How is Bay City, Michigan as a Market?

Question

I’m considering investing in Bay City, Michigan. Are there any experienced investors or residents who know the town well? I’m trying to gather info on what areas to pursue/avoid.

I’ve found tons of info online about Saginaw and Midland, but I can’t find much on Bay City. Can anyone give me a rundown of the town? Thanks!

Dustin Griesing · Answer

Christian, I'm just starting to get active on here to see how this goes. I feel like I'm uniquely qualified to answer this question.

I was born and raised about 15 miles from Bay City and it's a shell of what it used to be due to the loss of manufacturing jobs. The comments regarding declining population are certainly true. With that said, it's been on an upswing in my opinion. Lots of new money going in near the downtown and lots of clean up and new construction on the river front. It's not all doom and gloom.

I've been working as a property manager for some friends who invested in Bay City but live outside of the 50 mile radius the city requires to self manage. The biggest point of advice I'd give is to make sure you have a good handle on what needs to be replaced on any listing. Lots of old buildings and we have been taking over buildings that were run by slumlords, neglecting any proper maintenance.

i also live in Midland and own my own units. You certainly get a different class of tenant, but with a purchase price that doesn't immediately draw a higher monthly rent compared to Bay City. A lot of properties will cash flow in Midland, but you're looking at 2% of purchase price in rents in Midland vs 3% in Bay City.

Midland will be lower hassle, more predictable with a better class of tenant. Bay City will likely provide better cash flow for lower up front costs. Weigh your own pros and cons. People are making money in both cities.

Manuel Prado · Answer

I like to invest for cashflow and Bay City allowed me to get out of my W-2. I have invested there for 5 years and continue to do so. Our key is in the pre-screening process so we can decrease the chances of evicting tenants. The maintenance is a big factor and taking care of repairs as soon as tenants say so is another big one. They usually want to stay and renew because they are treated well. I have heard lot of comments abut slumlords, then do the opposite and most likely tenants will want to stay. It takes us less than 20 days to fill a vacancy and we usually have to pick from 2-3 good candidates. Yes Midland is much stronger and high demand for rents, however we can buy 2-3 deals in Bay for what I could only buy 1 in Midland. I guess it depends on your criteria, I like cashflow, high ROI, and I am ok dealing with lower end tenants. Some investors prefer less ROI, less cashflow and less headaches. Either way works just fine for the right investor. What do you feel most comfortable investing in, what is your criteria? Once you have defined your guidelines then pick the right market where to invest and go for it! Happy investing!

Charles Kao · Answer

@Christian Hall

Numbers are just numbers but if the population is declining now what do you think it will do if the economy turns? Anybody that can is going to Midland. Way better schools

and cost of living is still ultra low. That is where I would get a rental if you are looking up that way. Even during recession the city's top 3 employers were not affected and actually has attracted other companies because of the large amount of international talent that Dow attracts.

Art Perkitny · Answer

@Christian Hall

As most have already stated the population is declining and so are median home values.

Rents have crept up, but remain very low

Tenant profile is regressing as well, with poverty rates going up, more households reporting using SNAPS (supplemental nutrition assistance program) year over year, and a general decrease in number of individual with college degrees in the area.

All things considered, things don't seem to be looking very good for Bay City

Data comes from the American Community Survey

Hope this helps

Art Perkitny · Answer

@Dustin Griesing

Here is a comparison for Bay City and the state of Michigan

Link to Comparison

My above commentary was more looking at the change if you plotted a line of regression rather than individual data points.

In the graph showing percentage of college educated adults, for example, it's clear that the number increases from 2016. However the trend looking at all the data is clearly going down.

Dustin Griesing · Answer

The Quant maps post is interesting and I'd like to see similar data compared to a statewide or regional baseline.

I may be a fool, but I think your data visualizations tell the opposite story of the text which was typed out.

-Rents have increased since 2015

-SNAP/Food Stamps percentage down since 2015

-Percent poverty has decreased since 2015

-Percent college educated has increased since 2015

Is this one of those times you're supposed to keep quiet so other people don't start to find out this might be a good place to invest?

Tanya H. · Answer

I will chime in as well. I am also originally from Bay City. I have most of my extended family and lots of friends there.

I own a rental in Bangor township and I just finally sold a foreclosure flip in the city that took forever to sell. I would caution you to stay out of the city, and instead look into Bangor or Monitor township. The city tries to crack down on out-of-town investors. I can understand that they don't want slumlords, but they are rather indiscriminate about harassing all out-of-town investors. I worked hard to keep my place looking nice, but they nit-picked about my property the whole time that we were working on it, when an owner-occupied across the street was horrible (lawn not mowed, high weeds, not shoveling the sidewalk, etc). I was actually improving the area (by fixing up a house that sat vacant for quite a while), the house turned out so nice (too nice - I over-improved it - but that's a whole other story).

There are some very nice condos along the river, but the prices are shockingly high.

Another issue with Bay City was trying to find honest people to work. Even with all my connections there, it was near impossible.

I don't know if the city will experience a turn-around or not. It seems like it's possible, given the regeneration that is happening along the river.

The number of vacant/abandoned houses continues to be quite high. But the city is very short-sighted and doesn't understand that it needs outside money to come in and infuse the economy with cash, jobs, housing.

So just some thoughts around my experiences. I still want to invest in the area, but it's not as easy as it looks :) .

Shawn Jacobs · Answer

@Christian Hall Bay City can be a really tough market like Charlie and Dustin said. I grew up in Bay City and am flipping a house there now. The city has been losing jobs and people for many years and the city has done little to prevent it from deteriorating. Saying that, in the past few years there has been a lot of new development downtown and programs implemented to help spur new business.

If you do invest there, I would only invest in nicer A & B class areas. There are a lot of lower end houses that have been neglected and are run by slumlords that I would avoid. I would also avoid most commercial properties other than a small handful of large multi-units, due to long vacancies since there are so few jobs and new businesses.

Charles Kao · Answer

@Christian Hall It pains me to say this but I would never invest there. My family owned quite a bit of commercial real estate in Tri cities

and everything in Bay City is selling

for almost what we bought in the 80s and 90s. Population continues to decline with nothing to save it.

Christian Hall · Answer

Thanks so much @Charles Kao @Dustin Griesing and @Shawn Daniel. I really appreciate the advice. It sounds doable, I just need to study/learn the market. Shawn, you mentioned avoiding lower end houses. I assume that can be identified/reflected in the purchase price. Are there any geographic areas to pursue/avoid (like "east/west of the river" or "south of 22nd", etc.). Are those A & B class areas defined at all? Thanks.

How is Bay City, Michigan as a Market?

How is Bay City, Michigan as a Market?

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