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Posted 23 days ago

Deep Dive into Detroit Neighborhoods: North End

Contain 800x800Source: Anon

Today we’re Deep Diving into the North End, Detroit.

There are tons of opportunities for rental investors in this neighborhood, as long as you buy on the right street.

That’s why we’ve made this series exploring Detroit’s 105 neighborhoods.

With our extensive experience of nearly 30 years in local property management and investment, we offer an authentic, on-the-ground perspective of each area.

To get started, take our video tour through the North End, where we provide a detailed breakdown of each street and show you real rental investment opportunities:

If the North End piques your interest, stick around.

We’re going to evaluate the neighborhood based on key investment criteria such as:

  • Quality of housing stock
  • Market trends
  • Tenant profiles
  • Livability indices
  • And much more.

To wrap things up, we compile a Report Card and an overall score for the area, making it easy for you to compare and decide where to make your next investment move.

You can find links to all our previous Deep Dives here:

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Our goal is to explore every neighborhood in Detroit, providing you with detailed insights one at a time. If you're interested in data on a neighborhood not yet covered, let us know and we'll make it a priority in our future updates.

Sit back and enjoy a guided tour of Detroit's most exciting investment opportunities for landlords.

Overview

Today, we focus on the North End—situated north of Midtown Detroit, flanked by Hamtramck to the east and the historic Boston-Edison district to the west:

Contain 800x800Source: Google Maps

Back in 2020, we conducted a Deep Dive analysis of the North End and highlighted its transition from a Class C to a Class A neighborhood, urging investors to seize the moment for future gains.

Fast forward to 2023, and realtors now recognize the North End as one of Detroit's most sought-after neighborhoods, thanks to its proximity to downtown and its array of spacious single-family homes.

If you missed the wave, no need to worry. The North End still offers ample opportunities for both new and experienced investors. While interest in the area is growing, it remains less competitive than hotspots like Ferndale and Oak Park.

Here's a quick overview of the neighborhood's potential:

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With a population of 4,401, the North End boasts a density 35.8% lower than the Detroit average, offering significant room for development. This lower density results from a mix of vacant lots and buildings ripe for redevelopment, alongside ample green spaces and larger residential lots.

The area remains fertile ground for investment, whether you're looking to renovate or embark on new construction projects.

So, why is the North End so appealing to tenants, local businesses, and, by extension, investors?

  • The “Corktown Bubble”

Dan Gilbert’s $5.6 billion dollar investment into revitalizing Downtown Detroit has been reshaping the city since 2009.

Development has been moving north along the Woodward Corridor ever since: first Downtown, then Midtown, then Wayne State University and New Center, and now the North End. Ford’s $1B tech campus at Michigan Central Station in nearby Corktown is accelerating the process.

  • QLINE Expansion

The QLINE ends at Grant Blvd, but is soon to be extended to the North End, which will of course increase prices.

The tram line is set to come under new management in 2024 and hopefully undergo this much-needed expansion, but as early as 2016, speculators began buying up lots along the QLINE route in Highland Park and the North End, investing roughly $1 billion total in local real estate. And now those bets are paying off.

  • Famous for its Community

This is a cultural hub of Detroit.

Once home to Motown legends like Diana Ross, Aretha Franklin and James Brown, the North End maintains a strong sense of community today that makes residents proud to call it home.

It’s also known for its public spaces and community gardens, which residents maintain on disused lots of land.

  • Great Investment Potential:

The North End is a perfect example of the dichotomy in Detroit, which for us investors means opportunity.

For example, on the corner of Oakland Ave and Marston Street in southeastern North End, you’ve got freshly-renovated homes, well-kept gardens, and new refurbs taking place on the west side of Marston St.

But when you cross Oakland Ave, the east end of Marston has several empty lots, with some abandoned homes up for sale. The development hasn’t reached that far yet, but it will.

The North End attracts tenants, businesses, and investors for several reasons.

