Deep Dive into Metro Detroit Cities: Inkster
If you’re looking for a solid investment in the American Midwest, look no further than Metro Detroit, Michigan. With its low cost of living and its proximity to major cities like Chicago and Toronto, Metro Detroit is a great place to invest in rental properties.
However, the tri-county area of Macomb, Oakland, and Wayne is also incredibly diverse. So much so that even seasoned investors need expert guidance and insider knowledge to reap the famed rewards.
In this article, we’ll take you through the ins and outs of investing in Metro Detroit, with a particular focus on the City of Inkster. By the time you finish reading, you’ll know everything you need to know about this up-and-coming investment hotspot.Source: Google Maps
Inkster, Michigan is a prime example of a city in Metro Detroit that is ripe for investment. Situated just west of Detroit, Inkster is a city of around 25,369 people in 6.25 square miles (16.19 km2), resulting in a population density of 4,172.08 per square mile (1,610.91/km2).
The city does not share a border with the City of Detroit, so it's not considered a Ring City in our books--cities that circle Motor City with high rental demand and affordable properties. Still, you won’t find many of the typical investment risks associated with the Detroit market in Center Line.
Here’s a map for you to visualize where Inkster is in Metro Detroit:Source: Georgetown Public Policy Review
If you’re interested in other areas aside from Inkster, we’ve listed all Metro Detroit cities below. Anything highlighted in green is Ring Cities—best spots for rental property investments in our opinion—while the ones with hyperlinks will bring you to previously published Deep Dives:
Inkster in a Nutshell
Inkster was first settled by non-indigenous people in the early 1800s, incorporated as a village in 1926, and incorporated as a city just over two decades later. The city's name comes from Robert Inkster, who is a native of the Shetland Islands, and from a Norse name “Ingasetter,” which is someone’s name plus the term for summer pasture.
The city's population has declined since its peak in the 1970s, but it has stabilized in recent years. The economy is now diversified, with healthcare, manufacturing, and retail being the largest sectors. Due to its growth, Inkster today is known as a "bedroom community" where its workforce has many housing options to choose from and many hotspots for rental investors to earn.
Today, Inkster is considered a "safe haven" in Metro Detroit. The city has its own police and fire departments, as well as its own schools. Moreover, Inkster has more than a handful of beautiful parks, recreation facilities, and quality schools like William D. Ford Career-Technical Center with programs for automotive technology and culinary arts.
The city is also roughly 10 miles from Downtown Detroit, so it only takes 20 minutes to drive between the two locations. Residents here will find convenience in the many shopping and dining options available in neighboring communities.
These factors make Inkster an attractive place to live, and it's no wonder the city's population has been growing in recent years. But is it a good place for rental property investors like you to purchase homes? Let's take a look.
Rent & Rent-To-Price Ratio (The 1% Rule)
Niche reports that the median rent in Inkster is $915 across all property types. Breaking this figure down into different bedroom sizes, Bestplaces shows that Inkster’s average rent is slightly lower than the greater area of Metro Detroit, Michigan, and the nation:Source: Bestplaces
Yes, Inkster seems to have lower median rent than nearby places. You might have a lower rent income stream here compared to investing in other Metro Detroit cities, but it’s still too early to say. We’ll have to take a closer look at the average property prices later on to conclude.
Let’s pull up some current Zillow listings to see if Niche and Bestplaces’ reports are accurate:Source: Current listings on Zillow as of March 2022
The overwhelming majority of Inkster properties are three-bedroom homes, where the average rent seems to be higher than Niche’s average, and roughly the same as Bestplaces’ report. This is probably because Niche uses historical data, while Zillow listings take current market shifts into account already.
So, let’s use the rent-to-price ratio to check the potential cash flow of Inkster properties. The industry standard is to ensure that the monthly rent is at least 1% of the property’s total purchase and repair price to ensure positive cash flow for you.
We’ll use the following sold listing on Zillow as an example:Source: Listing on Zillow
With a purchase price of $145,000 and Zillow’s rent estimate of $1,470, the rent-to-price ratio results in a favorable 1.0%. This figure perfectly fits the industry’s standard, letting you earn positive monthly cash flow. You can be confident that the price you’ll pay is well worth the investment gains.
House Value and Appreciation
According To Niche, the median home value in Inkster is $51,500. This seems to be significantly understated, however, as Zillow’s data shows Inkster properties to be worth $89,917 instead. Zillow’s data is seasonally adjusted and only includes the middle-priced Inkster properties, but you can undoubtedly see that the values have increased by 28.3% over the last 12 months:Source: Zillow
Moreover, Redfin showed that the median sales price in Inkster is an impressive $95,078, and has been increasing by a whopping 34.7% year-over-year.
