There are many causalities of the financial crisis of 2008 when millions of Americans lost their homes amid record numbers of personal bankruptcies and mortgage defaults. Nowhere was the depth of the housing crisis felt more deeply than Detroit where thousands of houses got caught up in the city’s dramatic decline. Between 2005 and 2015 over 1 in 3 properties in that city were foreclosed on because of mortgage defaults or unpaid taxes, according to city figures.
As the prices were falling with the city’s housing burst, Detroit provides an excellent investment opportunity to buy real estate at bargain prices. The city is reblooming and now is a favorable time to purchase.
The city has earned a top position as an investment hub because of the greater returns investors can gain from the real estate market. Detroit is reemerging as a substantial economic strength. The investment outlook remains great and signs of a stronger Detroit continue to surface. Comparatively high rates of return on real estate investment
Auto Industry giants GM, Chrysler, Ford are maintaining their manufactures in Detroit. The resurgence of the auto industry creates more than 400,000 jobs.
Comparatively high rates of return on real estate investment in greater downtown and metro Detroit as a whole continue to drive foreign investors to the region that are looking for low-cost investments with the stability of the American Dollar.
Investors have spent over $1 billion in renovation of tourists attractions like its Greektown Casino, restaurants and downtown hotels. The vision is to create a more attractive city with the facilities for hosting business conferences and family vacations.
Google is moving its virtual car operations and R&D center to Detroit in association with Ford motors. Google along with many tech startups are setting roots in Detroit.
Celebrity investors and investment groups such as Magic Johnson, Dan Gilbert, Fernando Palazuelo and DDI Group count in the influx of international and national funds into Detroit.
Major Markets like Miami, New York City and Los Angeles can be expect to capitalize at a rate of 4.5 to 6 percent. Detroit capitalization rates are between 6.75 and 7.75 percent with the best investment-grade properties in prime locations having rates of 7 to 8.5 percent.