Deep Dive into Detroit Neighborhoods: Green Acres
If you’ve been a real estate investor for a while, you’ve likely heard of the very affordable properties in the City of Detroit. Michigan’s Motor City has property prices that shock most investors from California, Boston, and New York, as you can snag single-family or multifamily units for a fraction of the national average purchase price here.
Combine the low prices with the booming demand for single-family homes in the City of Detroit, and it comes as no surprise that this city is one of the nation’s top destinations for rental investors to reap strong cash flow returns.
That being said, there is a catch. The City of Detroit is exceptionally diverse. There are more than a hundred neighborhoods here, all with varying sub-areas, property conditions, and tenant demographics. Because of this, newbie investors and moguls alike need expert knowledge and guidance to navigate the inevitable risks in the Detroit market. Only with the right guidance and information can they gain the famed returns of the Detroit rental market.
Given that, we’ve created this Deep Dive series to give local and out-of-state investors an in-depth view of the Detroit housing market. Our team is a local property management company in the greater Metro Detroit area, so we have the experience and insider knowledge to guide you into the City of Detroit.
Our goal is to give you everything you need to begin investing in one of the country’s hottest rental estate markets, focusing on the following factors that contribute to your investment success the most:
- The expected returns from rental properties
- The types of tenants to expect
- The kind of property management required
Are you ready to dive into the City of Detroit? This article focuses on one of its good neighborhoods: Green Acres—known for having a variety of well-kept homes.
City of Detroit
Before we get into the nitty-gritty details, let’s look at the big picture. The City of Detroit has 11 regions:Source: Wikipedia.com
Each of these regions has a distinct personality.
For example, Downtown Detroit is the city’s central business district and residential area. Midtown, on the other hand, has a mix of business, cultural, residential, and university areas. New Center is a historic district with commercial and residential spots. And the North—where our featured neighborhood today resides—has a blend of historical, residential, and university areas.
The North region includes neighborhoods surrounding the campus of the University of Detroit Mercy, such as the neighborhoods of Chaldean Town, Grixdale Farms, Highland Park, Palmer Park Apartment Building Historic District, Palmer Woods, Sherwood Forest, and University District.
For a closer view, here’s a map that shows where the neighborhoods are in the different regions. We’ve also provided a list, where the ones with hyperlinks will bring you to previously published deep dives:Source: Loveland’s Detroit Neighborhoods Map
Our Focus: Green Acres Neighborhood
Green Acres is #72 on the list above and is identified with a red arrow on the map. Its northern boundary is 8 Mile Rd, with Livernois on the west, Pembroke on the south, and Woodward Avenue on the east.
This neighborhood was established in 1936 as a residential area, known for its various housing styles from the 1920s, 1930s, and 1940s. Just walk through Green Acres and you’ll see much well-maintained brick Tudor and colonial homes.
“The thing about Green Acres is all the homes are different,” says Maria Dickerson, the president of Green Acres Woodward Civic Association. “You have homes that are in their original design with stained glass windows and a lot of them with natural fireplaces.”
And a local who has lived in the neighborhood since 1984 shared, “The architecture is the first thing that grabbed me. Our house is built like the homes down at Fort Wayne, off Jefferson Avenue. It’s the old Colonial style and I was attracted to that. And, the neighborhood was well-groomed, as well.”
But are beautiful homes all that Green Acres has to offer? What are the investment factors that the neighborhood has for you to take advantage of? Let’s dive deeper into the numbers to find out.
Rents & Rent-To-Price Ratio (The 1% Rule)
According to Niche, the median monthly rent across all property types in Green Acres is $1,221. This figure is 48.18% higher than the City of Detroit’s median rent of $824.
If we were to look at the current “for sale” properties listed on Zillow and Realtor, however, we see that the average rent for a two- or three-bedroom property charges even higher than Niche’s average:Source: Current listings on Zillow and Realtor as of May 2022
Source: Current listings on and as of May 2022
The higher the estimated rent, the higher the cash flow for you. So it’s likely that the Green Acres market is moving toward your advantage as a rental property investor.
Knowing the average rent is nothing without comparing it to average property prices, so let’s see what the rent-to-price ratio is like with Green Acres properties. The industry rule is to ensure that the rent is 1% or higher than the total property price (including the repair cost) to ensure positive cash flow.
Given the median monthly rent of $1,221 (slightly understated) and an average house value of $142,889 (also slightly understated) by Niche, the rent-to-price ratio is 0.8%. This figure falls a bit short of the industry standard. Even if we use actual examples like the $1,350 rent of the Zillow listing above and the average property price of $187,000 by the Realtor, the ratio still comes out as 0.7%.
