New College Admission Law in Michigan Brings Opportunity for Landlords
Source: Marcus Loke on Unsplash.
10 of the 15 public Detroit Universities are raising the minimum GPA requirement for admission. The 10 universities bringing their enrolment criteria up include the following schools:
- - Central Michigan University
- - Eastern Michigan University
- - Ferris State University
- - Lake Superior State University
- - Northern Michigan University
- - Oakland University
- - Saginaw Valley State University
- - University of Michigan-Dearborn
- - University of Michigan-Flint
- - Wayne State University
Each institution will implement the changes in the 2024 fall admission cycle.
You might be wondering: What does this have to do with real estate? Why are we talking about education?
One simple reason: the city's emergence as a competitive university location has the potential to impact the Detroit real estate market significantly. Here, we'll explore why Detroit's growth in the education sector can be a game-changer for landlords.
5 Factors Why Improved Education Will Improve Detroit's Real Estate Market
Here are some facts to inform you about why improving Detroit's education system can prove a benefit for real estate investors and landlords:
- * In 2023, the median home price in a college town was $377,800, reflecting a 7% reduction compared to the national average of $406,200.
- * Homes in college-centric locations appreciated by 4%, outpacing the national average of 1.6%.
- * Indiana, PA, emerges as a standout choice, with its comparatively affordable home prices at $160,000 and a projected growth rate of +12%.
So, how does this translate to Detroit? The average home price in Detroit is more affordable than most of the country at $85,0000 and is expected to grow by nearly 11% in the coming year. Therefore, by expanding your property portfolio early, before Detroit Universities implement their changes, you can reap exponential rewards when the new students arrive.
But to give you more insight, here are 5 reasons why an improved education system will enhance the Detroit real estate market.
#1 Increased Demand for Student Housing
Detroit's ascent as a university hub brings a surge in student population. As reputable educational institutions attract students from across the country and even internationally, there's a growing need for quality student housing. Savvy landlords can capitalize on this increased demand by providing well-maintained, affordable housing options tailored to the needs of university students.
#2 Stability in Rental Income
One of the primary benefits of catering to a student demographic is the stability in rental income. University students typically sign leases for the entire academic year, providing landlords with a predictable and consistent income stream. This stability can appeal to investors looking for long-term financial security in their real estate portfolios.
#3 Opportunities for Property Appreciation
The establishment and growth of universities often lead to neighborhood revitalization and increased property values. As educational institutions expand, they invest in infrastructure, public spaces, and amenities that enhance the overall appeal of the surrounding areas. This can result in property appreciation, presenting landlords with the potential for significant returns on their real estate investments over time.
#4 Diversification of Tenant Pool
A thriving university scene attracts students, faculty, staff, and other professionals associated with the academic institutions. This diversification of the tenant pool can be a strategic advantage for landlords. By offering housing options that cater to different demographics, landlords can mitigate risks associated with economic downturns and maintain a steady occupancy rate.
#5 Community Development and Urban Renewal
As universities contribute to a city's cultural and economic vibrancy, there is often a ripple effect in terms of community development and urban renewal. The presence of academic institutions can attract businesses, enhance local amenities, and create a more attractive overall environment. For landlords, this means an increased likelihood of attracting quality tenants and fostering a positive living experience for their residents.
2024 Education Reform Will Benefit Detroit Real Estate
Detroit's evolution into a competitive university location presents a unique and promising opportunity for landlords in the real estate market. By strategically aligning investments with the growing demand for student housing and capitalizing on the positive impact of academic institutions on neighborhoods, landlords can position themselves for success in this dynamic and evolving landscape.
How do you expect the growth of the student population will affect Detroit’s real estate market? Share your theories.
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