All Forum Posts by: Anthony Grinblat

Trying to figure out the best place where to invest your money can be a never-ending spin. All investments have their advantages and disadvantages. If your main priority is to get the most return for your money, Detroit is you. Seriously! If you don't believe us, see what CNN Money and RealtyTrac are saying about investing in Detroit real estate. The national annual return average for rental properties is 10%, which is dwarfed by Detroit's annual average of 30%. With three times the return on investment, it is no wonder why everyone from Belgium to China wants to invest in Detroit. The size of Detroit is usually what surprises most people, 5,142/sq mi (1,985/km2). You can take the cities of Boston, San Fransisco and Manhattan and fit them comparability with the Detroit city limits. The massive size of the city coupled with the bottoming out of the population to 680,000 in 2013, the city has seen a large increase in housing demand. As of 2015, the population of Detroit has risen 3.5% to 713,000. The population increase is a direct result of new companies coming into the city and a hiring boom in the technology field. The people that are being hired into this industry are millennials with a strong ambition to live in an urban environment close to work. Other challenges millennials are facing is the "Red Tape" associated with purchasing a home. Down payment, good credit score, proof of income, etc. are all thing hindering young people from purchasing a home. Also, many young professionals are opting out of the home purchase process all together so as to not me tied down to one location in the event they want to relocate across the state or country.

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Return On Investment or ROI in real estate is calculated very simply: ($ X 12) / Total Investment, where $ is the monthly rent multiplied by 12 months and all divided by the total amount spent on the investment. So for example, if a property cost you $40,000 and you rent it out for $800 per month, in a 12 month period you collect $9600 in rent. When you divide $9600 by $40,000, your ROI is 24%. By anyone's standard that is a great return on investment. Believe it of not but in Detroit that is on the low end. According to CNN Money and RealtyTrak, the average ROI in Detroit is 30%, which is three times the national average. These high returns draw notice of investors from all across the world. The Chinese are not the only ones playing the international investment game; The Netherlands, Belgium, France, Luxembourg, Russia, United Arab Emirates and everyone in between is taking advantage of Detroit's high real estate ROI. Detroit offers the best ROI for real estate investment properties because of the high demand for rental properties by everyone from life-long city residence to new millennials joining the workforce. Millennials (people born after 1995) especially enjoy the comforts of renting in Detroit because of the new urban-dwelling culture and non-commitment. Millennials saw first hand the draw-back and horrors of owning personal property (versus investment property) throughout the credit/housing crisis. Today, they prefer to rent in new cool sprawling urban areas where they have an easy way out if they need to relocate. Good performing real estate investment properties in Detroit are usually $10,000-$20,000 (requiring rehabilitation) and $20,000-$40,000 (fully furnished and ready to rent). Average rent for a two-bedroom one-bath is $700-$800 per month.

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