Why Detroit?

Detroit has been the number one investment hotspots in the USA for three years running. The low property prices and high rental demand offers investors a unique investment opportunity that is hard to find anywhere else in the world. Detroit, Michigan was once a manufacturing mecca, a city where industry and production combined with a rich culture all built around the automotive industry. Recent years have shown a downward trend into citywide chapter 9 bankruptcies and the perception of a dangerous ghost town. The reality is a different story, it’s a city on the comeback; a city of rich history with great potential, a city where overseas investors have taken advantage of the low level entry investment level to secure themselves a part of this comeback. There are tremendous investment opportunities available with high quality, refurbished houses available from $30,000.00 producing high net yields of up to 28% and medium to long-term capital growth. Dan Gilbert, the billionaire and founder of Quicken Loans kick started the comeback by investing one billion in commercial property in Detroit since 2013.

JPMorgan Chase has also been heavily involved in Detroit, investing some $34 million since May of 2014. Other companies to follow suit investing include , General Motors, Chrysler, Microsoft and Twitter to follow. TechTown Detroit, a non-profit business incubator located in an old General Motors is pushing Detroit to become one of the leading tech hubs in the US. Only recently Sakthi’s a leading global Tier 1 manufacturer, plans to expand its Southwest Detroit facility up to vale of $31 million. The US government believes so strongly in its automotive companies that billions of dollars have been pumped into the industry to help it thrive.

The Rental Market

The key to a successful investment is having good tenants in place and a good management company on the ground to support you and your tenants and collect your monthly rental income. Detroit has a high demand for rental property; a high percentage of homes are already rented. Typically, tenants are long term. Like many other cities across the US renting is simply the preferred method over home ownership. Another reason for the strong rental market is the Housing and Urban Development or Section 8 scheme. This scheme offers subsidies, grants and general assistance to private individuals to help with their rental payments. There are over 9,000 families on the Section 8 waiting list for rental properties. There has been a noticeable influx of educated young people moving to city, working in the arts and tech industries, attracted by the amazing economic opportunities, cheap rents and the trendy vibe of the area.

Demographics

The city covers approximately 143 square miles; Detroit sits on the US-Canadian border with four border crossings. The downtown areas consist mainly of high-rise buildings/skyscrapers with the majority of the surrounding areas consisting of family homes and low-rise buildings. Detroit City itself is the 11th most populous city in the US with around 916,000 residents; if we consider the Metro Detroit region consisting of six counties, the population is closer to 4.4M. The Metro Detroit suburbs are some of the most affluent in the US with an average income of around $34,000 per household. Families’ make-up around 60% of all households, of which around a third have children under 18 and the average family average is 3. So it is clear that Detroit provides a good opportunity for property investment with a significant family population looking for quality accommodation.

Growth and Returns

We believe Detroit has an edge over many other markets that have had similar economic problems and now is the time to buy. Prices are still relatively low but Detroit is under the radar from large investment funds and building contractors. Over the last 12 months there has been a huge influx of property developers arriving in Detroit buying properties and then flipping them with added profit, similar to what you find in the UK. An escalation in property prices is expected in the medium term over the next five to ten years as more eyes are focused on Detroit so now is the time to make advantage of this unique market and buy while the prices are still low.

Management and Aftercare

The city covers approximately 143 square miles; Detroit sits on the US-Canadian border with four border crossings. The downtown areas consist mainly of high-rise buildings/skyscrapers with the majority of the surrounding areas consisting of family homes and low-rise buildings. Detroit City itself is the 11th most populous city in the US with around 916,000 residents; if we consider the Metro Detroit region consisting of six counties, the population is closer to 4.4M. The Metro Detroit suburbs are some of the most affluent in the US with an average income of around $34,000 per household. Families’ make-up around 60% of all households, of which around a third have children under 18 and the average family average is 3. So it is clear that Detroit provides a good opportunity for property investment with a significant family population looking for quality accommodation.

Invest now, contact us today!

THE USA BUYING PROCESS