The city of Detroit has seen a resurgence in recent years, attracting investors and developers to its thriving economy, growing downtown, and expanding population. While many areas of Detroit are still in need of improvements, some even dangerous, there are many areas that can be an excellent source of appreciation and cash flow. If you’re considering investing in Detroit real estate, this guide will walk you through the process and provide helpful tips and information about how to invest in Detroit Real Estate.
Buying Investment Property in Detroit
When buying investment property in Detroit, it’s important to consider many different aspects. Detroit has many nuances when it comes to investing. Things like location, age of the property and many other factors can all have drastic effects on your property’s price and how difficult it will be to maintain as a landlord. Here are some the most important things to consider when investing in Detroit rental properties.
Look for properties in areas with growing populations, increasing home values, and lower crime rates. There are many neighborhoods in Detroit with solid reputations. It’s very important to get familiar with the city on a neighborhood level.
Single-family homes, multi-family homes, and commercial properties are all good options for investment in Detroit. The city has a variety of options depending on your goals and location within the city.
Properties that need repairs or renovations will require a significant amount of work, but also offer the potential for a higher return on investment. Many areas of Detroit are still rundown. Some of these types of properties are excellent opportunities for rehabs, others will likely just be a money pit in an area that hasn’t turned around yet. This goes back to knowing the city on a very thorough level. If you’re unsure about this, working with a turnkey company in Detroit is an excellent option.
Research financing options, such as conventional mortgages, hard money loans, or owner financing to find the best option for your budget and investment goals. When it comes to how to invest in Detroit real estate, it’s important to have fallback options. Many national lenders are skeptical of lending in Detroit, so it’s important to be prepared and have more than one option. Knowing local lenders who specialize in Detroit is also very helpful.
How to Find Rental Properties to Buy in Detroit
Finding rental properties in Detroit can be a lucrative investment opportunity for those seeking to take advantage of the city’s revitalization efforts, growing population, and thriving economy. Detroit is home to a diverse range of residential and commercial properties, offering investors a variety of options for rental income. However, navigating the rental market and understanding the city’s rental property requirements and ordinances can be complex.
Here are some the best places to find rental properties in Detroit:
- Detroit Turnkey Companies: Turnkey companies do a lot of the dirty work by finding properties, rehabbing them, filling them with a qualified tenant and then selling them to investors. It’s a great way to find Detroit turnkey rental properties.
- Online search: Websites like Zillow, Realtor.com, and Redfin allow you to search for rental properties based on specific criteria, such as location, property type, and price range.
- Real estate agents: Work with a local real estate agent who has experience with rental properties in Detroit.
Auction sites: Online auction sites like Auction.com and Hubzu can be a great place to find deals on rental properties in Detroit.
City of Detroit Rental Property Requirements and Ordinances
The city of Detroit has detailed requirements for owning rentals. There are also additional considerations for historic neighborhoods and properties. It’s very important to be familiar with the laws and requirements. We always recommend consulting an attorney or the city directly to be sure you’re in full compliance.
Here are some of the most common requirements to expect:
- Rental licensing: All rental properties in Detroit must be licensed by the city and pass an inspection.
- Lead-based paint: Properties built before 1978 must be checked for lead-based paint, and landlords must provide information about lead-based paint hazards to tenants. Most properties in Detroit are older, so this is very important.
- Smoke detectors: All rental properties must have smoke detectors installed and maintained in working order.
Passing Detroit Rental Property Inspections
You can read more about the specifics of a Detroit rental inspection on the city website. There are plenty of things you can do to be proactive about passing your inspection. Be sure to consider all of these things before your rehab to ensure you don’t overlook anything.
To pass a Detroit rental property inspection, make sure to:
- For current rentals, keep the property in good repair, with no broken windows, leaky roofs, or other safety hazards.
- Ensure that all appliances, such as ovens, refrigerators, and hot water heaters, are in working order.
- Make sure that all smoke detectors are installed and working properly.
- Work with licensed contractors to ensure big investments like HVAC, electrical and plumbing are all up to code and in good standing with the city.
- Verify all safety features and potential hazards are addressed – good locks and doors, hand rails, no trip hazards etc.
Is Buying Property in Detroit a Good Investment?
Investing in Detroit real estate can be a good investment if you do your research and make informed decisions. The city’s uptick in home values and activities around the city make it a great opportunity to acquire and hold real estate. The cash flow can also be great due to the walkable areas.
However, like with any investment, there are risks involved. It’s important to carefully consider the condition of the property, the location, and the potential for rental income before making a purchase.
Wrapping Up – How to Invest in Detroit Real Estate
In conclusion, investing in Detroit real estate can be a lucrative opportunity for those who do their due diligence and make informed decisions. With its growing population, expanding downtown, and revitalization efforts, Detroit is a city worth considering for investment. When you’re looking for rental property in Detroit, make sure to exhaust your options through realtors, turnkey companies, auction sites and more. There are many ways to find good investment opportunities. Also remember that Detroit is unique and requires a thorough understanding of where your property is located and what your goals for the property will be.
Hopefully this article answers all of your questions about how to invest in Detroit real estate. Contact us if you need help buying a turnkey rental in Detroit. We specialize in helping investors find profitable real estate opportunities throughout the city.