While the number of homes sold hasn’t increased and the median days on the market have extended over the years, Redfin still deems Inkster as a “Very Competitive” market, where many homes receive multiple offers with waived contingencies.Source: Redfin
NeighborhoodScout gives us helpful data as well, reporting that the overwhelming majority of homes in Inkster are single-family residences (71.8%) and apartment complexes (18.4%) with a few small apartment buildings (6.1%), mobile homes (2.0%), and townhomes (1.8%).
Now, going back to Zillow listings, we see that Inkster properties are generally evenly priced across the city, with a couple of affordable ones (similar to the City of Detroit) scattered everywhere:Source: Current listings on Zillow as of June 2022
You can certainly find a property here that meets your investment budget, take advantage of an affordable housing stock, and completely avoid the usual risks associated with Detroit investing. In other words, Inkster in Metro Detroit is a sweet spot of low risk, high rewards.
In terms of property appreciation, Inkster properties appreciated below the national average for the last decade, coming in at only 3.88%—lower than 70% of the nation’s communities. Nevertheless, over the last 12 months, Inkster’s appreciation rate has improved. It’s now at 17.88%, which is slightly above the national average. In the latest quarter, NeighborhoodScout reports that the rate is 6.78%, which is annualized to 30.02%.
Investors can still gain long-term returns with Inkster properties, though it seems like short-term investors may see better results so far. If you want to know where in Inkster specifically to invest in property appreciation, here is a heat map that shows where the potential is in the city:Source: NeighborhoodScout
Quality of Tenants, Properties, and Living
Now that we’ve discussed the financial viability of Inkster properties, the other crucial factors you should consider as an investor are the tenant pool quality, general property conditions, and overall neighborhood appeal and livability. After all, these factors determine the type of renters you’ll manage, the property maintenance you have to pay for, and the number of new residents that’ll enter the city.
So, let’s see what it’s like to live and invest in Inkster.
Average Property Class and Condition: B
Average property age: 59 years
The average property age in Inkster is 59 years old, as most Inkster homes were built from 1950 to 1959. This is 9 years older than what the real estate industry deems as “old homes,” which means Inkster properties may come with more necessary repairs, maintenance works, and the like.
Here’s a chart that compares Inkster property ages to the rest of Metro Detroit and Michigan:Source: Bestplaces
Now, old homes don’t automatically mean bad news for you. You only need to educate and prepare yourself for the usual problems that come with aged homes to be successful. Here’s a short list to get you started, so you have an idea of the property maintenance that comes with older homes:
- - Lead-based paint concerns
- - Outdated outlets & electrical systems
- - Obsolete plumbing systems
- - Old windows & poor insulation
- - Pest infestations lurking within the walls
Take your time, inspect thoroughly, and budget the repairs accurately. We also recommend that you work with professionals so you’ll know exactly how much it’ll cost to bring the property back up to rental standards. Do all these before purchase, and you should be covered from any fund-depleting situation.
Quality of Life in the Neighborhood: B+
Now, to know what kind of tenants will enter the city, you’ll need to determine the overall appeal of the neighborhood. By choosing quality neighborhoods, you’ll increase your chances of acquiring good tenants who’ll take care of your physical assets, pay rent on time, and abide by your lease agreement that’ll all impact your bottom line profits.
Here’s a glimpse of what life’s like in Inkster:
Inkster is in Wayne County, which is one of the Metro Detroit counties with an excellent economy. In fact, Wayne County’s unemployment rate is 4.5%—lower than the national average. Its top five employers (including Henry Ford Health System and Detroit Medical Center) show the diversity of the Wayne County economy, where its stability equals a steady demand for rental units in the area.
Inkster's economy, in particular, is also doing well. Here are five economic developments in the city that will benefit rental property investors like you:
- * Inkster is home to the , which is undergoing an expansion project for patient care. With nearly $1 million in federal investment for improving telehealth and virtual technology development, this development will generate economic activity and offer more jobs to the medical field and industry in Inkster.
- * Inkster is growing its housing market, with new and proposed construction plans for more than 400 residential units. There are also light industrial and commercial developments like several new strip malls. Both of these are great news for residential and commercial property investors.
- is revitalizing, developing, and beautifying
- * Inkster’s downtown district through programs, special projects, and partnering with local businesses. Downtown Inkster has since been growing with restaurants, shopping centers, entertainment venues, business offices, and residential properties.
All of these developments show that the City of Inkster is committed to economic growth. This is good news for rental property investors, as a thriving economy will lead to strong demand for rental units in the area.
