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Posted 2 months ago

Deep Dive into Detroit Neighborhoods: Corktown

Contain 800x800Source: Let’s Detroit

Welcome to the vibrant landscape of Detroit's rental market, where opportunities abound.

But navigating the city's 105 diverse neighborhoods can be daunting.

Whether you're a seasoned investor or just beginning, understanding each area's unique potential is crucial. That's where our expertise comes into play.

With over 20 years of experience as Detroit natives and property managers, we've crafted the "Deep Dive" series to simplify the complexities of this expansive city.

This series offers you in-depth insights into each neighborhood through video walkthroughs and detailed analyses. Our goal is to help you to make strategic investment decisions that maximize your returns.

Here’s an overview of the city’s 105 different neighborhoods, including links to our previous Deep Dives:

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For each area, we provide you with neighborhood-specific evaluations and comprehensive "Report Cards" to help you confidently navigate the Motor City's real estate market.

So without further ado, let’s turn our attention to today’s Detroit neighborhood breakdown: Corktown, Michigan.

Overview

Corktown, Detroit's oldest neighborhood, brims with historical charm and revitalized energy.

Contain 800x800Source: Google Maps

Unlike more affordable Detroit areas, Corktown offers investment opportunities with higher stakes and rewards, featuring class B properties and rents starting at $2,000 per month. Though entry-level deals are rare, astute investors can find value amid its gentrification.

Here’s a quick overview of Corktown:

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With property values around $300,000, Corktown stands apart from budget-friendly zones, yet it attracts high-quality tenants, drawn by the influx of Ford tech jobs. This makes Corktown a prime spot for those investing in Detroit's resurgence.

Check out our recent video walkthrough to see its remarkable transformation for yourself: 

Corktown is attracting attention from tenants, businesses, and investors for its unique combination of historic charm and contemporary development:

  • Central Location: Situated in the heart of Detroit, Corktown boasts proximity to key landmarks, offering a unique blend of historic charm and modern convenience.
  • Ford’s Tech Campus: The revitalized Michigan Central Station by Ford has become a hub for innovation, attracting new residents and businesses, boosting Corktown's allure.
  • Vibrant Community: Michigan Avenue thrives with diverse local shops, trendy bars, and restaurants, embodying the spirit of Detroit's renaissance.
  • Architectural Charm: With roots dating back to the 1830s, Corktown's mix of historic homes and new developments offers rich investment opportunities.
  • Investment Potential: While properties under $300,000 are scarce, the area promises lucrative prospects for those who can capitalize on its growth and appeal.

We’ll see in a moment how much of an impact this has had on the property market here in recent years.

Market Analysis

Corktown's real estate landscape is now dominated by condominiums, with townhouses becoming increasingly rare.

If you're on the hunt for single-family homes, having insider knowledge is essential—and that’s where we come in.

Let’s break down the neighborhood for investors:

Sale Trends

Since Ford revealed its plans for redeveloping the Michigan Central Station in 2018, the property market in Corktown has experienced a substantial transformation.

Over the last six years, the average home price has soared from $314,000 to an unprecedented $467,889:

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That represents an increase of 7.2% YOY, which puts prices in Corktown 84% higher than in Detroit as a whole ($74,882).

Rent Trends

As property values have risen, rental costs have followed suit.

In Corktown, a 1-bedroom apartment averages $2,237 per month, while a 3-bedroom unit typically rents for $5,151. With single-family homes having a median sale price of $467,889, finding properties that align with the 1% rule is feasible but challenging.

While rents across Detroit have generally increased by 1.7% annually, Corktown has experienced significantly higher growth, approaching 100% year-over-year.

Contain 800x800Source: Rent.com

Despite the high costs, properties in Corktown promise substantial rental returns as rental rates continue to rise.

Rental Properties in Corktown

As of August 2024, the real estate market primarily consists of condos and apartments due to its close proximity to Downtown Detroit.

While there are some delightful 19th-century single-family homes and townhouses, finding one for less than $500,000 is rare. Condos in the area often exceed the $500,000 mark, reflecting the area's desirability and current market trends.

Just take a look at the current listings on Zillow:

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Let’s break them down by their housing type to give you a better idea of what’s really available on the market right now:

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Given that most properties in Corktown are either new or recently renovated, opportunities to enhance value are limited.

So, where should investors focus their attention?

Securing a fixer-upper on highly coveted streets like Leverette or Wabash presents a significant opportunity.

Alternatively, the best prospects lie in acquiring teardowns or vacant lots suitable for new constructions, ideally for multi-family units or townhouses.

The rental market demand in Corktown is currently high, yet there is a notable shortage of family homes available for rent. As of August 2024, only 107 rentals are available, with just one being a townhouse, and no single-family homes listed:

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In Corktown, the majority of available properties are condos located in modern or renovated complexes such as the Perennial Corktown and Elton Park Corktown Apartments.

As of August 2024, here are the available rentals:

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Located in the desirable residential area of Leverette St, this charming duplex in Corktown is on the market for $599,000 as of August 2024.

