Deep Dive into Detroit Neighborhoods: Brightmoor

Source: WDET News

The City of Detroit is a hotspot for rental property investors—with a combination of affordable homes below $100k and increasing demand for single-family homes in one area.

However, while opportunities for solid cash flow are abundant, the city is also immensely diverse.

There are 84 neighborhoods in the City of Detroit, all with unique characteristics, property conditions, and tenant demographics. It goes without saying that it takes an expert to know how to navigate the risks and find good opportunities in Michigan’s Motor City to reap the famed returns.

Because of this, we’ve decided to use our experience as local residents and property managers in Metro Detroit to create comprehensive guides that evaluate each neighborhood in the City of Detroit. Each of these reports has all the information you need to know exactly where to buy, where to avoid, and where you might find good deals with a bit more effort.

For this installment, we’re taking a look at Brightmoor—the neighborhood also known as “Blight More.” From the nickname itself, you can already tell that this neighborhood can be tricky to invest in, but if you do your due diligence and invest EXTREMELY carefully, it is still possible to find some decent opportunities here.

City of Detroit

First, let’s look at the big picture and see the City of Detroit as a whole. There are a total of 11 regions, as you can see in the map below:

Source: Wikipedia.com

Now, these regions have their own personality and features. Here are a few examples:

• - Downtown Detroit is a central business district.
• - Midtown is a mix of university, business, and cultural areas.
• - New Center is a historic district with commercial and residential areas.
• - Southwest is largely residential.

Now, Brightmoor is located in the Upper West region of the city. The 4-square-mile (10 km2) neighborhood is bordered by Puritan Road to the north, Evergreen Road to the east, CSX railway to the south, and Outer Drive West, Dacosta Street, and Telegraph Road to the west.

Can’t imagine where it is? Here’s a map that shows you where Brightmoor is in the city (hint: it’s number 100). If you see any hyperlinks, those will lead you to previous Deep Dives that we’ve written:

Source: Loveland’s Detroit Neighborhoods Map

Brightmoor Neighborhood

Based on City-data, Brightmoor has a population of 28,709, with a density of 7,848 people per square mile. Its density is 70.65% higher than the overall average of the City of Detroit. This means that there are more people residing in Brightmoor due to its affordability.

Source: Google Map

Back in 1921, developer Burt Eddy Taylor bought a piece of land just 1.6 miles away from the City of Detroit at that time. He created a neighborhood called Brightmoor with the vision of creating inexpensive housing for migrants from the Southern United States.

Soon, Burt Eddy Taylor recruited workers from Appalachia to join the city’s expanding automobile manufacturing plants. As we all know, the City of Detroit is nicknamed “The Motor City” of Michigan for its prominence in the industry. The population increased, and additional land was added to Brightmoor for residents to find low-cost, mass-produced single-family housing to live in. They were comfortable enough for a decent lifestyle.

By 1926, the City of Detroit annexed Brightmoor.

But for the last 40 years leading up to 2011, the population in Brightmoor dropped. There was heightened crime, extreme poverty, abandoned homes, and dying businesses. The housing stock was all Class C and D properties, and the neighborhood looked like it was dressed for Halloween all year round.

Source: Flickr, taken by R.Miller96

Nevertheless, Brightmoor is bouncing back through private-sector efforts and more used-to-be vacant lots are being occupied.

In 2013, a nonprofit organization called Detroit Blight Authority started to clean up trash from a 14-block area—including 500 residential lots. This initiative tackled 70 vacant and distressed homes, and is set to do more in the coming years.

Yes, the majority of Brightmoor homes are still Class C and D. But cleaning up the neighborhood is the first step towards a brighter future, indicating the possibility of good investment opportunities in Brightmoor soon.

According to an article by Model D, “Mr. Taylor knew that the lack of homebuilding could be the handicap to Detroit's further progress and he recognized that the man who met the demands of the city for housing had before him the most splendid chance for the attainment of success,” which is why he directed most of his efforts into developing Brightmoor subdivisions.

In fact, new ideas to improve Brightmoor have been popping up. For example, Detroit Future City suggested that Brightmoor uses its vacant land as a place for “alternative use,” where empty areas can be used for large-scale blue infrastructure projects (e.g., low-lying lakes) and community agriculture spaces—using vacant land in creative, reinventive ways.

Those from the College for Creative Studies Community Arts Partnerships program even asked the Blight Authority to transform Brightmoor into an asset for locals and a destination for visitors, resulting in Brightmoor Alliance receiving a Knight Arts Challenge grant of $50,000 to improve the area.

