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http://nyti.ms/XaWWwB
Susan Stellin published an interesting story this morning
about the successful rental of Midtown and Downtown apartments along with pictures of the Auburn and Broderick buildings. Increasing employment downtown and in Midtown is apparently generating a healthy demand for apartments.
I was just informed that my rent payment [[downtown) is going-up big time in March!
It's been my understanding the vacancy has been very low for a while now.
Low vacancy = higher rents
Higher rents = new construction
[[Law of Supply and Demand)
That is true. A low vacancy indicates a higher than average demand. This can be a good indicator to investors that buying rental properties [[single family residences or multi-family apartments) is a good idea. Another avenue is to convert buildings into a multi-family building. With the low cost of real estate and the high rent demands, it can be a win-win for investors.Quote:
Originally Posted by Hermod
I'm worried about what will happen to my rent when I want to renew, but it's definitely a good thing
With more hip cool yuppified skinny jeaned young professionals moving Downtown Detroit or Midtown areas to occupy those fortified lofts and condos. There will be rising rents and other maintenance fees coming soon. Hope you all working for your salaries right about now.
Quote:
Originally Posted by renf
How about cutting and pasting the article here since I can't pull it up by clicking the link? I'm not keen on entering my information to be bombarded with more spam.
The really good thing is that it will probably encourage people who want to live there but want to spend less money on rent to check out some of the adjoining areas that could use some more people. Who knows, maybe we'll start getting some Brush Park development.
Naturally one would think so, but look a little deeper at the numbers. Even with the low cost of Detroit real estate, investing in rental properties in Detroit is not very profitable, due to high property taxes and insurance rates.Quote:
Originally Posted by campbellsimon
I believe they need to invest in family-style housing in Midtown and Brush Park neighborhood. I'm all for mid-rise building with ground floor retail and the density that comes with it. But once you get into the neighborhood and off the main street, there should be more homes with lawns and garages throughout the neighborhood. Due to increasing family presence I'm noticing in the Midtown now, this can make this area more family-friendly, rather just college crowds and a few professionals. There's plenty of land on the west side of Midtown for more housing and definitely Brush Park neighborhood.
you need to build up density if you want money and development to work its way into the neighborhoods. people can buy homes with yards in the suburbs, what this area doesnt have though is a lot of "urban" options for living. focus on what detroit can offer that no suburb can imo.
Frankly, that would be a mistake. Families are not a reasonable target market for Brush Park development, and Brush Park is an obvious location for multifamily housing, being one of the few parts of the city where you wouldn't have to be totally car dependent.
i googled the writer's name and came up with the full link:Quote:
Originally Posted by davewindsor
http://www.nytimes.com/2012/12/12/re...tals.html?_r=0
Thanks for the link.Quote:
Originally Posted by downtownguy
I wanted to read the link to see where the author got her data from and it's from the developers themselves [[which I expected), not some unbiased source like a government agency: "Developers say occupancy rates in these areas are at least 96 percent."
They are still saying in the article early 2014 for completion of the Whitney. Better get a move on.
Don't know about that. Investing in rental properties in Detroit is very profitable, depending on where you're at. There are places in the rougher areas of the city where 12 months gross rent would cover 1/3 of the asking price.Quote:
Originally Posted by Zozo
That said, I'm open to your argument. When you say "look a little deeper" at the numbers....which numbers are you looking at?
Good luck collecting that rent.Quote:
Originally Posted by corktownyuppie
Most condos and lofts in the desirable areas of the city have an SEV in-between $35-45K. That's $3K a year in summer/winter taxes, and about $900 for insurance. HOA fees are about $175. That doesn't leave much after tax, insurance, HOA and maintenance fees.Quote:
Originally Posted by corktownyuppie
Dwayne and LeRoy cradling their AKs makes effective collection back up [[and security once you get the money in hand)Quote:
Originally Posted by JVB
$130,000 LoftQuote:
Originally Posted by Zozo
20% Down
-500 Mortgage
-250 Taxes
-75 Insurance
-175 HOA
=========
Monthly expenses 996.51
Monthly rent $1400 [[1700 sq ft condo nearby just rented to two people for $1400).
Net monthly profit $400
Annual profit $4800
Profit / Down Payment = $4,800/$26,000 = 18%
Looks good to me.
Your profits are even smaller because you are financing. But I understand your model, it produces a little extra income, and I hope it works for you.Quote:
Originally Posted by corktownyuppie
But one item you did not factor into your equation is maintenance, which at a minimum should be $50 a month. That leaves $ 350. Also, your model assumes that the condo/loft comes with appliances, which is usually not the case with the condos and lofts that are on the market now in Detroit. If you have a note on the appliances, that $350 profit decreases even more.
Essentially the landlord is left with a $275-$350 a month ROI on a $180K+ investment [[since you are financing). That's not that great. And that's why there's not a flood of investors stampeding into the Detroit condo/loft market.
Long term it seems even more risky when you consider the fact that the condo/loft owner may never get close to $180K+ if they were to sell.