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Posted over 1 year ago

Deep Dive into Metro Detroit Cities: Westland

Gorgeous single-family residence along Berkshire St. in Westland, MichiganSource: Zillow listing

Welcome to another installment of our Deep Dive series, where we tackle the rental investment strengths and weaknesses of all Metro Detroit cities and neighborhoods. You might be wondering, why are we writing these articles for Macomb, Oakland, and Wayne counties?

Well, these areas have affordable housing stocks that are ripe for investors like you.

However, they are also extremely tricky to figure out.

For example, the area has 185 cities and 290 neighborhoods, all with unique tenant demographics, property management requirements, property conditions, and returns on investment. Unfortunately, it'll take decades to become experts in all these areas—nobody has the time or resources for that.

But you have this handy guide that already unpacks each area on your behalf, thanks to our team.

With more than two decades of experience operating as a property management company in Metro Detroit, our team has the knowledge and insider tips to help you sift through the markets and find the best investment opportunities. We'll show you where to look, where to avoid, and how to get the most out of investing in Michigan's famous tri-county area.

For this installment, our featured area is Westland—a city in Wayne County that's only 16 miles west of Downtown Detroit. So read on to know if Westland is a good rental investment spot for you today.

Contain 800x800Source: Google Maps

Westland

Westland is the 10th largest city and the 12th largest municipality in the state. With a population of 84,094 and a land area of 20.43 sq mi (52.92 km2), it has a population density of 4,180.70/sq mi (1,614.20/km2).

Since Westland does not directly touch any of the City of Detroit’s borders, we don’t consider it as a “Ring City”—a term we give to Metro Detroit cities surrounding the main city that has affordable properties without most of the risks associated with Detroit investing.

Here’s a map that shows the location of Westland and its nearby cities in Metro Detroit:

Map showing Tri-County Metro Detroit CitiesSource: Georgetown Public Policy Review

If you need more help, here is a list of all the Metro Detroit cities. Those highlighted in green are Ring Cities, while those with hyperlinks will take you to our other Deep Dives for more information:

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The Downriver Suburb of Detroit

Westland is a city in Wayne County, Michigan, located about 16 miles west of the City of Detroit. It was incorporated in 1958 and is now home to over 84,000 residents.

The history of Westland is closely tied to the City of Detroit. In the 1800s, the area was inhabited by Native Americans and was used as a hunting territory by multiple tribes. By 1805, Lewis Cass purchased the area and established the Cass Station trading post that served as a stop on the Underground Railroad. Settlers also regularly passed by the area until they settled in the land in 1824.

Westland was called several other names before. In 1827, the area was called Bucklin Township, which included the present cities of Westland, Garden City, Livonia, Inkster, Wayne, Dearborn Heights, Dearborn, and Redford Township.

However, by 1829, Bucklin Township was divided into Lima and Richland, where the former was renamed Nankin Township with reference to the Chinese city of Nanking. This place was mostly rural until after World War II, when Norwayne subdivision provided housing for returning soldiers. By the early 1960s, Livonia annexed a part of Nankin Township and changed the remaining land to Westland.

Westland used to be a farming community. But by the late 1800s, the city grew rapidly as the City of Detroit expanded westward. Westland became a popular suburban destination for Detroiters looking for housing outside of the city and is now a thriving city with a strong and diversified economy.

Westland is now home to several major businesses, including Ford Motor Company and Walmart. These businesses provide jobs and economic opportunities for local residents, and they make Westland a desirable place for real estate developers to build more structures.

But is Westland a good area for rental property investors like you? What does it look like to purchase and rent out homes in this city? Let's take a look at the details.

Rent & Rent-To-Price Ratio (The 1% Rule)

According to Niche, the average rent across all property types in Westland is $923 per month. If we break this figure down to bedroom sizes, we see that rent amounts in Westland are much higher than the average in Metro Detroit and Michigan:

Contain 800x800Source: Bestplaces

Higher rent is good news for you, as it means you can likely charge and earn higher income in Westland than in other areas in Metro Detroit. However, we’ll have to discuss the average income of Westland locals, later on, to see if they’ll be able to keep up with payments—crucial for your cash flow stability.

But first, if we compare the data to Zillow listings, the rent averages by Bestplaces are actually a tad lower than reality. This means you can potentially charge higher than the average rents dictated, like these listings:

Contain 800x800Source: Listings on Zillow as of August 2022 Contain 800x800

To analyze the figures, let’s use the rent-to-price ratio calculation to see if Westland Homes can generate positive cash flow. The industry standard says that the monthly rent should equal or be higher than 1% of the total property price (including necessary renovations).

