Have you been thinking about buying investment real estate in Metro Detroit? There has never been a better time! In our latest post, we will offer some tips so you can determine if a property will be a good investment to add to your portfolio!
Real estate investment is one of the best ways to build wealth in Metro Detroit. With more and more people getting involved, it is important that you take the time to analyze a deal before making a purchase. Not every property will make for a great investment! Keep reading to learn about some of the signs of a great investment property in Metro Detroit!
There Are Tenants
If a house is for sale and comes with tenants in place, you could say you hit the jackpot. Many home sellers are worried that selling a house with tenants in Metro Detroit will be difficult. But as an investor, purchasing an investment property with instant cash flow, without having to screen or find tenants, is a dream come true. Of course, you’ll want to make sure there are good people living there who haven’t had problems paying rent in the past. The people living there should be responsible and take good care of your property.
The Area Is Walkable
Many renters will love living in a neighborhood that is considered walkable. Renting or not, it is nice to have restaurants, groceries, and things to do right outside your front door. Walkability can play a huge factor for those looking to rent a house in Metro Detroit. When you are looking for an investment property of your own in Metro Detroit, pay careful attention to the neighborhood and what’s around. If you were renting, would you enjoy living in the neighborhood?
Up and Coming Neighborhood
Are there new restaurants and stores popping up? Are there more people moving to the neighborhood? Are you seeing a change in the overall aesthetic of the area? When an area first takes off, you will be able to find some great deals. As the demand grows higher and higher, you can almost assure that you will be able to find high-quality tenants who will pay you the price you want. Keep your eye on those up and coming neighborhoods. Look for new grocery stores and higher-end chains such as Starbucks, Panera Bread, or Whole Foods. Those companies spend millions of dollars scouting the best neighborhoods and you can utilize their research to help you find the best areas to buy!
The Numbers Are There
Before buying an investment property in Metro Detroit, you’ll want to know about the property costs, recent repairs, and vacancy rates. You need to research what rental properties are going for and how long they are sitting empty before a qualified renter is found. You should acquire data specific to the property including vacancy rate, tax information, and annual expected maintenance costs.
When looking for a great investment property in Metro Detroit, there are a number of equations you can use to determine if a property will be a good investment or not. You’ll want to determine your capitalization rate so you can determine if you are getting a good deal on your Metro Detroit investment property. The 1% Rule states that a property should bring in 1% of its purchase price each month. You’ll also want to run a CMA report on the area to find out what else has recently sold and what those properties are bringing in rent-wise.
Your tenants will need a way to pay you to rent the house each month and they can only do that if there are employment opportunities in the area. Take a look at your local job market to make sure there are opportunities available. If your tenants aren’t able to find work, they aren’t going to be able to pay you to rent your Metro Detroit property each month. You’ll find yourself back at square one, having to find new tenants all over again. Tenant turnover can prove to be a big loss financially. You can avoid this by ensuring your investment property is in an area with a lot of job opportunities available.
It Boasts Unique Features
Does the property have something that sets it apart from others in the area? Maybe a sundeck, a large fenced in yard, or a state of the art wine fridge. These small touches will make your property stand out from other available rentals. It’s little details like this that can make a property seem more exclusive, thus increasing interest and demand.
Getting involved in Metro Detroit real estate in one of the smartest decisions you can make. No matter what type of property you are looking for or when you wish to buy, our team can provide you with information and a list of currently available investment properties in Metro Detroit!