Real estate investment in Metro Detroit is an excellent way to make money for you and your family, but not all properties you see for sale will be profitable. Learn how to tell if a property will be a good investment in our latest post!
Real estate is one of the best ways to invest your money. It can be an exciting investment, partly because it is tangible, something you can see. More and more people are getting bit by the real estate bug, and some are finding themselves buying the wrong properties. When buying an investment property in Metro Detroit, there are a few things you should watch out for. Keep reading to learn more about things you should look out for when making a real estate investment in Metro Detroit.
#1 – Good Schools
Whether or not you have kids going to school, it’s important to take a look at the school rankings in your area. This is a common stat many real estate researchers will check out to determine the quality of a neighborhood. Schools are partly funded by property taxes, so seeing a good district shows there are many people, with homes of value, paying income taxes. If you are trying to attract a family to buy or rent your home, they will likely want to be somewhere that will have the greatest benefit for their children’s education.
#2 – Job Growth In The Area
The people renting or buying your home will need to have the money to do so. You don’t want to have to worry about your tenants making rent, nor do they want to have to worry about struggling to find employment. There should be consistent job growth in the area, with a low unemployment rate. If available jobs are declining, with no future plan for the area, it might be a property you want to skip.
#3 – Reasonable Renovations
The required renovations for the Metro Detroit investment property you want to buy shouldn’t cost you an arm and a leg. Nor should they take up too much of your time. When a property needs major renovations, there are likely additional problems to be found lying under the surface. This isn’t the situation any investor wants to find themselves in. You don’t want to have to deal with holding costs if you aren’t receiving rent from a tenant. And having a long period of renovations will end up costing you in more ways than one.
#4 – There’s A Market
If you are in the market to purchase a rental property, you’ll need to make sure there is a demand for it. You don’t want to see for rent signs everywhere, houses listed for rent for a long period of time, or any sign that the renal prices are dropping. These things tell you that landlords are having a hard time filling their vacancies and maybe you should plan to invest elsewhere! The same holds true if you are flipping a home. Before you purchase, make sure you have potential buyers to resell to!
#5 – Future Plans
Before you buy, get with the city and find out what’s in the works for your area. New retail stores and restaurants will likely bring more people to the area. Whereas an undesirable project nearby may have an adverse effect on the area. You don’t want to buy a property, only to find out the rest of the street is being re-zoned as commercial, and you now own the home next to a bowling alley or loud concert venue. Of course, this could be a big plus for some people too!.
#6 – High-End Retailers
Take a look at the retail establishments in the area. Places like Starbucks, Whole Foods, and Panera Bread have scouts that look all over, providing them with information on the best places to set up shop. They pay these scouts a lot of money to find the best neighborhoods. Neighborhoods that are up and coming, where they are sure to have a high number of sales each day. These areas are typically more in demand and that isn’t likely to change any time soon.
#7 – There Are Tenants In Place
If the property is going to make money for you from day one, it is definitely a property consider. Take a look at the rental history to help determine if the tenants look like they might stick around for a while. If the numbers add up, and the tenants don’t show any sign of leaving, this can definitely make the property more appealing. Of course, you’ll want to ensure the property is in good condition so you don’t find yourself spending all of your profits on repair costs. You’ll also want to make sure you’ll be able to have a good relationship with the people living there.