with a vengeance.
It is not only out of bankruptcy, it is now issuing bonds backed by its own credit. New development is pouring in. The city’s business community is growing, most of all in its real estate sector.
There’s so much confidence in Detroit that NBA Cleveland Cavaliers owner Dan Gilbert has put $5.6 billion into Detroit properties through his real estate firm. Why such optimism?
The short answer is lots of opportunities. Only a small fraction of the city is currently gentrified. There are huge pockets of the city where investors can make huge returns.
But you have to know where to look. Profiting in real estate requires expert knowledge of the area, even for experience real estate investors. That’s why it’s always best to work with a professional realtor. They know local market conditions and can tell you which neighborhoods are a good investment and which ones to stay away from.
If you’re looking for Detroit investment properties, get connected with a Clever Partner Agent to talk about the best opportunities. They’ll be able to tell you how to take advantage of the rejuvenation of Motor City and its impact on property prices in the area.
Current Market Conditions
According to data from Zillow, the overall median home value for Detroit-Warren-Dearborn is $162,200. It increased by 6.9% last year and it’s continuing to climb this year. But the median home value is not the entire story of Detroit real estate.
While the city is well on its way to recovering from the 2008 market crash and auto industry job losses, you can still find many foreclosed properties for a steal. But don’t rush to buy unless you know the neighborhood. Buying a home in a community that will stay rundown into the future is just a waste of money, even if the house price is outrageously low.
Speak to a real estate agent about Detroit’s unique housing climate. They will be able to tell you where to spend your investment dollars so that you get the biggest profit when you sell. There are certainly many properties that can give you a good return on your investment.
Now is definitely the time to start building or expanding your portfolio. But you should be cautious about where you buy. Some sections of the city are doing better than others.
The Five Best Neighborhoods for Investors
This community is just a short commute from downtown. It isn’t seeing the same dramatic growth as other parts of the city, but that’s because it remained relatively stable throughout the economic decline. Investors should note that the city is pumping public funds into Fitzgerald to turn publicly-owned land into parks and green space.
There are also plans to renovate more than 100 vacant or abandoned homes, fix up streets, and develop more businesses in the neighborhood. All of this is good news if you’re looking for a changing community where you can invest in multiple properties.
West Village is near the Island View neighborhood and Indian Village, and the community is known to attract young professionals and urban hipsters who like its trendy feel. It also has a family-friendly atmosphere.
This is a good area for investors because, like Fitzgerald, this is another neighborhood that the city plans to invest in. The neighborhood has many fixer-uppers that can be remodelled and repaired. Your investment property will also be an easy sell in a neighborhood that’s known to attract home buyers looking for a safe and affordable community.
North End is less than 15 minutes away from Detroit’s downtown and is the next big area due for development. That means the time is right to invest in this neighborhood while home prices are still at rock bottom. Local non-profits are helping to tear down hundreds of homes and are pushing for construction of new single-family housing.
This is Detroit’s historic district and is located west of the city’s downtown. The neighborhood is a mix of residential and commercial properties.
It has seen a number of revitalization projects over the last 15 years but was hit particularly hard when the economy sank in 2008. In 2016, the neighborhood got a big boost with the revitalization of the Trumbull & Porter Hotel and the arrival of several multi-million dollar businesses. Ford also began a major redevelopment push in the area in 2017.
If you’re concerned that you may have missed the boat when it comes to investing here, don’t be. With the right realtor, you can find some hidden gems.
This is one of Detroit’s fastest growing neighborhoods. Ten years ago, it was lined with warehouses and factories along the Detroit River. But now the area is filled with lofts and young professionals.
It’s not uncommon to find a loft selling for $300,000 in this neighorhood. But there are still some parts of the community in the north that have yet to fully appreciate.
Where to Find Local Investment Property Listings
There are plenty of online sites where you can begin your research into investment properties in Detroit.
But you should be aware that when you contact agents for homes on these site they are not working for you. They are typically the seller’s agent and they are representing their interests.
You may also want to check listings on Craigslist or auction.com. But always remember that investing in real estate should not be a roll of the dice. If you decide to purchase a foreclosure, make sure you understand all of the costs associated with the repairs you will have to make.
If you purchase through an auction, you may not be able to do a thorough inspection. You could end up spending thousands of dollars on a property that you can not sell or rent.
Find a Great Real Estate Agent
Whether you’re an experienced investor or new to real estate, it’s essential to work with a professional agent. Clever Partner Agents know local market conditions and can help you determine where the best opportunities are.
Clever partners with top real estate agents from major companies like Keller Williams, Century 21, and RE/MAX. They are all full service and have the latest data. That means you can be confident you’re fully informed about market trends throughout the state so that you can target your investment dollars for maximum return.