Investing In Detroit

by Dual Income No Kids on December 23, 2009 · 1 comment

I don’t know what to think about Detroit. The collapse of such a large city is pretty much unprecedented in U.S. history. It’s not uncommon for smaller cities to fall and become ghost towns – they’re scattered all over my home state – but this is a completely different scenario of course. I know that there was a push a bit ago to bring more technology companies to Detroit in an effort to revitalize the area, but I don’t think that worked.

I think people often discount the factor that weather plays in trying to get people to move to Detroit. I mean, it’s really cold there; why would a young person move there when there are many other options, especially if they have an advanced degree? It seems like a small, insignificant point but I think it’s actually a pretty big deal.

Having said that, there are a lot of reason to be positive. First of all, it is a big city. It’s close to Chicago and Indianapolis, two cities that are doing pretty well. Land is cheap, and eventually, businesses are going to realize that and will slowly move in.

The real wildcard in my opinion is the government. How are they going to right the ship? They have to address the rising crime rate, the failing schools, widespread government corruption, the brain drain, and the stagnant business situation. But again, there are a lot of top quality universities full of talented students nearby (Michigan, Michigan State, Illinois, Purdue, etc…) and you have to think with the right incentives, the local government can encourage businesses to invest in Detroit again.

I think there are many reasons to be positive, and ultimately, I think Detroit will turn it around. But I also think that we’re talking about a decade or two; not just a couple of years.
I’ve been putting a lot of thought into buying property in Detroit because it’s so cheap and I think it’ll eventually turn around. But I’m going to take my time (which I think I have plenty of). I’ll definitely be researching it though.

By the way, when I say cheap, I mean REALLY cheap! We’re talking $1,000 for a three bedroom house. You could buy 400 houses for equivalent of a one or two bedroom here in DC! You’d need a whole lot more for repairs and management costs, but with prices like that it is crazy.

Readers: Are you guys thinking about investing?

Michael

P.S. Check out another post by Writer’s Coin called, Detroit and the Recession: An Inside Look

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{ 1 comment… read it below or add one }

1 Writer's Coin May 3, 2010 at 6:45 am

Thanks for the link! Detroit’s case is a very interesting/sad one. It could be the turnaround story of the century but very few people seem to think that’s possible. Like you said, the government is the wild card. I know I’m an optimist to a fault, but I think it can happen.

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