Investment Opportunities in Detroit for New York Real Estate Investors

For investors in popular urban areas, such as New York, real estate can be a sizeable investment. Prices for even the smallest of houses in these coveted areas are often sky high when compared to less popular areas of the nation. These high prices cause low return on investments and make it difficult for beginning investors to enter the market.

In today’s real estate market, Detroit is one of the top-rated areas for capitalizing on a rental property investment.

Affordability for Renters

Detroit’s current claim to fame is being ranked as one of the top ten most affordable US cities to live in. Living costs in Detroit are substantially below national average, making it easier than ever for families and/or singles to live comfortably on their median income. Grocery prices have been cited at 5.5% lower than the average, with utilities, transportation, and health costs coming in at 2.6%, 1.1%, and 1.6% cheaper than elsewhere.

Currently the average rental price for a home in New York City averages at $3,000, while in Detroit average rental rates are $750. This, in addition to the increase in economic growth and job availability, is bringing in an influx of millennial migrants looking to make the most of their money with the burgeoning cost of student loans and high automobile payments.

Return on Investment Rates

Another title Detroit took home recently was top hottest markets for real estate investors. This should come as no surprise after a quick analysis of median housing costs in comparison to the national average. Detroit is currently boasting one of the largest ROI rates in the market. An ROI, return on investment, refers to a profitability measurement that investors use to judge a property’s efficiency. This is one of the top factors practiced investors will look at before making any purchasing decisions.

In New York, ROI rates have dropped from their all-time high of 7% down to a trivial 4%. In Detroit, however, ROI rates are running between 6.75-8.5%. Another profitable measurement of Detroit’s ROI rates is the area’s stability, continually running at the same ROI rates year after year in recent accounts. Other urban markets, such as New York and California, have seen huge fluctuations in ROI rates since the last economic recession. This stability shown in Detroit real estate markets has been a draw to foreign investment, which has increased sales frequencies and property values.

In addition to higher than average ROI rates, Detroit has been meticulously planning a revitalization project. Several local agencies, private investors, and government organizations have teamed up to reduce blight and increase investment in the Motor City. As projects continue to be announced, Detroit’s average property appreciation values have begun to rise and are projected to continue for the next several years.

Entry-Level Investors are Welcomed in Detroit

The New York real estate market can be difficult to navigate with its high purchase costs, decreasing ROI rates, and influx of experienced investors. For first time investors, markets showing a constant stability, such as Detroit, are the safer choices to avoid a potential costly mistake.

Purchasing investment properties can be extremely costly, as they don’t qualify for residency exemptions. If the purchase is being made through the utilization of financed monies, such as a mortgage, setting an affordable rental price becomes limited to the cost of the monthly mortgage payment and other expenses. In high priced areas such as New York, his can make ROIs tight and decent tenants hard to come by. Purchasing property with cash can be costly, as well, as the median pricing is on the higher end of the national average.

For those looking to get involved in the real estate investment market without excessively high up-front costs, Detroit makes a great alternative. With an incursion of affordable turnkey properties, low median costs, and many tempting tax benefits for investors, Detroit is the clear choice for entry-level investors.

Non-residential investors looking to get involved in the Detroit market can rest assured when partnering with Strategy Properties. Strategy Properties offers everything needed for investment peace of mind. One of the leading providers of turnkey properties in the Detroit area, Strategy Properties is experienced in working with out-of-state or foreign investors and can handle the process remotely on your behalf.