You’ll have to be very careful with the rental properties you invest in Green Acres, ideally ensuring that their rent-to-price ratio is 0.8% or higher for strong cash flow.
Property Values and Appreciation Trends
Moving on to property values, Niche reports that the average house value in Green Acres is $142,889. While it doesn’t provide us with past performance or forecast, Redfin shows that the sales price rose by +41.8% since last year (with a higher estimate of $187,000 per property, too!).Source: Redfin
If we are to peek into the Zillow properties that sold in the past three months, we see that the prices are higher than both Niche and Realtor’s average price. This means that the growth Realtor gives us is likely accurate, and we might see prices continue to skyrocket in the next years:Source: Zillow properties sold in the last three months as of May 2022
While rental property investors are usually only focused on cash flow, increasing property prices means that you’ll also have impressive equity gains in the future. It also means that people are increasingly attracted to this neighborhood, giving you a larger tenant pool to work with.
In terms of appreciation, Green Acres falls on the higher end of the spectrum compared to other areas of the City of Detroit. As you can see in the heat map below from NeighborhoodScout, Green Acres is looking pretty green—indicating high property appreciation rates:Source: NeighborhoodScout
Neighborhood, Properties & Tenants
Now, let’s take a look at the overall livability, general property conditions, and tenant demographics to expect with Green Acres homes. These are important factors to consider as a rental property investor, as they’ll determine the property management and maintenance you need, as well as the appeal of the neighborhood to attract more residents.
Let’s start with the quality of life in Green Acres.
Quality of Life in the Neighborhood
There are two factors that will affect your profitability: the neighborhood’s livability and its tenant class. A high-quality, attractive neighborhood will give you a tenant pool filled with renters who’ll pay on time, take care of your assets, and abide by lease agreements, while the opposite might skip payments, treat the home poorly, and leave you with depleted profits.
In other words, you want to invest in areas that attract the kind of tenants you want.
Green Acres itself is a residential neighborhood, but it’s surrounded by thriving business communities on Livernois Avenue. Here, locals can find many restaurants and shops, all within walking distance.
For example, popular destinations include Kuzzo’s Chicken & Waffles, Mr. Fo-Fo’s Deli, 1917 American Bistro, and Avenue International Kitchen. There’s also Bucharest Grill and Southern Comfort that’ll open soon, where diners can have great food after visiting the unique neighborhood shops. There are some older businesses too that continue to thrive, like Baker’s Keyboard Lounge and other multi-generational shops.
“The Avenue of Fashion is a little bit different from a lot of the districts. We have a lot of specialty boutiques with one-of-a-kind, original pieces,” said the president of the Avenue of Fashion Business Association, Dolphin Michael.
“The new trend now is to have walkable business districts, so you don’t really want to get in your car and drive out to wherever. You want to just walk over to the shops, go shopping, and buy whatever you need,” which explains the tremendous foot traffic in the area.
Green Acres is near this busy avenue, where the vibrant community in Livernois contributes greatly to the overall appeal of Green Acres. It also has easy access to Gateway Marketplace and commercial strips in Ferndale close by. As you can imagine, most residents will live in Green Acres, and travel a short distance to nearby business areas for work.
Crime and Safety
Based on Niche’s rating, Green Acres is slightly safer than the rest of the City of Detroit. Plus, its residents are actively helping reduce crime in Green Acres, where they implemented citizen patrols that work with the local precinct to report suspicious activity and concerns.
Still, as with any neighborhood in the city, Green Acres’ crime rates will undoubtedly vary from one street to another. Being a real estate investor, ensure that you conduct thorough research on the crime and safety rates on the specific block you’re eyeing to have an accurate understanding.
Just like all the other neighborhoods in the City of Detroit, Green Acres is within the Detroit Public School District, where you can find Green Acres Elementary—ranked five stars and 7/10 by GreatSchools. In terms of test scores, student progress, and equity, the school is above average.
There’s also Green Acres Nursery and Kindergarten for families with younger children, Barack Obama Leadership Academy (K to 5th), Bridge Academy West (6th to 8th), and Cesar Chavez Academy High School (9th to 12th) nearby based on Detroit Schools Guide.
Green Acres is also known for having pleasant, united residents. “I would say that we’re a people’s community in that we are very open to ideas and diversity, and we want people to become involved,” shared Maria Dickerson, the president of Green Acres Woodward Civic Association.
