Buy low, sell high: it’s the number-one rule of smart investing. But we set our own trends in Detroit — and we argue that NOW is the time to buy cash flow real estate here.
Home values grew faster in Detroit than any other U.S. city between 2010 and 2015, outpacing the national average by more than 13%. And last year, Travel+Leisure said “Detroit might not be able to sell its comeback story for much longer — it’s decidedly back.” To the conservative investor, this might mean you’ve missed your investment window if you haven’t yet purchased a property here. However, Detroit hasn’t reached its pinnacle.
Detroit home values are still below their 2009 high. Section 8 and other rental properties are being purchased, restored and renovated — and delivering double-digit returns. And billionaire investors and trendsetters alike are scrambling for commercial properties not only in Downtown Detroit but throughout the Detroit Metro area.
In the last two days alone, “Cavs” Dan Gilbert submitted a proposal to transform an old jail site into a new soccer stadium for an MLS expansion team, and Shinola broke ground on its 130-room boutique hotel at the northwest corner of Woodward and Grand River.
But perhaps most importantly, based on price-to-rent, Detroit is still the number-one U.S. city for home buyers. According to the advanced measurements of SmartAsset, a $1,000 rental in Detroit should sell for “just $75,240.” That’s compared to a sale price of $259,200 in nearby Chicago. So, what does this mean?
For real estate investors, it means you can purchase an investment property in Detroit for the lowest price, while earning the same rental income. And if home values continue to soar, you can later sell that property for a higher price and increase your return on investment.
Now, what if you could buy a tenant-occupied Detroit rental property for less than $40,000 today?