Detroit Investment Property for Sale - 2023 Rental Home Appreciation
The Detroit real estate market presents a great investment opportunity for real estate investors. The reason? Low median listing prices, steady appreciation rates, and an influx of large corporations in metro Detroit. In other words, the City of Detroit offers affordability and growth, often resulting in high demand for rental properties.
The Detroit housing market is known for its fixer-uppers that require extensive renovations. Fortunately, their low prices have attracted real estate flippers to the city, so there are also many turnkey properties for sale. This, in turn, helps attract renters to Detroit and increases property values.
According to Realtor, the median listing price for a home in Detroit, Michigan, is just $71 per square foot, with a median sale price of 80,000. The median rent is $1,200 per month. The most recent Freddie Mac House Price Index (FMHPI) for the Detroit-Warren-Dearborn MSA shows a +45.9% change in house prices.
The Detroit area offers prospective renters a low cost of living, a strong sense of community, and job opportunities. Whole Foods, Microsoft, Google, and Pinterest have all opened offices in The Motor City.
Detroit real estate investing has the potential to yield significant returns for investors looking to add a Detroit property to their portfolio.
Detroit's Attractive Housing Market
Detroit is home to many vibrant neighborhoods and suburbs, each with its distinct character. Some of the best places for rental properties in the Detroit area include Ann Arbor, Corktown, Dearborn Heights, and Warren.
- Ann Arbor - Ann Arbor, Michigan, is a suburb of Detroit. It's located west of the city along I-94. It's home to the University of Michigan and several museums. It attracts residents who want to live in a city with a small-town feel that's an easy commute to downtown Detroit. The median listing price in Ann Arbor is $268/sqft, and the median sales price is $471,000. The median rent is $2,230/month.
- Corktown - Corktown is a historic district located west of downtown Detroit. It's the oldest Detroit neighborhood and home to the Old Michigan Central Station. Michigan Avenue, the neighborhood's main thoroughfare, is lined with restaurants, bars, and shops. Corktown's real estate options include apartments, duplexes, single-family homes, and undeveloped lots.
- Dearborn Heights - Dearborn Heights is a bedroom community located west of Detroit between I-94 and I-96. It attracts families who want single-family homes near the city without the hustle and bustle. Home prices are higher in Dearborn Heights than in the city of Detroit. The median listing price in Dearborn Heights is $153/sqft, and the median sale price is $159,900.
- Warren - Warren is the third largest city in Michigan and metro Detroit's largest suburb. It's located north of the city along I-696 and Highway 53, which makes it easy for residents to commute into Detroit. The median listing price in Warren is $141/sqft, and the median sale price is $169,900. The median rent is $1,350/month.
Rental Home Appreciation in Detroit
Detroit has a solid rental market for a few reasons. First, the cost of living in Detroit is approximately 18% less than Chicago's, making it attractive to people looking for an affordable big city to call home.
Second, the lower cost of living means affordable rent. The median rent is $1,200 per month in Detroit. Third, people are starting to move back to the city, driving up rent demand.
According to the latest U.S. census, roughly half of the homes in Detroit are renter occupied. Combine that with the low prices of single-family homes and an appreciation rate of over 45%, and a Detroit rental property could be a good investment.
Economic Growth in Detroit
Detroit was once the epicenter of U.S. car manufacturing. When the auto companies moved production overseas, the Motor City suffered tremendously. But it's currently going through a revival.
That's why many major companies have decided to open offices in metro Detroit. The most notable are Whole Foods, Microsoft, Google, and Pinterest.
Manufacturing is still Detroit's primary industry. Finance and information technology or the city's second largest. These industries attract young professionals to the city.
Detroit is a city often overlooked by real estate investors because of its past. However, Detroit offers a tremendous real estate investment opportunity for investors who want to acquire a rental property at a low price with solid appreciation and tons of potential.
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