One City’s Bankruptcy is Another Country’s Gain
For years we’ve known that when Canadians are looking to escape to a place in the sun, and they want to buy property in that sunny land while at it, they often head to Arizona. No one quite knows what the draw was. Maybe the rocky yet golden landscapes, the impeccable climate, or the many things there are to do there for nature lovers such as us Canucks. Whatever the reason, we flocked to Arizona in the droves. Just lately though, Arizona hasn’t been the number one destination for Canadians looking to invest in the States, giving way to places such as Palm Springs – or Detroit?
It’s true. With Detroit recently declaring bankruptcy, Canadians have been quick to scoop up Detroit properties due to their incredibly low current values; and the opportunity to be there when those values climb back up again. Properties as low as $1,000 USD are on the market, and even fine three-bedroom homes are being priced within reasonable ranges, usually about $37,000.
“We have received numerous calls from Canadian buyers in the last number of days who are not just interested, but are ready to buy now,” says Chris Shaw from International Investments in Detroit. “There is a reason so many investors are focused on the Detroit market. They see the long-term potential that exists here and the returns they will make.”
However, Shaw also says that Canadians – or any other investors – shouldn’t only look at the price tag of a certain property. While you can certainly find homes that are being sold for $1,000, buyers must look at the potential value and how high that property will climb back up once it’s back on the ladder. He says that many of those nearly-free properties are in areas and neighbourhoods that will never see an increase in value. And if they do, it will be in only the slightest measure.
“Investors should be looking at properties starting at $37,000 and you can get a good three-bed house for that amount,” he says.
That’s not a bad price, especially when you consider that you’ll most likely pay three times that much for just about any property nearly anywhere in Canada. Shaw also states that properties going for around $30,000 – $50,000 usually garner rents worth $750-$1000 a month.
Shaw’s advice for those looking to get into the Detroit market is to do it now, before the city climbs out of their bankruptcy hole and property values start inching higher again. He also says that looking in the areas of English Village, University District, and Rosedale Park are the best bets for the biggest returns.