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Real estate is an essential part of an investor’s portfolio, whether you’re from Michigan, Illinois, Florida, or any other state or country. While many people are wary because of the downturn in 2008, studies have shown the return on investment (ROI) for real estate investments has steadily grown and is once again considered a gainful venture. The real estate industry in Southeast Michigan is particularly dynamic, with many properties being basically free (yes, free).
Detroit’s recent bankruptcy, along with residual recession effects, have made many people turn to renting property instead of buying homes. With federal aid, including $300 million in the fall of 2013, Detroit is finally tapping into money previously red-taped, including a project that will allow the city to demolish blighted homes and clear the way for new prospects. Savvy investors know this equals opportunity and opportunists are flocking to the area, including hedge funders who see the potential of investing in Detroit real estate now.
Investing in real estate in Michigan means a steady stream of profit from rented properties. When investors buy properties with the goal to rent them out, it creates a ripple of momentum in the local economy. The properties, to be profitable, must be renovated and the hiring of professionals for the renovation stimulates the economy—from project managers to appraisers to real estate professionals (each of which has their own employed teams). The investment in Michigan property is a full-circle stimulus. Investors play a large part in the beautification of neighborhoods, which leads to an increase in value of the neighborhood as a whole.
Marketing trends point toward an increase in housing prices, so the optimum investing time is now, while prices are still low and value is certain to increase over time. Though house prices have increased more than 40% in the past year according to RealComp, Metro Detroit properties are still less than 25% compared to the 2005-2006 peaks. The benefit of the 40% growth is the indication of an influx of renters, which equates more demand for properties. Investors are advised to act on buying properties and make the most of this rising trend while prices are still low in Southeast Michigan.
Numerous properties in Wayne, Oakland, and Macomb are economical, with Saginaw and Detroit placing in the top 20 rental markets of 2013. Buying properties and rehabilitating them as rental homes is a beneficial and lucrative addition to a diverse portfolio.
Additional benefits of investing in a property includes tax write-offs, which could allow investors a tax-free cash flow, potential tax deductions, and the ability to put money into a retirement fund. With just a bit of research, potential investors will see firsthand the statistics and news of the current real estate industry and the realization of value to be gained from acting on it. After all, Royal Oak just got ranked as one of the top ten cities for kids.
Michigan Articles and Links
Biggest companies in Detroit and the suburbs: http://goo.gl/fcq9XS
New companies in Detroit: Downtown Businesses
View this informative video of how Detroit houses are being snapped up!
For additional information, read about the rising demand for multifamily housing.
Chicago has one of the highest concentration of population in the country, housing about 2 million people. While house prices are decent, rent prices are fairly high, and combined with a high demand for rental housing, this creates an ideal environment for investors. Investors are turning their eyes to Chicago because of its appreciation potential and its worldwide appeal. Chicago also holds more renters than buyers and with prices set to increase in the coming years, investors are snapping up properties now.
“Although the annual sales rates have declined, the month to month changes continue to be strongly positive,” said Geoffrey J.D. Hewings, Director of the Regional Economics Applications Laboratory of the University of Illinois. “In addition, positive housing price gains, continuing declines in the foreclosure inventory levels and the increasing share of sales of homes priced above $200,000 suggest a housing market that is responding positively to signals from the economy.”
Zillow calculated the median house price in Illinois at $148,000, or a 5.9% increase, in the past year. The median rent price was calculated at $1,475 per month.
In addition to increasing house prices, Illinois is drawing in major business. Big corporate companies are making their way into the state, including Catamaran, Century Aluminum, Couer d’Alene Mines Corp., CPG International, CVS Caremark, Durata Therapeutics, FERPAL Construction, Home Depot, Mike’s Hard Lemonade, Rittal Corporation, and Univar.
Florida is one of the top investing markets in the country. With hundreds of thousands of northern Americans flocking to the sunshine state during winter months, and seeking retirement homes, investors can reap big rewards for investing in this state. The baby boomer generation is coming of age to retire, and as a state with no income tax, Florida offers a retirees a lower cost of living than most other states in the country. Florida was hit hard during the recession, resulting in it having a high rate of foreclosures. Many of those living in Florida seek rentals due to budget or because of the fear of not meeting mortgage payments once again. With such a vast pool of renters, investors would do well to take advantage of this market.
Nearly 2/3 of Florida house sales were cash, because of heavy investments in the state. Referred to as “mom-and-pop” investors, more individuals and small teams are investing in real estate than large investment firms, and foreign investors are not far behind.
Sales and house prices are rising in Florida as much as 8% from the previous year.
The U.S. economy is making a strong comeback, which includes Florida. The window of opportunity to invest is limited. Those who are interested in long term appreciation should investigate properties in Florida. As a popular state because of its warmth, it’s a great investment opportunity.
John Graham founded his company because of his persistence and passion for Real Estate. He was able to generate business because of his customer centric values. His main focus has always been the client and finding new opportunities in the field of Real Estate. John Graham Inc., is a company that offers traditional real estate, Property Management, as well as investment opportunities to its customers. The focus is to bring innovation, growth, and customer satisfaction to the industry. The team at John Graham Inc., is equipped with ideas and expertise to help build relationships and make the real estate experience truly unique.
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