Why You Should Invest in Detroit
In Detroit, ROI is in the name (D-E-T-R-O-I-T)
When investing in Real Estate, what’s the #1 consideration? Location, location, location!
Led by the likes of billionaire Dan Gilbert (Quicken Loans, Cleveland Cavaliers), JP Morgan CEO Jamie Dimon, the Illitch family, athlete Magic Johnson and actor Mark Wahlberg… it seems everyone is investing in Detroit.
Madonna has turned to Twitter to tell Amazon CEO Jeff Bezos (of recent Whole Foods-acquisition fame) to do the same. She called Detroit “one of the coolest cities in America.”
And Bloomberg just featured our founder and CEO, Al Beahn, in an article focused on the booming Detroit rental market.
Here are some of the reasons why:
Trendy restaurants, techno and rock concerts, scenic and social parks, newly paved biking lanes, curated walkways and a redesigned riverfront are redefining downtown.
- Adweek‘s “coolest brand in America,” Detroit’s own Shinola has expanded to audio and recently opened its 1st boutique hotel in the city.
- By the end of 2016, Gilbert had purchased more than 80 downtown properties, investing a total of $19 billion. In his 1st 5 years in Detroit alone, he paid more than $3 billion in salaries, spent $802 million at local businesses, and relocated 12,000+ of his own employees.
- Other major corporations with headquarters or major office centers in downtown Detroit include GM, Ally Financial, Little Caesars, HP, Ernst & Young, OnStar and Blue Cross Blue Shield.
- Downtown Detroit is now home to 4 high-profile professional sports teams, the Lions, Pistons, Tigers and Red Wings; and, it may also be the future home of Detroit’s new expansion MLS team.
- In 2017, JPMorgan Chase increased its initial $100-million investment by another $50 million.
With the new QLine public transport system extending into the outskirts of the Motor City, and the forthcoming Inner Circle Greenway bike and pedestrian path encircling the city, an emerging influx of newcomers to districts outside the city center is likely to continue, bringing increased value to properties across the Detroit metro area.
Elite Daily, the preferred platform for today’s hottest issues and trending topics, called Detroit a “millennial paradise,” and that means more innovation and more mystique for UNESCO’s 1st American City of Design.
- In a recent Op-Ed, Techstars Managing Director Ted Serbinski, an ex-Silicon Valley entrepreneur and startup investor now living in Detroit, explained why Detroit could be the next Silicon Valley.
- A recent LinkedIn survey revealed that millennial interest in mid-size cities has grown 25% faster than interest in larger cities, with Detroit at #3 nationwide.
- Fueling millennials’ interest in Detroit are the City’s 44,000+ jobs in the internet technology, marketing, advertising and automotive industries.
- Reporting recently on millennials in Detroit, former AP Washington bureau chief Ron Fournier wrote, there’s “an infusion of young, civic-minded strivers. Innovators. Disrupters. Dreamers. Risk-takers. Consensus builders.”
Since June 2010, the Detroit metro area has experienced year-over-year employment increases each and every single month.
- Michigan added nearly 100,000 new jobs in 2016 alone — considered a “scorching hot” pace.
- Total non-farm employment stood at almost 2 million as of March 2017, up 2.1% year over year; during that same period, the average increase nationally was only 1.5%.
- 14,000 jobs in leisure and hospitality are expected to be added between 2017 and 2018.
- Detroit is in the top 10 nationwide in construction job growth (the Associated General Contractors of America, May 2017).
- In the 1st half of 2017 alone, the U.S. auto industry’s big 3 — GM, Ford and Fiat Chrysler, all headquartered in Detroit — announced $2.7 billion in new domestic investments.
- Michigan will see thousands of new auto-related high-tech manufacturing, technology and engineering jobs, on the heals of an increase of 200,000 between 2009 and 2016.
Today, Detroit is #10 on ABODO’s list of top U.S. metro areas for tech jobs, and tech workers in the City and surrounding suburbs earn 12x more in income than what they pay in rent. That’s why people are asking if Detroit is the next Silicon Valley.
Surging Home Values
As economies expand, a growing demand for real estate drives home values and monthly rents higher.
- Detroit now has more renters than homeowners.
- The population is growing in Detroit, and there is a major apartment shortage.
- Looking at approximately 1-million users searching in 75 metro areas during the 1st quarter of 2017, the Redfin migration researchers found:
- Many were interested in Detroit, and especially those from traditional hot spots such as Los Angeles, San Francisco and nearby Chicago.
- Close to 80% of Detroiters were looking in their own metro area.
In the last 5 years in Detroit, home values have grown at a faster pace than in any other city in the U.S. — at more than 21%!
The Best Bang for Your Buck
GoBankingRates considers Detroit far cheaper than any other big U.S. city, and FORBES has ranked Detroit the most undervalued housing market in the entire country.
“In Detroit you can purchase a fully renovated rental property in good B neighborhoods for only $65,000, and rent them for about $900/month. Plus, these properties used to sell for over $100,000, so there’s a good chance values will increase as well.” – Real Wealth Network
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