Buying a Rental Property in Metro Detroit?

How to Choose Between Single-family and Multi-family Investment Properties

The big difference between single-family investments and multi-family investments in and around Metro Detroit is: The end goal.

Once you understand how long you will hold your investment property, and what is the eventual exit strategy for it, choosing the right kind of property becomes easier.

Entering the Metro Detroit real estate market requires a significant time and monetary commitment. Determining the purpose for purchasing rental property determines whether one should invest in a single-family or multi-family dwelling.

Short Term Versus Long Term Investments



For investment purposes, a multi-family dwelling provides the owner with more potential rental income than a single-family dwelling. However, a single-family property can be more quickly converted and rehabbed into a retail property and sold for a higher price.

Setting the investment time frame up front will help you know which may be more feasible.

If you plan on holding on to the investment property for 5 years or more, multi-family properties will give you excellent income and long-term tax benefits.

But if your goal is only to rent for 3-5 years and move on to larger investments, choosing a single-family may be a better strategy.



Investment Considerations



Your investment budget also plays a huge part in the decision process in Metro Detroit.

This is the Midwest- home of snow and ice for approximately nine months out of the year (kidding….ok maybe not).

Make sure the property you’re considering has adequate heating, cooling, roof, and electrical systems in working order. This may present a larger budget than you initially estimate, but these are essential items and cannot be overlooked.

Also, characteristic of the Midwest, we have lots of trees in residential neighborhoods with limbs and tree roots that go deep into the plumbing and sewage lines.  These must be cleared and those systems must be in good working condition to avoid impending disasters.

Larger properties like most multi-families will sometimes require double the budget, so that may limit you to single-family homes for quicker and easier property ramp-up.

Consult A Reputable Agent

Before making an investment, consult a licensed and experienced real estate agent familiar with area rentals. The agent should provide information regarding long-term versus short-term available rentals. In addition, if there are deed restrictions, the agent should provide the prospective buyer with the necessary information.

If you need help locating an investor-friendly broker, please give us a call:


Letitia Patterson
myrealestateteam1@gmail.com

248.905.1531

Or just click here: https://www.detroitinvestmentpros.com/contact-us/

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