  • Benefits from the Corktown Bubble and nearby tech developments: The "Corktown Bubble" has extended development northward due to Dan Gilbert's $5.6 billion revitalization and Ford's nearby $1 billion tech campus.
  • Upcoming QLINE extension to boost property values: With the QLINE expansion poised to increase property values, interest in the area is growing.
  • Strong sense of community and cultural heritage: This neighborhood celebrates a vibrant community culture, once home to Motown legends like Diana Ross and James Brown.
  • Opportunities in both renovated homes and vacant lots: Investors are finding under-$50k properties ideal for conversion or new construction, promising reliable cash flow.

All in all, the North End is a vivid example of Detroit's diverse neighborhood dynamics, offering substantial potential for those who select the right street.

Housing Market

It’s time to take a look at the data. We’ll start with general sale and rent trends for the North End property market, and then take a look at some listings for sale and rent in August 2024.

Sale Trends

Average home prices in the North End have grown by 55.8% since 2020, and 20.2% in the past year alone.

This steady climb in property values is being caused by QLINE extension and the Ford tech campus at Michigan Central Station in Corktown.

In the past 7 years, prices have nearly tripled:

Contain 800x800Source: Zillow

Back in 2020, the average home price was $94,660. As of August 2024, it’s $147,495 - almost double the Detroit average of $74,882.

But there are still great deals to be found here.

Want more info on specific investment opportunities in North End, Detroit, or Michigan? for a free consultation.

Rent Trends

In 2020, North End's average rent was $657, with upscale 3-bedroom townhouses fetching $1,800.

Today, the average rent has surged to $1,250, nearly doubling over four years, offering properties that meet the 1% rule (monthly rent = 1% of purchase price + repairs).

Current listings primarily include townhouses and condos, with 2-3 bedroom units renting for $1,200-$1,600 based on finishings. Single-family homes are scarce and in demand, with 3-4 bedroom houses renting for $1,800-$2,400.

Take a look at this then-and-now view of the market evolution since our last North End Deep Dive:

Contain 800x800Source: Rent.com and Zillow.com

Across Detroit prices have risen by 20.7% and rents have risen 1.7% YOY on average, so the North End is performing very strongly compared to other areas in the city.

Investment Opportunities in North End

There are 17 units listed for sale on Zillow in the North End in August 2024:

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North End offers a variety of housing options, including townhouses, newly-renovated properties, and single-family homes that require extensive renovation. We'll explore these further shortly.

Currently, as of August 2024, the rental market is tight with just 39 properties available, predominantly located west of Oakland Ave, as shown on this Zillow map:

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As you can see, most rentals here sit in the $1,200-$2,400 range. And again, most of them are west of Oakland Ave, leaving a lot of opportunity for investors who can develop properties on the other side of that line.

Now, let’s zoom in on a few of these properties and run the numbers.

Example Investment Property

Let’s take a look at two different properties on the market right now in the North End, to show you the type of rental investment opportunities here.

The Turnkey Option

Let’s first look at this 4-bedroom, single-family unit near Oakland Ave in northern North End:

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With a Zestimate rental value of $1,615 monthly, this property aligns with the 1% rule for rental investors. But negotiating below $138,700 could mean an RTP ratio of 1.16%.

Converting the property into a duplex, with an additional $25k investment, could yield two 2-bedroom units renting for up to $1,200 each. This would result in:

Monthly Rent: $2,400

After-Repair Value: $180,000

RTP Ratio: 1.3%

Even at full asking price, the potential is significant; securing it for $138,700 would push returns even higher. Plus, there's added value from the anticipated public transportation development in the area.

Not bad, right?

The Fixer-Upper

For those ready to tackle substantial renovations, the North End offers lots of opportunity.

Numerous disused properties are available at remarkably low prices, waiting for savvy investors to transform them. Just like this one:

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While this much work is daunting for some, units like this have a lot of potential.

