There’s Never Been a Better Time to Be a Property Owner in Detroit
Grand Circus Park in the summertime.Just nine months ago, the news cycle around Detroit had a several reports out assuring everyone that it was much better to buy a home in Detroit than it was to rent here. It put a tiny bit of a damper on the rental market for a few months — but less than you might think. Oh, what a difference three-quarters of a year makes!
Why do I say that? Because of this. RealtyTrac.com produced a report that discusses rentals, and surprise surprise: Wayne county is the number one county in the USA for owners investing in rental properties right now.
How Do They Know?
RealtyTrac’s system is pretty straightforward. They take the ‘fair market’ rent of a 3-bedroom house and multiply it by 12 to get a yearly rental cost. Then they divide that annual cost by the median sales price of a 3-bedroom home. What you get, essentially, is the percentage of the cost of a 3-bedroom home that you make back by renting that home out for a year. In general, country-wide, if you can pay off an investment property within 8-10 years, you’re doing well.
In Wayne County, you can make back as much as 30% of your investment cost annually, so it’ll take 3-4 years to pay off your property (assuming you can keep related costs minimized.) Essentially, what they’re saying is that Wayne County is the place in the USA where you’ll make back your costs and start pocketing profit in the least amount of time.
What That Means for You
If you’re a property investor — or interested in becoming a property investor — Wayne County is a golden opportunity waiting to be exploited. (Nearby Macomb County isn’t doing terribly poorly, either — the return is about half of Wayne County’s, but that’s still good enough for RealtyTrac to qualify it as “excellent”.)
But It Only Gets Better
At the same time that the market in Wayne County is proving to be among the best in the country for investors, it’s also turning out to be in demand. Rents in the downtown area are approaching $2/sq. ft. in some places, and on a broader scale, nationwide rental demand is still growing and supply is barely keeping up.
That means that chances are excellent right now that if you do get into the rental property market, your property won’t stay vacant for long, especially if it’s properly marketed. In short, there hasn’t been a better time to be a rental property investor in the metro Detroit rental market. Are you ready to take advantage?