There has never been a better time to invest in Detroit. Compared to other American property investment hotspots, Detroit is currently delivering some of the highest returns available in the market. This is in no small part due to the below-market value prices that properties in the area can be bought for, which is very apparent in the capitalization rates.
The future looks promising for the Detroit real estate market. The value of the property investment market has been consistently increasing in Detroit’s suburbs. The economy and real estate markets are even more stable now than they were before the 2008 market crash, and property experts and outside observers alike expect the growth we are seeing to continue.
Detroit is a great city to invest in due to the high rise in the real estate market. Ford recently announced they will invest over $700 million in their manufacturing plant in Flat Rock, MI. In addition, Chrysler will invest $1 billion into their Ohio and Michigan plants. Both corporations will add over 1,000 jobs combined. This news has implications beyond the auto industry, extending to commercial real estate. Job growth can, as we’ve previously discussed, have a ripple effect on the local economy and affect not just industrial properties but also other types of real estate.
More people are attracted to living in areas where there is job growth, and with job growth the need for multifamily (or residential) housing will increase.
New investors are being drawn to the area by Detroit’s improving financial outlook post-bankruptcy, its redeveloping urban landscape and its selection of properties with relatively higher yields compared with other markets of its size.
Detroit has become one of the top ten places to visit in the U.S. because of all the great attractions that it has to offer. Detroit’s downtown area is in constantly being updated and restored. The greater midtown Detroit area, just north of Detroit’s central business district, has many cultural, educational, medical and service institutions including Detroit Institute of Arts, Detroit Public Library, C. H. Wright Museum of African American History, Wayne State University, College for Creative Studies, Detroit Medical Center, Detroit Symphony Orchestra Hall, Henry Ford Health Services, TechTown and Masonic Temple, to name just a few. Midtown also has a growing residential base within its many historic neighborhoods. It is one of the fastest developing areas in Detroit with many opportunities for rehabilitation, restoration and new construction.