The neighboring house has just been refurbished, and this one is primed to follow suit. Before dismissing the idea, look at the property just three doors down on the same street:

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Same location, same number of bedrooms, same lot size—but at 10 times the price.

This just goes to show the potential of investing in an emerging neighborhood before it attracts widespread attention.

The 650 Melbourne St. property, while needing significant renovation, could rent for approximately $2,400 monthly as a single-family home. Let's crunch the numbers:

Monthly Rent: $2,400

Purchase Price: $30,000

Repair Costs: $125,000

After-Repair Value: $155,000

RTP Ratio: 1.55%

This doesn't even account for North End's average property appreciation rate exceeding 20% year-over-year, nor the fact that post-renovation, this property could easily surpass a $300k valuation.

Area and Tenant Quality

Now that we’ve explored the North End market, let's delve into a qualitative analysis to assess the area's livability and tenant appeal.

We'll examine housing stock quality, tenant demographics, area development, and crime and safety to provide a comprehensive view of what this neighborhood offers.

Housing Stock

Home ownership in the North End stands at a modest 30%, but Detroit is actively encouraging residents to buy and renovate homes, signaling potential growth in ownership rates.

Although several vacant lots remain, the dedicated community has transformed many into cityscape gardens, and most occupied homes are newly renovated with well-maintained yards.

The housing stock primarily dates back to around 1910, presenting a mix of move-in-ready and fixer-upper properties. As with all older homes, investors should be mindful of age-related challenges such as outdated wiring, plumbing, and structural issues to effectively manage renovation budgets.

Tenant Stock

While the property itself is crucial, tenants are the next key factor in rental success.

In the North End, tenant demographics are shifting from primarily Wayne State University students (Class C) to young tech professionals (Class A).

Here’s a breakdown of North End tenant demographics:

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This change is driven by developments like Ford's new $1B AV campus, just a 10-minute drive away, and the QLINE expansion, which simplifies commuting to Corktown and Downtown. As a result, the area is transitioning from Class C to Class A, attracting higher-quality tenants along the way.

Economic Development

Detroit is undergoing a massive resurgence with significant investments and business influx , causing property price increases in areas like Corktown.

The North End, too, is set for promising developments in 2024:

  • North End Neighborhood Framework Vision: A public initiative focusing on preserving cultural heritage, expanding parks, enhancing neighborhoods, creating pedestrian-friendly zones, and supporting local businesses.
  • The Beauton Development: A $7.3M mixed-use residential project providing 29 affordable housing units, addressing rent pressure as investment grows.
  • The M1 Penske Tech Center: A $6.9M investment boosting the M1 Rail, enhancing connectivity from Downtown to the North End.

These projects indicate rising property values, making it advisable to buy sooner, rather than later.

Crime and Safety

The crime rate in the North End aligns with broader Detroit trends, and many long-term residents report positive experiences, with few complaints.

However, given the neighborhood's block-by-block nature, choosing your investment location wisely is crucial. It's advisable to focus on areas east of Oakland Ave, as moving west towards Highland Park may present challenges with more vacant lots and neglected structures.

Investment Report Card

To evaluate the North End's potential for rental investing, we've developed a standardized Report Card for each neighborhood:

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In a word, the North End spells "Potential" for buy-and-hold investors. Here's why:

  • Rising prices and rents, promising appreciation and cash flow
  • Improving tenant demographics
  • Influence from the "Corktown Bubble"
  • QLINE expansion likely to boost property values further

As one of Detroit's fastest-growing areas, strategic street selection is crucial.

Focusing on specific blocks rather than entire zip codes ensures a smart investment, especially for those less familiar with Detroit’s evolving neighborhoods.

In summary, the North End is an excellent investment opportunity if you know how to choose the right location.

Stay tuned for our upcoming Deep Dives into other Detroit neighborhoods. If you have a specific area in mind, leave a comment, and we'll be sure to cover it in one of our next installments.

Want to explore investment properties in the North End? for a list of our available units.



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