Home values in Detroit neighbourhoods have really started to pick up momentum in 2016 after years of rock-bottom prices.
Still among the cheapest places in the nation to buy a house, Detroit neighbourhoods are seeing prices move up on most residential blocks with substantial gains in the strongest areas, meaning that investors that have already purchased are seeing good capital growth which is attracting new investors from all over the Globe.
Local real estate brokers and experts say the prices in neighbourhoods are rising because investors with cash are purchasing more houses and some are investing in refurbishments which makes the streets and areas more attractive to other investors.
This coupled with huge investment taking place all over the city is starting to change the face of Detroit and what the future will look like.
A $60 million, nine-story apartment, retail, hotel and conference centre is planned to be erected soon in the heart of Midtown. At the end of 2015 GM announced they were investing $245 million into the Metro Detroit plant.
Dan Gilbert, founder of Quicken Loans, has invested more than $1 billion in the last few years, including renovations to Greektown Casino and its highway access ramp. Mike Ilitch, owner of Little Caesars Pizza, the Red Wings and Tigers, is behind the $450-million investment in a new arena and another $200 million to develop the arena district.
Chinese development firm DDI Group bought three downtown buildings, including the original Detroit Free Press building, for $16.4 million and is actively scouting further investment in the city. Chrysler added offices downtown, and Fifth Third Bank Eastern Michigan announced it is moving its regional headquarters and 150 full-time employees to downtown Detroit.The ongoing development of the $140 million M1 rail project which is nearly finished and stretches from downtown Detroit to Grand Boulevard in New Centre.
The city has been adding things most communities take for granted, such as major grocery stores to support the influx of residents. Whole Foods, an upmarket organic chain, became the first major grocery store to open in Detroit last year, and Meijer opened a store and is building a second one to open next year.
This is just a snippet of the investment that has been taking place in Detroit over the last few years and this has now pushed those investors sitting on the fence to take a plunge.
Due to this increased demand Global Investments have increased their supplier network to include the top listed brokers in Detroit, signed new contracts with large Asset Management companies and are working in conjunction with some new banks and other financial institutions
CEO Mike Moodie of the leading USA buy to let company Global Investments was quoted in saying “ This year we are really pulling out all of the stops to deal with increased demand for Detroit. We have signed up even more brokers for 2016 to add to our incredible list of exclusive suppliers. This is giving us and our investors the best valued rehabbed and tenanted properties in the Detroit marketplace by a long way. The key to our success is not only our properties but the management teams and structure that we have on the ground which is in our opinion essential when investing in Detroit. The management company is as important as the property that you buy. “
Global Investments are now approaching 3,500 sales in the US, we asked Mike why he thinks the numbers have been so high in comparison to other companies selling the same properties. “ Its all about the price point and the net return we give to our investors. Our model works on a volume of sales. Most of our competitors will hike up the prices of there properties and sometimes have as much as $20,000 in profit or commission in a sale and they are happy to sell only a few per month. We take our investors direct to the source in the US cutting out these huge profits and commissions made by other companies giving us the opportunity to offer the best prices and best returns to our investors. Our investors are purchasing investment properties through us at the REAL market value and not way above.
But it is not only about the volume of demand, Global Investments have seen a dramatic change in what investors want, initially Detroit was all about cheap properties and low capital input. But now investors want properties of higher value, they have more confidence to invest on a larger scale, the average sales price has increased to between $35,000-$45,000
Detroit has a very bright future and Global feels like we were part of the story, we have pushed Detroit over the last few years as we have always felt it was a great investment opportunity and one with great long term prospects for our clients. Many companies have tried to imitate us and copy everything we do but none of them can beat us on price, product or level of service.
“ We will not be beaten on price or returns”
