Why Detroit Is the Best City To Buy a House for Under $100K
Despite the city’s reputation for the nation’s largest municipal bankruptcy, high crime rate and corruption, many say that Detroit is on the brink of a great comeback. Since filing bankruptcy over a decade ago, the Midwest metro has experienced an urban revival in many ways, including the real estate markets.
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Though investing in real estate in Detroit can be risky, there may be enough upside for those willing to learn the market and use some creativity to profit. Here are some reasons to get started.
1. Detroit’s City-Wide Revitalization Efforts
Over the past decade, Detroit has undertaken a series of focused revitalization efforts to restore its economic base. The city has launched various redevelopment projects, infrastructure improvements, and community programs through partnerships with the public and private sectors and non-profit organizations. According to a report by the World Economic Forum, “Job growth is back — it sits at 6% over the last 10 years, while the growth of the prime-age adult population in Greater Downtown is even larger, an 18% increase.”
2. Low Home Prices, Plus Appreciation
Detroit’s housing stock is characterized by its affordability, which can be great for investors starting with smaller amounts of capital. Though there are plenty of sub $100K houses in this market, it’s not uncommon to find single-family homes and lots under $10,000 or even $5,000!
According to data from Zillow, the typical home value in Detroit has increased by over 4% over the past year alone. As revitalization efforts continue and sections of Detroit continue to develop, the prospects for appreciation remain strong. This appreciation factor alone makes the city an appealing market for investors looking to capitalize on long-term gains in real estate.
3. Lower Renovation Prices
Renovating properties in Detroit can be significantly cheaper than in other cities, which can be a great advantage for real estate investors. A key reason for this is the lower labor and material costs. Detroit, in general, is a lower cost of living area, which means investors can hire skilled labor and trades for lower costs.
Additionally, material costs are generally lower in Detroit. The city’s network of local suppliers and manufacturers offers competitive prices, which means that, as an investor, you could spend less on home renovations and repairs in your Detroit property portfolio.
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4. Subsidies, Grants and Incentives
The city’s revitalization efforts include local initiatives and incentives for homeowners, often including grants, subsidies and tax incentives for renovation projects or property ownership. These financial incentives can make investing and owning property in Detroit more affordable.
5. Variety of Areas To Invest In
If you’re looking to invest in the Detroit area but want to avoid the high-crime pockets, you can opt for neighborhoods and communities further in the revitalization process. For example, Midtown is home to Wayne State University and the Detroit Institute of Arts, as well as dining, shopping, and nightlife. Corktown, Indian Village District and Woodbridge are additional up-and-coming neighborhoods with lower crime rates, higher home values and more development to support a high-quality tenant base.
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This article originally appeared on GOBankingRates.com: Why Detroit Is the Best City To Buy a House for Under $100K