To quote Riet Shumack, founder of the group Neighbors Building Brightmoor, “Brightmoor has a lot of beauty in it already," and can take advantage of its existing assets. Even the recent art installation located at Burt and Lyndon attracted many interested visitors, showing the unique potential for blighted homes to become attractive art pieces.

Looking at how the neighborhood is doing, is it the right time to invest in rental properties here? Or is it better to focus on other areas, like Islandview and the North End, instead?

Let’s take a closer look.

Investment Opportunity

As with any real estate investment, the most important factor is monetary returns. Yes, there are multiple factors to consider when evaluating an opportunity. But financial viability remains in the top spot.

Read on to see the average property condition, rent amount, and home value of Brightmoor properties. These are key indicators of the profitability of a rental investment, aside from the quality of tenants you’ll acquire.

Property Condition

According to City-data, the majority of homes in Brightmoor were built from 1950 to 1959. This means that you can expect homes aged 62 to 71 years old in its housing stock—so ancient, we know, considering that the industry finds homes that are more than 50 years old to be “old.”

Source: City-data

Given that homes are older in Brightmoor, you’ll need to conduct a thorough inspection before purchasing. You’ll want to look out for the following common problems:

• - Lead-based paint
• - Ungrounded outlets
• - Underpowered electrical systems
• - Structural damages
• - Outdated water sources
• - Pest infestations

The list isn’t exhaustive. But it gives you an idea of how demanding it is to manage an older housing stock. You’ll certainly bump into underlying issues that may ruin your renovation budget—increasing your chances of depleting profits from the very beginning.

If you want to invest in Brightmoor properties, work with a professional inspector to fully understand the condition of your property. You must budget everything accurately before purchasing an older home.

Add to that the blight issues we just discussed, and the average property condition isn’t great here overall.

Average Rent and Rent-to-Income Ratio

According to Niche, the average rent in Brightmoor is $876 per month—2.62% lower than the $899 average in the rest of the city. The good thing is this is slightly higher than the majority of rent paid back in 2021, where City-data shows that most Brightmoor residents paid an average of $585 per month:

Looking at the breakdown per size, Weichert provides the following figures based on the average gross rent from the US Department of Housing and Urban Development (HUD):

• Studio apartment: $499
• One-bedroom unit: $568
• Two-bedroom unit: $680
• Three-bedroom unit: $813
• Four-bedroom unit: $838

Now that we know the average rent, let’s compare it to the average income for the rent-to-income ratio. This handy calculation will help us see if Brightmoor residents can pay rent each month.

Niche reports that the average household income in Brightmoor is $33,983 per month. While this figure may seem high, it’s possibly because Brightmoor has more homes with families than the rest of the city, having 59.2% family households, compared to the 51.86% average across the City of Detroit.

City-data shows that most Brightmoor households earn a range of $10,000 to a maximum of $39,999. More specifically, residents under 25 years old only earn an average of $16,708, while the population over 65 has a median income of $53,750.

Source: Point2Homes

There’s also a high poverty rate in Brightmoor, where some families are living with an income that’s below the federal poverty threshold. That means finding tenants who can afford to consistently pay rent could be difficult unless you’re going with Section 8.

Home Value, Price, and Appreciation

Niche reports that the median home value in Brightmoor is $45,989, which is 20.29% lower than the median value of $57,700 in the City of Detroit. Based on Zillow, however, the typical home value in Brightmoor is $50,188—much higher than Niche’s estimate, still it’s less expensive than over 90% of Michigan neighborhoods. You can see their forecast below:

Source: Zillow

Yes, property value and sales price are important. But, more than this, you need to check the rent-to-price ratio when choosing rental properties. Doing so helps you assess the potential cash flow of your investment, so you can shortlist your options to a few profitable properties.

According to industry standards, the estimated monthly rent should not be more than 1% of the total house value—including the purchase price and necessary renovations.

At an average rent of $876 per month and a median home value of $50,188, the rent-to-price ratio in Brightmoor comes in at an impressive 1.7%. This reflects the average of the City of Detroit because the city has one of the highest ratios out of the 50 biggest cities across the country.

Nevertheless, don’t forget that the neighborhood is filled with Class C and D properties. This means you might spend a fortune just bringing it up to rental standards—significantly dragging down the rent-to-price ratio and potential returns.

Just look at the property condition of the listing on Zillow:

Note that the majority of the houses for sale in Brightmoor have a condition like the one above. That’s why you must get a good grasp on how classes work, so you know what to expect from investing in a Class C or D property like this one in Brightmoor. The neighborhood is certainly not beginner-friendly.

