2017 Market Overview
The largest city in the state of Michigan, Detroit is probably most well known as the city where Henry Ford pioneered the first assembly lines used to manufacture automobiles. Although the Motor City was hit hard by the recession, things are looking way up for this real estate market, in part because of the following three factors:
- Two billionaire families have committed to turning around the blighted city and appear to have succeeded. The downtown area has been totally revitalized and many of the dilapidated foreclosures have been torn down.
- Detroit is home to “The Big 3” major automotive companies in the U.S. and Canada (General Motors, Ford Motor Company, and Chrysler), and the headquarters/major corporate offices of 100 Fortune 500 companies, including: Penske Automotive, Quicken Loans, Kellogg, Whirlpool, and Walmart.
- And yet, prices are still extremely affordable in this area – it’s still possible to purchase fully-renovated, turnkey homes in Detroit for around $80,000 (as low as $50,000 in some cases).
Median Household Income:
Median Home Price*:
Median Monthly Rent*:
Estimated Monthly Cash Flow:
Why Invest Here?Detroit offers investors the opportunity to purchase three bedroom turnkey properties for as little as $69,000, and rent them for a median 1.29% of the purchase price every month. These are great positive indicators for investors interested in affordability, cash flow, and equity growth.
Detroit Trends & Statistics 2017-2018
In this section, you’ll learn about the top three factors that make Detroit one of the strongest real estate markets today, including: affordable home prices, strong monthly rental income, and equity growth potential. Explore Detroit’s housing market, population, and employment trends in the tabs to learn more.
Detroit is more affordable than many other U.S. markets today
- In January 2017, the median price of three bedroom homes in the Detroit metro area was $166,000. This is 12.65% lower than the national average of $187,000.
- However, in the Detroit neighborhoods where RWN members invest, the median price of three bedroom homes was only $69,333 (also in Jan. 2017). This is 63% lower than the national average.
- This shows us that real estate in Detroit is more affordable than many other U.S. markets today. This is especially true in the Detroit neighborhoods where Real Wealth Network members are investing today.
It’s possible to generate more monthly rental income in Detroit than most other U.S. cities today
- In January 2017, the median monthly rent of three bedroom homes in Detroit was $1,359, which is 0.82% of the purchase price of $166,000. This is slightly higher than the national price-to-rent ratio of 0.74%.
- In January 2017, in the Detroit neighborhoods where RWN members invest, the median monthly rent for three bedroom single family homes was $892. This is a whopping 1.29% of the purchase price, which is significantly higher than the national average of 0.74%. It’s also higher than any other RWN featured market today.
- This shows us that Detroit offers investors a strong opportunity to generate cash flow at a significantly higher price-to-rent ratio than the national average.
Detroit home values have been appreciating rapidly
- In January 2012, the median price of three bedroom homes in Detroit was $100,000. Over the next five years (Jan. 2012 to Jan. 2017), three bedroom homes in Detroit appreciated by a whopping 66%. During the same period, three bedroom homes increased only 28.97% nationwide.
- Considering home values are still so far below the national average, it’s likely this growth will continue. This indicates that investing in Detroit offers a good chance for equity growth.
The median monthly rent in Detroit has been rising consistently over the last five years
- Between January 2012 and January 2017, the average rent for three bedroom homes in Detroit increased by 13.82%, which is just slightly below the national average of 14.11% (during the same period).
Since 2010, Detroit’s population has only grown by 0.15%
- Between 2010 and 2016, Detroit’s population only increased by 0.15%. During the same period, the national population grew by 3.93%.
- Despite very slow growth, the Detroit metro still outperforms similar markets at attracting educated millennials; this is likely due to a number of research universities in the area, including Wayne State University.
- Detroit also has a few billionaires on their side, including Dan Gilbert (Quicken Loans CEO) and Mike Ilitch (Owner of Little Caesars Pizza Chain, the Detroit Red Wings, and the Detroit Tigers) who have pledged over $4 billion to help with the city’s revitalization efforts.
- All this attention from millennials and billionaires is a good sign that future growth in Detroit is likely.
- In the past year, the number of jobs in Detroit has grown by 1.84%, which is less than the U.S. annual job growth rate of 2.31%.
- Although fewer jobs were created last year than other U.S. cities, 1.84% is still solid growth. And with the revitalization efforts already underway, we can likely expect a renewed increase in new job creation in the next few years.
Detroit is Very Affordable
- In the Detroit neighborhoods where Real Wealth Network members invest, it’s possible to purchase R.E.A.L. turnkey property for 63% less than the national average.
- This shows us that three bedroom homes in Detroit are significantly more affordable than the many other U.S. real estate markets today.
Detroit has Strong Cash Flow Opportunities
- In the neighborhoods where RWN members invest, three bedroom homes rent for a median 1.29% of the purchase price. This is almost double the national average.
- This shows us that there is a substantial opportunity to generate passive monthly cash flow in Detroit.
Detroit is Rapidly Appreciating
- In the past five years (Jan. 2012 to Jan. 2017), three bedroom homes in Detroit have appreciated by a whopping 66%. During the same period, three bedroom homes increased only 28.97% nationwide.
- This shows us that Detroit offers investors a higher equity growth opportunity than many other real estate markets around the country.
Millennials & Billionaires Love Detroit
- Despite very slow population and job growth overall, Detroit has been attracting more educated millennials than similar cities across the nation.
- Plus, with investors like Dan Gilbert and Mike Ilitch investing billions in redevelopment and corporate expansion, future growth in Detroit seems highly likely.
November 1, 2017
Wondering where to buy real estate this year? Check out this comprehensive article to learn more about Detroit, Michigan. Read now.Read More
August 4, 2017
During this webinar you’ll learn about Detroit – a city where you can purchase cash flowing R.E.A.L. turnkey property for as little as $50,000. A few…Read More