Published October 29, 2020. Updated September 21, 2023.
What's the best way to bulk up your real estate portfolio in Detroit? Smart real estate investors know that a diversified portfolio can lead to better success (and more income)—but how can you make that happen?
The Detroit real estate market is an excellent way to build tremendous cash flow, consistently add new properties, and boost your long-term wealth—and there are plenty of ways to do it in the Motor City! From single-family homes to condos and duplexes, you'll find plenty of variety in the housing market here when you invest in Detroit.
However, you may be wondering: Which type of rental property is best? If you have your eye on success, should you focus on one type of investment over another? Let's look at each type of property and apply our seasoned experience as Detroit property managers to answer this important question!
What's the Difference?
As a one-stop shop for your residential property management needs, we have specific insights into different property types to consider when building your real estate portfolio in Detroit.
However, investors should remember that while many different properties can generate excellent revenue, not every property type is right for your growth!
When considering single-family rental properties vs. a condo or a duplex, they can all make excellent rental properties—but we know from experience that every portfolio is not a 'one-size-fits-all' scenario. Ultimately, knowing which type of rental property will perform well in this real estate market and meet your goals requires understanding the differences between each.
Let's take a look.
A single-family residential property is detached from other buildings. It's intended to house a 'single' family in the unit—different from a multi-family building that can be a long-term home for multiple residents in different units.
Here are a few tidbits about single-family real estate investing and properties:
They make excellent rental homes for families or couples.
They offer quieter spaces than condos or duplexes.
This type of investment opportunity is not attached to other neighbors.
Residents can enjoy a house, yard, and parking without sharing those spaces with others.
However, when compared to condos and duplexes, single-family rentals require more maintenance. Property owners must maintain driveways, exterior structures, and everything inside the home as a single expense.
So, when adding these properties to your portfolio, be sure to budget maintenance expenses into the home price.
Condos are appealing to renters in the area and can be an excellent addition to your portfolio of Detroit investment properties. When single-family homes aren't readily available, and it's time to grow with a new property purchase, investors can often find condos looking for new owners and snap up this investment opportunity!
Here are a few things to know about condominiums as investment properties:
While a condo can be home to a single family, they are units inside larger, multi-family buildings.
Owning a condo rental eliminates yard maintenance for investors and most exterior maintenance responsibilities.
A condo association usually manages common spaces and exterior building upkeep.
Having fewer maintenance tasks is a nice perk of investing in Metro Detroit condos. However, property owners must be aware that they'll need to pay condo association fees and be forced to work with the association when it's time to renovate the unit.
You'll also be responsible for finding residents who follow the condo association rules while living in your rental, which is not something large-scale investors want to waste time doing. That makes working with a Detroit property manager crucial when you decide to invest in this market.
Many investors getting into real estate investing start with a duplex, living in one unit and renting out the other. Additionally, if you simply like the idea of a multi-family rental property on a smaller scale, duplexes are an excellent choice.
These residential buildings offer housing to two families or residents—one in each connected unit.
A few other facts about duplexes include:
In most cases, duplex units share one common wall.
You'll find duplexes lining residential streets, whereas condos are often found in Metro Detroit high-rise buildings (similar to apartments).
While not as quiet or secluded as a single-family home, residents can often enjoy quieter living in a duplex than when renting a condo.
Duplex maintenance relies on property owners or property managers — different from a condo association. You'll be responsible for interior and exterior maintenance for one or both units if you own them both.
Much like condos, if the market isn't ideal for investing in single-family rental homes, duplexes offer another option to build an extensive real estate portfolio in the Motor City.
No Matter the Property, Choose Residential Property Management
It's hard to say which type of property is 'better' for your long-term wealth in the Detroit housing market until an expert eye can analyze your current holdings. However, when you continue adding the right properties to your investing strategy, you end up with a diversified portfolio and serious cash-on-cash returns.
It's important to remember that no properties will generate income for investors on their own. The buildings themselves do not become profitable without effective management. So, no matter how you choose to invest in Detroit, don't forget about investing in residential property management!
The mix of properties in your portfolio won't live up to their full potential without the care of seasoned property managers in Detroit. A skilled expert with a focus on sustainable growth shifts effortlessly between the management of condos, duplexes, and single-family properties. They are a complete portfolio solution!
At Own It Detroit, we have processes in place to work with condo associations and handle property maintenance for duplexes and single-family residences. Our team also knows how to screen for high-quality residents and what local renters want when looking for their next stand-alone home, condo, or duplex.
We can also deliver turnkey single-family property solutions to investors, no matter which property type works best to build the wealth you need to reach your goals.
The 'Best' Detroit Investment Properties Work Best for Your Portfolio!
Whether you're just getting started or an institutional investor looking for the best way to invest in Detroit, your portfolio will likely contain a mix of high-performing condos, duplexes, and single-family homes. As seasoned Detroit property managers, we always recommend adding new properties to your portfolio after a heavy dash of research.
With our best-in-class service, we help investors find the right fit when they tell us it's time to grow! No matter what type of property you choose, Own It Detroit can manage renters, rentals, and associations to grow your long-term wealth.
Contact us to talk with our Detroit real estate experts and see how we can help!