Real estate investing has actually reached a peak in recent years. Stemming all the way back from the real estate crash of 2008, many investors saw an opportunity to taken advantage of how cheap land had become because of the collapse of the market and financial system altogether. That trend has continued all the way into today and investors are still flocking to invest in good, cheap land. One of the best places to invest at the moment is actually Michigan.
The state has been staging a comeback since the blow 2008 dealt it and has been winding up for an explosion in commerce and goodwill. One of the best cities to invest in is, as you would probably expect, Detroit. One of the largest and most diverse cities in the state, Detroit is poised to make a big return in the national culture and conversation.
Arguably the most important factor to look for in a city you want to invest in, the growth of a city is critically important to many real estate investors. The key is to see into the future and accurately be able to gauge the amount of growth that will take place and how this growth will affect other cities and areas near your investments. In other words, real estate investing is all about finding a balance between demand and existing value.
Jumping into a popular area means you’ll probably end up overpaying because everyone has already gotten a slice of the pie. Areas with high growth potential are those which are currently overlooked but will quickly be moved to once they start to gather a following. Detroit fits this description to a tee. Although the 2008 financial crisis hit the city hard, there’s some early, “smart” money flowing into the city which is starting to increase its value and make it an attractive destination to move to.
Jobs Added or Planned
One of the functions of growth is the number of jobs that will eventually be added, or which are planned to be added to the city you’re investing in. Obviously, the more jobs there are in the city, the more people will move there, and the more jobs will need to spring up to meet increasing demand. The type of job the city is most known for is important as well, as high paying and reliable companies attract educated, safe, and reliable residents and clientele.
For example, companies like Amazon are establishing branches all over the country, and cities are clamoring to be chosen for an Amazon hub in order to attract highly educated, well-paid, resilient, and innovative talent. The more talent that’s brought in, the more businesses thrive and the smoother the economy moves for that local region. Detroit is currently adding jobs at a rapid pace and looking for young start-ups to help reinvigorate the city.
Vacancy Rate and Home Prices
The final item on the checklist you should always be wary of is the vacancy rate and the prices of current homes in the area. For example, an area with a high vacancy rate is rarely a good area to invest in, real estate-wise. Houses that are already overpriced in the area will also be a burden to your business and decrease the number of residents you’ll be able to persuade to buy from you. Even when the local or regional economy is running on all cylinders, a high vacancy rate will make things very difficult for you in the long run.
Michigan Housing Market
One of the alluring characteristics of Michigan is the affordability of housing in the area. The median price for a house in Michigan is only $302,420 as opposed to the national median of $311,254. This affordability already makes moving to Michigan and therefore investing in the real estate market there, an attractive proposition. In addition, Michigan is in the top ten states with the lowest cost of living, making it a great investment opportunity for both beginning real estate investors and more experienced investors. Finally, Michigan and Detroit have one of the strongest rental markets in the country. All of this information combines to create a great place to invest in real estate and attract eager and reliable buyers for your properties.
In past decades, Michigan was primarily a hub for the national auto industry. This was a prestigious title, but the lack of diversity in economic output made it difficult to recover from the 2008 financial crisis. Today, however, Michigan is diversifying its output; Detroit and surrounding cities are leaning into the technological boom, starting industries and manufacturing, agricultural production, and tourism.
This diverse set of economic output has strengthened the resolve of both the city and state. The coronavirus pandemic slowed growth for a few months, but the state and city are recovering nicely and are back on track to make a stunning comeback in the early 2020s. Surprisingly, Michigan is listed as one of the top thirteen states in terms of economic output and an impressive number four state in innovation potential.
All of the above information is well and good, but it’s ultimately worthless if there’s no money to be made. However, Michigan and Detroit real estate are both highly profitable opportunities that will pay back the investment in as soon as a few months. Detroit is a strong rental market, meaning you can make your money back through rental properties which are affordable to buy and can be rented out for a reasonable price.
The demand for Michigan housing is increasing and is accelerating at a surprisingly high rate. Currently, there are very few homes for sale on the Michigan market, creating a greater demand for real estate investment opportunities. Home prices are moderately more expensive than rental properties as well, meaning those who move to the city will, by and large, be looking to rent rather than buy a house of their own.