Detroit property prices increase 2.9 per cent

Friday, May 06, 2011

Detroit property prices increase 2.9 per cent

Strong international demand for homes in Detroit, Michigan, is helping to push up local property prices.

The latest data from the FNC Residential Price Index show that average Detroit property prices have increased by 2.9 per cent year-on-year, thanks partly to a rise in foreign investors, including many Brits, taking advantage of a fragile Detroit property market.

The property market in Detroit, like much of the USA, suffered as a consequence of the recent credit crisis and USA property crash, with prices plummeting across the region. But with high rental returns currently achievable, many investors are adding homes in Detroit to their property portfolios.

UK-based overseas estate agency Property Secrets claim that U.S. government initiatives such as the Housing and Urban Development scheme (HUD) scheme, which provide social homes for residents, are yielding high rental returns for investors buying property in Detroit.

When the automotive industry collapsed in Detroit there were significant redundancies and high levels of home foreclosures, forcing people into rented accommodation. Through HUD scheme initiatives including rent subsidies, grants and general assistance to private agencies or other bodies involved with housing, more and more people are able to stay in their homes.

Alan Forsyth, Director of Property Secrets, comments: "We are offering three and four bedroom, fully refurbished houses to investors from $40,500, [around £27,000] often at least 50 per cent under market value.

"These properties are subscribed to the HUD scheme meaning that owners purchase houses with tenants already in place, they are paid rents directly from the government plus we offer a 12 month rental and maintenance guarantee so offering a safe and secure investment. And with a typical 3 bedroom home achieving rents of over $800 a month, an average investment through us will net yield a minimum of 13 per cent, gross yields over 20 per cent."

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A Place In The Sun