Rental Rate Differences
In Detroit, a typical 3 bedroom bungalow in Detroit will bring you about $750 or so, a comparable home in the suburbs would bring you about $900 a month.
I wanted to mention the difference I’ve seen when it comes to evicting tenants. The longer a non-paying tenant stays in your property, the more money you’re losing.
From my experiences, it’s a HUGE difference in the amount of time it takes to evict a tenant.
In the suburbs, we are able to get tenants out in 30 days or less, for the most part.
But in Detroit, it can take up to 3 months or more.
You might have a home on a “nice block” in the city, but that property is probably only a block or two away from a bad area, which means you’re not isolated from the riff-raff by any means.
While theft and things like that do happen in the suburbs, you’re much more likely to be relatively insulated from direct access to hoodlums in the suburbs.
If your property sits in Detroit, you’re nothing but a short walk from a bad neighborhood or block.
There are really exclusive parts of the city that you can tell isolate themselves from the rest of the city somehow, but nine times out of ten you’re not going to be investing in properties like that as an investor.
We all know Detroit’s population has been on a free-fall for a long time now.
That makes it even riskier investing in the city. If you’re going to invest in Detroit, you’d better do your best to buy properties that sit in desirable areas.
Not to mention the impact a falling population has on property values.
Of course, not all suburbs are the same.
The Wayne county suburbs have dropped in population in the last year, and the ones in Macomb and Oakland County have both grown in population as of recent.
A lot of the growth in those suburbs comes from people moving to them from Detroit.
Wholesaling in Detroit vs. Suburbs
If you’re planning on wholesaling, you can’t really go wrong with Detroit or the suburbs.
I prefer the suburbs, because there are usually bigger profits available for you as a wholesaler, because of the higher values.
Next: Taxes, Schools, City Services, and the Challenges of Wholesaling Real Estate in Detroit vs. Suburbs