Hello all... My brother will be transferring to the university of Michigan to obtain his masters degree and it gave me an idea.... I have been looking into getting into real estate and its a hard jump to make considering that I live in California.. Michigan has prices that seem more reasonable however, even Ann Arbor seems a bit pricey but the condos in the area are a bit more affordable... Does anyone here have rental condos in Ann arbor? how has been your experience so far? I know its a college town and I have seen some houses and condos outside the area that seem interesting too.. Just trying to get an inside scoop at the moment for now....
I have a condo in AA, on the west side of town about 2-3 miles from campus. It is on a bus line so it is easy to get to campus from there. (UM Students ride the bus for free with their student ID.) It is a 1Br 1 bath (750 sq ft) and I believe it would rent for about $850-$950 a month based on my research.
Houses and condos in Ypsilanti are going to be cheaper, but they are further and a longer bus ride to school. Some kids live in apartments in that area. In AA, they are pretty strict about enforcing rental rules. (The city web site has a lot of the requirements for registration, inspection, etc.) You also have to contend with the condo association, which doesn't take kindly to rampant partying.
That all being said, for the $260 or so I pay every month for association fees (includes water, sewer, garbage, landscaping, snow removal), about $250 a year for insurance, and about $1400 a year in taxes, my daughter has her own place. She could easily share the large bedroom with a roommate, and she has had people stay with her on occasion. It is MUCH cheaper than renting closer to campus in a house or apartment or paying for dorms. In addition, it has appreciated over the last few years, so I should make a profit when selling. The condo should sell in the $75K-$85K range, so around $100-$110 / sq ft. You could rent it out. The taxes would be higher (there's an additional $18 per $1000 taxable value / $2000 market value) on non-owner occupied.
These are lower priced condos. Condos in AA go up to $200K-$300K and more, in the area of $300/sq ft. I am not planning on renting the condo after she moves out (planned for next spring) as I do not want to deal with the AA bureaucracy surrounding rentals, much less deal with student rentals, although the area where our condo is located is not really student housing.
Do you have any other specific areas of concern?
If I were you and knowing the market as I do ..I would invest in the neighboring city YPSILANTI. You will have a better overall ROI in that market. I have investments in both AA and Ypsi you would def want to be seasoned investor before touching the Ann arbor market. Run your numbers but from my experience it doesn't make since to invest at the current market value for homes in AA. Do you plan on buying rental or Flipping? Also there is really low inventory in AA so trying to find a deal in AA is another obstacle you will have to deal with. I am sure some people can make it work but for your FIRST deal I would def suggest you finding a really solid investment and that will be tough in AA.
Tony- I'm a full time investor in Ann Arbor. Low cap rates, but University of Michigan great for long time appreciation. I've opened up to short term rentals in last year and am running very well. Graduation weekend $3,300, football weekends $2,000-$4,000/weekend. Medical facility and university/professional events fill in the gaps. I've got a great agent let me know if you want me to connect you.
@Simon Ruiz Ann Arbor has always been a solid market which gives you a lot of options as @Joe Semifero and @David Greiner mention. I would for sure however, keep doing what you're doing right now, keep inquiring from different sources but eventually you'll need someone on the ground that can at least point you in the right direction. Short term rentals, can work very well in Ann Arbor but, they also have a lot of moving pieces compared to the average buy and hold but, something to absolutely consider nonetheless.
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