Featuring two beautifully renovated apartments—one on each floor—this property preserves the historical allure of its 120-year-old structure while offering modern convenience.

Each unit is expected to attract a monthly rent of at least $2,500, providing a combined rental income of $5,000, which equates to an RTP ratio of .83%.

With both rental rates and property values on the rise, this duplex represents a promising turnkey investment opportunity, showcasing impressive appreciation (+406%!) over the last ten years:

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You can see from the graph that this year has seen a notable surge in property prices, coinciding with the reopening of the Michigan Central Station development.

If you're curious about more detailed insights or specific data, feel free to reach out to us.

Now, let's shift our focus from the numbers to a more qualitative evaluation.

Area and Tenant Quality

Securing reliable tenants is essential for maximizing rental income and reducing management challenges. The quality of tenants often correlates with the neighborhood's appeal.

So, what makes Corktown attractive to tenants?

Its rich historical character, closeness to Downtown, and the influence of Ford's new mobility innovation district all contribute to elevated property values and strong tenant interest.

Let’s delve deeper into these attributes to understand their impact on rental opportunities in Corktown.

Housing Stock

In Corktown, home ownership is relatively low, with just 35% of residents owning homes, while 65% rent as of 2024.

The neighborhood boasts a diverse housing stock that includes historic residences from the late 19th and early 20th centuries alongside modern condo developments, particularly those offering views of the former Tigers Stadium.

For investors, the potential lies in revamping older homes that require renovation, though such opportunities are scarce and highly competitive.

Alternatively, Corktown presents a rare chance to profit from developing vacant lots, as land values here are exceptionally high. For instance, a lot overlooking the old Tigers Stadium is available in August 2024 for $150,000:

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If you want to find out about investment opportunities here, about listings in Corktown.

Tenant Stock

Corktown continues to shine as one of Detroit's premier neighborhoods, renowned for its appeal to young professionals, rich diversity, and top-tier livability.

Residents celebrate its family-friendly, safe, liberal, and diverse environment, complemented by a trendy, hipster flair.

Here’s a breakdown of the types of tenants to expect in Corktown:

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There are some challenges in accessing precise Census data here, so we have to acknowledge that the available insights are outdated, stemming from a 2019 report. As of August 2024, no new data has emerged to reflect the area's dynamic changes.

With that being said, here’s what we can tell you about the tenant stock here:

  • Demographic trends reveal that Corktown residents generally earn significantly more than the Detroit average, boasting higher educational achievements.
  • With 65% of the population opting to rent, the neighborhood is home to more young professionals than families.
  • The emergence of high-quality tech jobs, particularly from Ford's autonomous vehicle center, has substantially enhanced Corktown's appeal, attracting tech-savvy professionals eager to live close to work and enjoy modern amenities in this revitalized area.

In conclusion, Corktown stands out as a Class B/A neighborhood, drawing Class B/A tenants with its unique blend of history, innovation, and huge economic opportunities.

Economic Development

Corktown has undergone a remarkable transformation in recent years, spurred by several key development projects that have revitalized the area and enhanced its appeal:

  1. On June 13, 2004, Ford reopened Michigan Central Station as a hub for autonomous vehicle technology, investing nearly $1 billion into Corktown.
  2. The Michigan Central Station development has further driven growth, turning previously unused structures like the Book Depository into Newlab @ Michigan Central, an incubator attracting startups such as Grounded, a smart-electric RV manufacturer.
  3. The Elton Park Corktown project, completed in 2019, introduced six apartment buildings and 11,400 square feet of retail space.
  4. Detroit City Football Club has unveiled plans to construct a soccer stadium in Corktown, anticipated to open in 2027.
  5. The Greater Corktown Neighborhood Framework Plan aims to deliver 842 new housing units over the next six years, with 60% earmarked for affordable housing.

These initiatives have significantly accelerated property value increases in the last six months and are expected to sustain this upward trend well into the future, solidifying Corktown's status as a desirable and dynamic neighborhood.

Crime and Safety

Corktown's crime statistics align closely with those of the broader Detroit area.

Feedback from Niche.com indicates that many residents perceive Corktown as "pretty safe," a sentiment echoed in their reviews of the neighborhood.

Although safety is a concern in certain Detroit locales, Corktown's swift growth and development offer a sense of security, enhancing its appeal as a promising place to live.

Investment Report Card

Let's piece together the comprehensive evaluation of Corktown using our standardized Report Card to rate its performance:

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Our overall assessment is this: Corktown stands as a remarkable success story in Detroit's revitalization narrative, illustrating a significant turnaround from its days of under-$10k teardown houses and vacant lots, to a neighborhood where land now commands at least $70 per square foot.

The area presents lucrative investment opportunities, whether through the renovation of historic homes or the development of new properties, each promising attractive rental returns.

Although Corktown might not be the most suitable starting point for novice investors, it exemplifies the potential gains awaiting those who invest in Detroit's rapidly advancing neighborhoods.

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 Corktown? for a list of our available units.



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