Let’s use this Zillow listing below for a recently remodeled, three-bedroom ranch along S Middlebelt Rd in Westland, MI. With a Zillow rent estimate of $1,450 per month and a sold price of $110,000, the ratio comes out as a favorable 1.31%.

This is within Metro Detroit’s impressive average range of 1 to 1.5% ratio—and is good news for you as a rental investor.

Contain 800x800Source: Listing on Zillow as of August 2022

House Value and Appreciation

Based on Niche, the average house value in Westland is $131,600. But Zillow reports that the amount is closer to $197,715, where Westland property values have increased by 13.8% over the past 12 months:

Contain 800x800Source: Zillow

Redfin estimates an even higher figure, where their data shows that Westland homes are sold for a median price of $200,000. Moreover, this number is increasing by 14.3% year-over-year, even though the number of homes sold has decreased.

Contain 800x800Source: Redfin

Because of this, Redfin deems Westland as a highly competitive market based on its Compete Score, where homes get multiple offers and can sell up to 9% higher than the list price.

NeighborhoodScout tells us that the most common housing type in Westland is single-family residences (58.3%), followed by apartment complexes (26.5%), townhomes (6.6%), small apartment buildings (6.2%), and mobile homes (2.4%).

Looking at Zillow listings, we see 2-bedroom, 3-bedroom, and 4-bedroom homes available for sale. They are priced from $22,000 to $500,000, depending on the kind of property. Either way, Westland homes offer a wide range of prices, where you can take your pick among many property options:

Contain 800x800Source: Listings on Zillow as of August 2022

Regarding appreciation, Westland experienced one of the highest home appreciation rates in the nation. Its real estate appreciated 139.08% in the last decade, putting Westland in the top 10% for property appreciation in the US. In the recent 12 months, the rate is 14.62%, which is above the national average.

These appreciation rates are good news for both long- and short-term investors, where you can reap equity gains quickly and for a long time. NeighborhoodScout also gives us a heatmap to help you focus on the highest appreciating areas in Westland:

Contain 800x800Source: NeighborhoodScout

Quality of Tenants, Properties, and Living

With the financial viability of Westland properties now determined, let’s look at the quality of tenants, properties, and living in the city. These factors will help you know the type of tenants to expect, the property conditions to manage, and the attraction of the neighborhood that’ll affect your occupancy rates.

Average Property Class and Condition: B

Average property age: 50 years

According to Bestplaces, around a quarter (25.4%) of Westland properties were built from 1950 to 1959. The rest were mostly built from 1960 to 1979. Given that the industry standard for “old homes” is any properties that are older than 50 years old and above, you’ll likely see several old homes in Westland:

Contain 800x800Source: Bestplaces

Now, old doesn’t automatically mean bad news in terms of real estate. But it does require expert inspection, accurate budgeting, and a higher level of maintenance. Westland homes are an average of 50 years old, so you have to learn how to handle major renovations to bring your investments up to standard.

Still, you’ll find newly-furbished homes too like the one we pulled up from Zillow earlier. Then, you won’t have to deal with old-home issues. Seek those gems out and you’ll have fewer problems to deal with.

Quality of Life in the Neighborhood: A

Will Westland attract high-quality tenants? As an investor, you want to secure responsible tenants who’ll pay their rent diligently, maintain the rental responsibly, and maximize the impact of your investment return. You don’t want to have irresponsible tenants who’ll only deplete your profits, be a pain to manage, and struggle to pay rent.

Let’s see if Westland will live up to the demands of a successful investment.

Local Economy

The local economy in Westland is doing well. There are a lot of small and large businesses in the area, offering locals plenty of opportunities to secure well-paying jobs and afford better homes with higher rent.

“The local economy in Westland is built around small businesses,” Westland Major William R. Wild shared, as he gave out gift cards to small local businesses during Thanksgiving. “We use this day to remind folks that we can’t forget small business during the holiday. A lot of small businesses count on the holiday season because it is potentially the difference between making or breaking their business.”

Moreover, Westland’s Economic Development Department supports commercial, industrial and new residential projects in its development, expansion, and ongoing retention efforts. It also does real estate analysis to see which businesses are suited for the Westland market.

While Westland is somewhat reliant on the automotive industry—just like the City of Detroit—its economy remains to be quite diversified. There are many different types of businesses in the area, so even if one industry were to falter, the others would likely be able to pick up the slack.

Overall, the economy in Westland is in good shape. Businesses are thriving and there are plenty of job opportunities attracting new residents and increasing your tenant pool with well-earning citizens.