However, looking at appreciation, Redfin reports that home sale prices in Brightmoor are slowly picking up. Sales prices increased by 17.6% since last year, with an average of 45 days before properties are sold (almost the same as Island views

Redfin reports that home sale prices in Brightmoor have been declining in recent years. Sales prices decreased by 26% since last year, with an average of 45 days before properties are sold (significantly faster than Islandview’s 90 days).

Specific appreciation rates can’t be determined at this time, but Brightmoor seems like it’s getting brighter than it used to be. Nonetheless, it might be difficult to find a property that doesn’t require too many renovations to help you achieve a higher cash flow and potential equity gains.

Potential Tenant Pool

Now, as a rental investor, you want to acquire properties that will attract a quality tenant pool. It’s all the difference between tenants who will pay rent on time and tenants who’ll only trash up the rental unit.

So, let’s evaluate the tenant pool in Brightmoor to see what kind of tenant management you’ll need. We base our assessment on the key factors: income, employment, and racial diversity. These factors will help you budget for potential costs and foresee the type of tenants you’ll have to manage.

Tenant Demographic: C+

As mentioned earlier, you need to understand the different tenant classes. In this particular case, Class C and D tenant pools will require intensive property management. Brightmoor tenants may not be very responsible for property maintenance, and payments, and may have unstable income and employment.

Average income: Niche shows that the median household income in Brightmoor is $33,983. The average income is slightly lower than the average of $34,762 across the City of Detroit. Therefore, there’s a high chance you can find tenants with well-paying jobs.

Source: Niche

As you may find many tenants with incomes below the average, you need to conduct a thorough tenant screening to ensure that their income is at least 3x of the rent amount you’ll charge.

Unemployment Rate: Unfortunately, Areavibes reported that Brightmoor has an unemployment rate of 13.1%, which is 1.2% higher than the average of the City of Detroit. Although it’s almost the same as the City of Detroit, a high unemployment rate can be challenging for investors, considering that you’ll need tenants to have stable employment to pay monthly rent.

Diversity: Terms of racial diversity, Niche provide the following breakdown for Brightmoor:

Neighborhood Livability: D

The quality of a tenant pool works hand-in-hand with the quality of the neighborhood. As a rental investor, you want properties in areas that will attract the best tenants possible. Doing so increases your chances of having tenants who are more responsible for taking care of the home, paying rent, and sticking to lease agreements.

So, here’s a snapshot of what life is like in Brightmoor:

Crime and Safety: Brightmoor isn't the safest neighborhood. According to Niche, crime rates across all types are significantly higher in Brightmoor than in the country. Areavibes also reports that Brightmoor’s crime rate is 493% higher than Michigan’s and 343% higher than the entire United States.

Transportation and Walkability: The majority (74.4%) of Brightmoor residents drive to work, while the rest carpool (10.6%), take the public transit (7.2%), walk (1.5%), or ride a bicycle (0.4%). However, based on Areavibes’s surveys, locals say Brightmoor’s public transit isn’t the most accessible, and it’s difficult to walk to grocery stores.

Schools: Brightmoor is zoned to Detroit Public Schools (Gompers K-8 and Murphy K-8) and Frank Cody High School outside of the neighborhood.

The only high school within Brightmoor is the Detroit Community Schools—one that does not have the best track record. Only two students from this school were ever deemed college-ready by ACT college entrance exam standards, and the teachers tend to be inexperienced.

With high crime rates, difficult transportation, and less-than-favorable schools, Brightmoor doesn’t exactly attract quality tenants looking for a good place to live.

Source: Google Maps

Overall score: D

Based on our research and experience as a property management company in the City of Detroit, we’ve scored Brightmoor a “D” for rental investing.

The neighborhood isn’t the best area for most newbie investors, as Brightmoor has lots of lower-class properties and tenant pools. You’ll have to be well-informed and experienced to make Class C and D rental properties profitable, not to mention all the risks you have to manage.

Now, all property scoring systems are inevitably subjective. So we suggest that you use our Deep Dives only as a guide to kickstart your research on Detroit neighborhoods. You may still find great investment opportunities in Brightmoor, contrary to the information we’ve presented in this article. Even on a “bad” block, you can still find decent pockets of potential investment opportunities, if you do a lot of due diligence first.

But if you want our advice, steer clear from Brightmoor and focus on other parts of the city instead. The City of Detroit has many other neighborhoods that offer less risky investments—you only have to visit our other Deep Dives to see what we mean!

Do you have other questions? Drop us a message, and we’ll gladly offer our advice and guidance.

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This is part of our ongoing Deep Dive series on Detroit neighborhoods. Should you have a specific area you’d like to request, comment below, and we’ll prioritize it in our next installments!