Detroit was once the Mecca for real estate investors, but is it still the best deal in real estate?
Flashback to 2009. This was the height of the foreclosure market and properties were available for pennies on the dollar.
Investors from all over the world we’re purchasing properties in Detroit in droves.
Fast forward to today. There is not as much inventory on the market for cheap but there are still great deals in the city of Detroit.
How is this possible?
Well, here’s something that many don’t know:
When the housing crash took place, there were many properties that were left in a dilapidated state and they needed a lot of repairs.
Unless an investor had available contractors or construction crews to rehab the properties, they were sitting on a lot of unimproved inventory.
Many investors bought tons of property, but they couldn’t do anything with those houses!
Today, there are still several rental properties that have been completely rehabbed and have long-standing tenants in them. While the cheap inventory may not be available, good investment inventory is still available.
Here’s a great example:
We recently sold this 3 bed brick colonial to an investment group from South America.
Here are the numbers:
Purchase Price: $35,000
Repairs: $7,000
Total : $42,000
Monthly rent : $750/mo
*long-term tenant
Not the cheapest of the cheap, but still a great investment property.
What else makes a good investment?
1. Area- by far this impacts the property value more than anything else. A great property will still lose money if it’s in a poor area.
2. Condition– tenants that remain in great properties seek solid, well-maintained homes. You don’t need the most luxurious improvements, but make sure everything is up-to-date and in good working order.
3. Good Tenants– great properties attract great tenants. However, investors need stringent screening in place to prevent delinquent payments or even worse, professional scam artists.
The average rental properties inside of the city should cost anywhere from $45,000 to $60,000 depending on the area and rental income.
Let us know if we can help you find excellent investment properties.
Good luck and happy investing!