Moreover, Inkster is near other strong economies like Livonia, Farmington Hills, and Canton, providing even more opportunities for employment and growth in the area.
Choosing areas with quality schools will attract families to nearby rental properties. Fortunately, Inkster has just that, with the following schools having excellent scores according to GreatSchools:
- - Inkster Preparatory Academy
- - Daly school
- - American International Academy Middle School
- - Tomlinson Middle School
Moreover, here is a heat map from NeighborhoodScout that shows you where the best schools are in Inkster. If you want to have tenant families, you’ll want to focus on properties in the darker areas:Source: NeighborhoodScout
Crime and Safety
Inkster’s crime rate isn’t the best in the country, but it’s not the worst either. We also see that the city is relatively safer on the left side than on the right, and on the top half rather than the lower:Source: NeighborhoodScout
Plus, unlike other cities, Inkster is part of the significantly diverse and dynamic Metro Detroit where the crime rates can vastly change from one street to another. Given its diversity, keep in mind that crime rates change per block and conduct your own research on-ground. There’s a high chance that you’ll find a perfectly safe property just a quick walk away from one that data will deem as “unsafe”.
Niche gave Inkster three awards, including being one of the most diverse suburbs in Michigan, the most diverse places to live in the state, and one of the suburbs with the lowest cost of living compared to nearby communities. Both diversity and affordability are excellent factors that’ll help you increase your tenant pool and attract quality tenants:Source: Niche
Here’s a breakdown from Bestplaces that gives you a glimpse of the livability and affordability in Inkster compared to Michigan and the rest of the nation. You can see that Inkster is significantly lower in living costs than its greater areas:Source: Bestplaces
Tenant Class and Demographics: C
Lastly, let’s discuss the tenant pool in Inkster. As a rental property investor, you want to see if the area has a large number of quality tenants who’ll pay their dues every month for stable cash flow, and protect your home for the long run for investment gains. The better their demographics, the higher your chances of making the most out of your investment.
Here are the highest contributing factors:
- Income: Sad to say, the average income per capita of Inkster residents is significantly lower than the average of Metro Detroit, Michigan, and the US. This means that you might not be able to earn as much rental income here as you probably can in other areas close by.
- Unemployment: Moreover, the unemployment rate in Inkster is also significantly lower than the rest. It’s far from the average of the nation, which is already at a peak. However, we do have to take the global pandemic COVID-19 into account, as Inkster might still be recovering. Plus, there’s the upside of having strong future job growth in the city nevertheless
Your tenants will likely be able to secure stable, well-paying jobs in the future that will strengthen your income stability, and it’ll only improve in the years to come.
- Education: While there are fewer people in Inkster that have graduated from high school, there are more residents here that went to high school and went straight into the workforce. With future job growth posing improvement, even those who’ve only attended high school can find good jobs in the city to pay monthly rent.
- Diversity: Now, Niche provides us with a racial diversity breakdown in Inkster:
In short, Inkster residents have lower income, impressing future job opportunities, went to high school, and are a mix of mostly African American and Caucasian compared to the rest of Metro Detroit and Michigan. All that’s left is for you to conduct thorough tenant screening to secure quality tenants with stable jobs and incomes that are at least 3x the rent you charge.Source: Google Maps
Overall Score: B-
With all of this information and our personal experience as a local property management company in Metro Detroit, we gave Inkster an overall score of B-. This score is largely based on the following factors:
- - Inkster properties have a healthy rent-to-price ratio of 1.0%, which means you’ll generate positive cash flow every month and earn your initial investment back relatively fast.
- - Inkster properties are increasing in price while still offering affordable options, being close enough to the City of Detroit without having its associated risks. It’s a good place to invest, especially if you’re a short-term investor looking to take advantage of recent appreciation gains.
- - Inkster properties are in a flourishing local economy, providing massive job opportunities in the near future—especially once the city recovers from the pandemic. It’ll continue to attract new residents with its developments in the years to come, expanding your pool of quality renters.
Now, we have to remind you of our disclaimer, as we might be somewhat biased towards Metro Detroit cities. We’ve been working in this area for more than two decades and are quite familiar with the location’s risks and rewards.
So, we suggest you take the time to visit Inkster yourself to see the investment opportunities in person. You’ll be surprised by how many properties offer a great balance of cash flow and equity gains, giving you all the factors you need to succeed with your investment properties.
Should you need more help, our inbox is also always open for you to contact us.
Our series isn’t stopping just yet! We want to cover every single nook and cranny of Metro Detroit until there’s nothing left to do by investing in multiple Michigan hotspots.
If there's an area you’d like us to prioritize, tell us in the comments below! We’ll be more than happy to meet your request. Stay tuned for our upcoming installments!