If homes are so cheap, why are people still renting in Detroit? (Troy: for sale, rent)

[animatedmartian]

Originally Posted by tre_maine

I'll be in it for the long run. At these prices, the only way is up hopefully. I think it will rebound, but It would take some time. And I'm cool with that.

Prices will go up, yes. But they're not going to shoot back up to pre-recession levels, no. I think that's what most people were expecting.

The suburban home values have always been greatly higher than those within the city because that's where the demand is. I don't think demand will really shoot up in the city until the bankruptcy situation is settled and we'll have to see what the services and conditions will be like then. But until then, Detroit will only see modest gains in value.

So far though, prices have been going up so it's at least looking better. The real nadir point in prices seemed to be late 2011 but most prices within Metro Detroit have gone up since then.

[fmax]

After the first ring suburbs collapse, the poverty will head back downtown due to transportation and consolidated services.

Ten Cities Where Poverty Is Soaring




" In Eastpointe, Michigan, the poverty rate rose from 12.2% during 2007-2009, slightly below the U.S. average rate, to a 27.1% average rate during 2010-2012[LEFT]
Read more: Ten Cities Where Poverty Is Soaring - 24/7 Wall St. Ten Cities Where Poverty Is Soaring - 24/7 Wall St.
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[y2c313]

Originally Posted by fmax

After the first ring suburbs collapse, the poverty will head back downtown due to transportation and consolidated services.

Ten Cities Where Poverty Is Soaring




" In Eastpointe, Michigan, the poverty rate rose from 12.2% during 2007-2009, slightly below the U.S. average rate, to a 27.1% average rate during 2010-2012[LEFT]
Read more: Ten Cities Where Poverty Is Soaring - 24/7 Wall St. Ten Cities Where Poverty Is Soaring - 24/7 Wall St.
Follow us: @247wallst on Twitter | 247wallst on Facebook

What?!? I assure you, poverty won't be returning downtown anytime soon! The poor are being pushed out of that area as we speak. Just wait till that hockey arena project gets completed!

[MichiVegas]

Originally Posted by y2c313

What?!? I assure you, poverty won't be returning downtown anytime soon! The poor are being pushed out of that area as we speak. Just wait till that hockey arena project gets completed!

Right, because nothing says wealth like a hockey arena...

[animatedmartian]

The poor left downtown Detroit decades ago. All who are left now are pretty much stragglers. In the area where the arena will be built, there was only 3 apartment buildings with 50 units each. Plus the Temple Hotel. It was at most, what, 75 residents? Maybe 100 if you count the homeless residents.

For an area of Detroit that used to have 50,000 residents per square mile in 1950, it is essentially vacant as of today. I don't even think classifying it as a neighborhood with an income level would make any sense.

[Arthur Digby Sellers]

Originally Posted by MichiVegas

This is exactly what I would do if I were investing money in Metro Detroit. Find undervalued "problem" properties in suburbs with excellent school districts and forget Detroit and most of the declining inner ring burbs.

Places like Novi, Northville, South Lyon, Rochester, Troy, etc. are good investments. The truly upscale Birmingham/Bloomfield type places won't have "deals" and are picked-over.

I agree with your strategy, but all of the places you mentioned no longer have "undervalued" homes. The time to buy undervalued properties in the Northvilles and Rochesters was 2008 - 2011. However, some inner-ring suburbs with decent schools - like Livonia - still have some undervalued properties that would generate a high rental income.

[Retroit]

If it were such a good investment, I can assure you that there is enough wealth among the 4.4 million people of metro Detroit to buy all the vacant housing several times over. Unless you think that being from Atlanta gives you some unique wisdom on the Detroit housing market, I would urge you to proceed cautiously.

I know people that are or used to be landlords in Detroit and the stories they told were discouraging enough for me (being shot at while attempting to collect rent, trashed homes, etc.)

[MichiVegas]

Originally Posted by animatedmartian

The poor left downtown Detroit decades ago. All who are left now are pretty much stragglers.

If you look at the census data, the poverty rate in most census tracts around downtown/midtown is around 50%.

I think some people have a very distorted view of Detroit because of all the Dan Gilbert hype. Detroit is probably worse right now than at any point in its history, and if you go downtown/midtown on a non-event night, it's as quiet as ever. Granted, when there's an event, there's certainly activity.

[fmax]

Cornerstone Estates - Sec 8.

Brewster Homes - Sec 8.

The only areas showing improvement are the pay to live areas. When the cash incentives get pulled, Section 8 residents will quickly fill-up the space.

And all it will take is some fed bucks to erect another Project Tower when the poverty goes North of of some point.

This has all happened before.

[mangofacee]

Originally Posted by tre_maine

Thank you for your info. I'm planning another trip to Detroit soon with a business partner first of the year. He's originally from Detroit, and he claims that it really depends on the street you pick. I'm just trying to do some of my own due diligence before we head up as well. All information is really appreciated.

My main focal point is to buy where there's police presence, street lights, etc. Can you tell me where would be the best location for that?

If you want to buy where there is a police presence I would buy in Midtown. This area is where Wayne State University is located, so the area is patrolled by their campus police.

I've also read on here that Midtown rentals are getting hard to come by due to the "resurgence" that this area is seeing. If you can find multi-unit properties that are in good shape, I would go for it.