School Rankings

Greatschools reports several excellent schools in Westland based on a variety of measures (e.g., academic performance and equity), including the following:

  • - Hayes Elementary School (K-4)
  • - Johnson Upper Elementary School (5-6)
  • - Eugene B. Elliott Elementary School (K-4)
  • - John Glenn High School (8-12 and ungraded)
  • - Universal Learning Academy (PK-12)
  • - Adlai Stevenson Middle School (7-8)

If you want to purchase larger homes and attract tenant families with younger children, focus on investing in areas near these schools. Families will want to be in close proximity to these spots for them to bring their children to school easily—willing to pay a premium for the convenience.

Crime and Safety

Westland isn’t known for being a safe community, but it’s certainly not the most dangerous one out there. In fact, its crime rates are 19% lower than Michigan’s. Plus, similar to the situation in the City of Detroit, Westland crime rates will vary greatly from one street to another—an area deemed “unsafe” may only be a stone’s throw away from a perfectly safe spot.

NeighborhoodScout provides us with a heatmap to help you determine safer Westland neighborhoods:

Contain 800x800Source: NeighborhoodScout

Still, we highly suggest that you visit Westland yourself to see if the property you’re eyeing is located on a safe block. You won’t know the level of crime and safety until you’ve seen it for yourself.

Livability

The cost of living in Westland is lower than the national average. Still, even with its affordability, Areavibes gives Westland a Livability Score of 75/100, which is considered exceptional. This ranking is thanks to Westland’s amenities, cost of living, and housing options—easily attracting new people into the city.

Here’s a snapshot of the cost of living from Bestplaces:

Contain 800x800Source: Bestplaces

Moreover, Westland has an abundance of parks and bike paths, where residents can spend their weekends watching deer, foxes, and hummingbirds all year long. Westland also has automated recycling services in place to help the community stay hygienic and environmentally friendly.

Tenant Class and Demographics: B+

Lastly, let’s evaluate the potential tenant pool in Westland. As a rental investor, it’s essential to secure quality tenants who will retain the value of your property and generate positive cash flow. Here’s a general overview of the demographics in Westland:

  • - Income: The income in Westland is significantly lower than the greater Metro Detroit, Michigan, and the rest of the nation. This isn’t good news, as it means you can only charge so high in terms of rent—unless you take the time to seek out well-earning individuals.
Contain 800x800
  • - Unemployment: The unemployment rate in Westland is lower than in Metro Detroit and Michigan, which means many locals have stable job that enables them to pay rent timely and consistently. This is good news, as it means additional stability for your cash flow.
Contain 800x800
  • - Education: Westland residents have a similar educational level to the rest of Metro Detroit and Michigan. Although, it does have fewer degree-holders. Still, the majority of them are high school graduates and can already secure stable jobs.
Contain 800x800Source: Bestplaces

  • - Diversity: Niche provides us with the following breakdown for Westland’s racial diversity:
Contain 800x800Source: Niche

Based on the average income, unemployment rate, and level of educational attainment, Westland tenants won’t need too much management. Still, if you plan to invest in more than one property, we suggest that you hire a property management company to ensure that they all pay rent and maintain your assets.

You’ll have an easier time if you have expert managers handling the day-to-day tasks.

Contain 800x800Source: Google Maps

Overall Score: A

It goes without saying that Westland is an excellent place to invest in rental properties. That’s why we’ve given the city an overall score of “A”, mainly driven by the following factors:

  • Westland rent-to-price ratio is an impressive 1.31%, enabling you to generate positive cash flow and recuperate your initial investment in no time.
  • Westland property values are increasing by 13.8%, and its appreciation rates are among the top 10% in the nation. You can easily reap equity gains both in the long and short term.
  • Westland is an attractive place to live in, where tenants can secure well-paying jobs to afford the higher rent. You’ll have a large tenant pool consistently growing with responsible renters.

Given these advantages, we won’t be surprised if you invest in more than one Westland property. That said, things will get increasingly more difficult to manage as your portfolio grows. So we highly recommend that you work with a local property management company that’s familiar with Metro Detroit to help you navigate the risks and manage your rentals consistently.

Our team at Logical Property Management has more than two decades' worth of experience operating in the Metro Detroit area. We have the insider knowledge and expertise needed to become successful in the Detroit real estate market, having led many in-state and out-of-state investors into the area.

Get in touch with our team and get your slice of the lucrative Westland market today!

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This isn’t the last of our series! Our Deep Dive installments will continue until there’s nothing left in Metro Detroit to evaluate. If you have a special location you’d like us to prioritize, leave a comment below and we’ll provide the analysis for you as soon as possible.



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