Ready to learn how you can make money in Detroit real estate? In this post, we’ll explore six proven ways to use real estate to increase your financial standing!
Owning real estate is one of the best ways to build wealth. There are a number of ways to use it to make money. Some are obvious, while others are a bit more out o the box. Keep reading to learn more about some of our favorite ways to make money in Detroit real estate!
Buy and Flip
While flipping houses may have seen it’s heyday a few years back, there are people all of the country who are still doing this and making a fortune. When flipping first became all the rage, it seemed like everyone was getting into it. You could buy any run-down house, fix it up and sell it for a profit. These types of deals are a bit trickier to find these days, but they are definitely out there. It’s vital that when you decide to buy a house in Detroit to flip, that you know what you are getting into. Not only will you need an estimate of the repair costs, but you will need to make sure you will be able to find a buyer for the price you need in order to see a profit. You don’t want to spend time and money on a house, only to break even. Run the numbers taking into account all expenses; then you’ll want to pad your budget for the unexpected!
Buy and Hold
As an investor of Detroit real estate, it’s always good to have a few properties in your portfolio that you are holding onto. Look for properties that are likely to appreciate in up and coming areas. Just make sure you will be able to find a high-quality tenant who will pay you what you need each month to make the investment worth it. Holding investments and cashing in on their appreciation over time is a great way to create a steady income, with a large reward when you decide to finally sell the property.
Buy and Divide
You can choose to buy a larger tract of land and subdivide it, selling each lot for an amount much higher than your original purchase price. It’s important to make sure this is feasible before you jump in and make the purchase! Know the zoning laws and local ordinances. Also, it’s important to ensure there will be a demand for the lots. Just because you can score a great deal doesn’t mean that people are going to want to buy the individual lots. Ensure there is an interest in building so that you will be able to make your money back more quickly.
Buy and Develop
Another option would be to purchase land and develop it yourself. Depending on the size and the zoning, you could build one building, or divide it up for multiple structures. Consider the options so you can use the property to it’s highest and best use! Doing something like this is typically best reserved for someone with a background in real estate or construction. You will want to have a clear understanding of the process and everything that goes into it.
Traditional investment buyers don’t always consider commercial investments; however, they should be! As long as you have a clear understanding of the numbers which can take a bit more analysis than a traditional single-family home. You’ll want to look at the vacancy rate, net operating income, cap rate, and gross rent multiplier for the property. You’ll also want to ensure you are leasing the space to qualified tenants who you believe will be in business for a long time in your location. If your place is off the beaten path, you may not want to lease to a business that requires a lot of foot traffic. You don’t want to have a fly by night business in there, causing your vacancy rate to escalate.
Buy Mobile Homes
Buying and selling mobile homes can be a great way to get your feet wet in real estate investment. Units can usually be acquired at a relatively low cost and repairs made will often cost you much less. There are things to know about mobile homes such as specialized repairs, lot rent, and the demand in the area. With the rise of small living spaces, and the increased affordability due to lower rent and utility costs. In some cases, you are able to buy the land where the mobile home sits, but this all depends on where you choose to invest.
Are you looking for great real estate investment opportunities in Detroit? We Buy Houses in Detroit can help you find the highest-quality investment properties so you can make money in Detroit real estate no matter your budget.