Detroit offers a lucrative real estate market to investors today. It has scores of beautiful and historic homes that, after renovating and updating, can appeal to buyers and renters on the lookout for sturdy and comfortable houses in which to live.
When you have your eyes on houses in Detroit to buy, you may wonder what it will cost you to fix them up and bring them up to code. You can plan accordingly and protect your investments by estimating your home renovation costs and consulting with an experienced real estate investment company like Upside Investments.
Home Characteristics in Detroit
Detroit is currently home to around 233,000 houses. Out of all of them, around 194,000 are in good condition.
In fact, a large majority of the houses in Detroit that are still standing were built in the 20th century. Close to 40 percent of them were built prior to the Great Depression.
World War II brought a significant slowdown in the building of new homes in Detroit. After the war, new home construction ramped back up as soldiers came home from the warfront and looked for places in which to settle with their families. Ninety five percent of the homes still standing in Detroit today were built by 1956.
Still, the ravages of age and neglect have taken a toll on many of the houses available for investors to buy today. To bring them up to code, let alone make them appealing for buyers and renters, you may have to renovate them extensively.
Even so, renovating your properties in Detroit can be a worthy investment of your time and money, particularly if you aim to earn an income from them right away. By getting renovation estimates and knowing what costs come into play, you can protect your bottom line and make your properties welcoming to people looking to rent or buy them from you.
The Appeal of Brick Exteriors
As an investor in the Detroit real estate market, you may also find homes with brick exteriors to be well worth your time. Brick is highly durable. Homes made with this material are more resilient to damages and aging than other types of home exteriors.
Records show a majority of the homes in Detroit have brick exteriors. In fact, around 95 percent of the homes built in and around the Great Depression are made out of brick. Even more, these houses are between seven and 20 percent more likely to achieve a good condition rating from the local mapping parcel survey.
In total, there are just over 131,000 brick sided homes in Detroit. Out of that number, a little more than 118,000 of them are listed in good condition, which can translate into lower renovation costs for investors who buy them.
Another 10,000 brick sided homes in Detroit are listed in fair condition and may need more in-depth renovation than those homes that are in good condition. Around 2200 brick sided homes are in poor condition and may require the most extensive renovation after investors buy them. Close to 790 brick sided homes in Detroit are suggested for demolition.
Other types of siding found on the exteriors of houses in Detroit include asphalt, which builders used as a cheaper alternative to brick, and wood siding. Wood siding poses the potential of having asbestos in it. Getting rid of asbestos and bringing houses with wood siding back up to safety codes can pose a financial challenge to many investors.
Vinyl siding has also gained popularity since the turn of the 21st century. Still, compared to brick siding, vinyl does not hold up as well. Houses that have vinyl siding on them may suffer damages that cost investors more money to repair and take away from investors’ bottom lines.
Regardless of what kinds of siding the homes in Detroit that you buy, you may consider looking at the national averages for renovation costs when debating how much you might pay to bring your houses up to code. National averages often do not take into account factors like:
- Local hourly labor rates
- Material costs
- Local permits
- Sales tax
Still, studies show that the average cost for renovating a house in 2024 stood between $10,384 and $83,076.
What Renovation Costs Estimates Do Not Include
As an investor in the Detroit real estate market, it is vital that you understand what contractors may not include in your renovation costs estimates. You should take into account that some critical costs will exist outside of any estimates that you get and plan accordingly to cover them.
For example, your estimates typically will not include any permits that you need for your renovation projects. Depending on what projects you plan on giving the green light to, you may need to obtain a permit from the city or county. When contractors give you estimates for the work, you may assume the costs of permits are not included in these numbers.
Further, the city may require you to have the properties inspected before and after you renovate your homes. You can expect to pay for inspector fees separate from the other costs of renovating the houses. Your estimates typically will not include the costs for having your properties inspected before or after the work finishes.
Likewise, your estimates often will not include the costs of county, city or state sales taxes. It is vital that you know what these tax rates are and then figure them into the estimates that your contractors provide to you.
Finally, contractor fees can add to the estimates that you get for renovating the houses you buy in Detroit. Depending on the contractor, these fees can range between $5000 and $7000, if not more.
Investing in and renovating properties like brick sided homes in Detroit can be challenging for even the most experienced of investors. Upside Investments has the expertise to lend a much-needed helping hand. Learn more about renovation costs and investing in the Detroit housing market by contacting Upside Investments today.
