Soon, the city's initiatives to fight blight and spur investment in the real estate market started to pay dividends. Investors from around the world participated in the Wayne County Tax foreclosure auctions each year, buying up dilapidated properties with the intention of fixing and renting or re-selling. However not all investors had intentions that aligned with the interests of the city and its residents. Many property speculators purchased a significant number of homes in the hopes that the properties would appreciate without any capital investment. In response, the city has made it clear that any investors that acquire properties in the city must have an immediate plan for making improvements or else they risk forfeiture. Through the Detroit Land Bank Authority, the city began to seize properties that weren't being fixed, and selling them in daily auctions on its website. Fast forward to 2020: Detroit is now the most popular real estate market in the country for acquiring rental properties.
Investing in The Right Areas
While investors from around the world are flocking to Detroit, many are unsure about where to start. Most importantly, investors want to know where to invest in the sprawling city. With the city's land mass exceeding 140 square miles it's no wonder many first time investors can be overwhelmed when conducting due diligence. This is where our team of experts can take the guess work out of the equation and provide you with the most up-to-date, relevant information. We know the city street by street, and monitor trends within micro neighborhoods, not just by zip code. As a general rule of thumb, the best investment neighborhoods in Detroit tend to be those that border the suburbs. We find this to be the case in East English Village, Aviation Subdivision, Bagley, and the University District just to name a few.
Market Trends and Projections
It is important to monitor trends to stay ahead of the game and focus on the areas which will provide the best growth potential. One major trend we are witnessing is the upswing in home owner financing in many of the city's top neighborhoods. In the aftermath of the mortgage crisis, banks essentially stopped lending in Detroit. It became a market strictly driven by cash sales. Investors kept the market afloat for several years, along with help from city institutions like the Detroit land bank. Now, we are starting to see tons of comparable sales sold on mortgages in higher end neighborhoods. The more comps, the easier it becomes for the next property to be sold. It helps that the largest mortgage originator in the United States is right here in downtown Detroit: Quicken Loans. While Quicken founder Dan Gilbert has invested billions of dollars into Detroit's commercial center, his company has been providing a huge boost to Detroit's neighborhoods by lending to homeowners. Properties in neighborhoods like Rosedale Park and Grandmont are selling for well over $150,000, something that felt like a long shot just a couple years ago. We project that Detroit's premium neighborhoods will continue to climb, notably on the northwest side. There are also small pockets of the east side that are also witnessing this trend.