The neighborhood’s homeowners association is also extremely active, with year-round events, monthly newsletters, and other activities. “Our association does a lot of things as far as beautification and safety. We have committees that deal with city services. They go downtown to hearings. We have some vacant properties in our area and we have a committee that keeps the houses looking like they’re lived in. We do things that build community pride,” Dickerson explained.
Areavibes gave Green Acres a livability score of 69/100, which is considered average. Nevertheless, it’s ranked #15 in the City of Detroit, and #47 in all of Michigan, making it better than 55% of all areas.
Green Acres attracts residents looking for a beautiful place to live, but not necessarily a budget-friendly, affordable one. Areavibes also gave a chart of what the cost of living is like in the neighborhood, showing that it’s slightly more expensive than the rest of the City of Detroit:Source: Areavibes
While Green Acres is relatively walkable, most locals either drive to work (83.3%) or carpool (6.7%) instead of walking. A small percentage (10%) is also working from home, probably due to the recent COVID-19 pandemic.
Overall Neighborhood Class: B+
Average Property Age & Condition
Average property age: 83 years
According to City-data, Green Acres properties were built in 1960 or earlier, with most of the homes leaning on the older end of that spectrum. Given that, the average property age of Green Acres homes is around 83 years old—way above the industry standard of what is considered an “old” home.Source: City-data
Based on the chart above, the majority (41.58%) of Green Acres properties are aged 83 and above:
Now, having an “old” home doesn’t always mean something bad. Property age is subjective, after all, and you can still find beautiful brick Tudor homes that are well-maintained in Green Acres. (Just take a look at this Tudor-style home with amazing interior designs and decorative modeling!)
Still, here are the old-home problems you should look out for:
- Old windows and lack of insulation
- Failing sewer lines
- Corroded galvanized plumbing supply & waste lines
- Outdated electrical systems
- Previous alterations & maintenance not up to code
- Toxic lead paint
The list isn’t exhaustive, but it should give you a glimpse of what you should prepare for when dealing with old homes—while preserving their unique personality and heritage.
Overall Average Building Class: C+
Compared to other real estate investments, rental properties are the only ones that require a thorough evaluation of a neighborhood’s potential tenant pool. After all, you don’t want to invest in a home only to find out that the locals don’t have enough income or stable employment to pay monthly rent.
Not to worry, we’ve already listed it out for you below. You’ll see the key factors that contribute to tenant class and demographics in Green Acres, so you know what kind of tenant you’ll likely find. Keep in mind that some of these factors (like average income and unemployment rate) might still be affected by the global pandemic.
According to Niche, the median household income in Green Acres is $64,998 per year or $5,416 per month. This number is 110.39% greater than the median household income of the City of Detroit, where locals earn $30,894 per year or $2,574 per month.
The higher income your tenants earn, the more they can afford rent, and the more you can potentially charge a higher amount without worrying about their financial capability. Just remember to follow the industry standard of ensuring that the rent is not more than 30% of the tenant’s income.
Unfortunately, Areavibes reports that the unemployment rate in Green Acres is 14.7%. This rate is higher than the City of Detroit (11.9%) and Michigan (5.2%). Still, don’t forget that we just went through a global pandemic. So the economy is likely still trying to recover from its devastating effects, and these figures probably don’t reflect the up-to-date situation.
Ensure that you conduct thorough tenant screening to see if the applicant has a stable job. Its stability will directly relate to your rental income, as well as the tenant’s ability to maintain the home.
Niche shows that the majority of Green Acre residents (28%) have some college or associate’s degree, while others have a master’s degree (25%) or a bachelor’s degree (25%). Only 14% have but a high school diploma and even fewer have less than a high school diploma (8%).
In contrast, while more locals in the City of Detroit have some college or associate’s degree (33%), only 6% have a master’s degree and only 9% have a bachelor’s degree. In other words, Green Acres locals seem to have a greater educational achievement than residents in other Detroit neighborhoods.
This means that your tenant pool has a higher chance of securing well-paying jobs, enabling them to rent at a higher cost and take care of the property well.
In terms of racial diversity in Green Acres, here is a chart provided by City-data:Source: City-data
In a nutshell, the tenants you’ll find in Green Acres fall on the higher end of the spectrum. They’ll likely have higher monthly income, higher educational attainment, and relatively more stable jobs. Still, let’s not forget that Green Acres has a higher percentage of unemployment, so you’ll have to screen thoroughly for the tenants that do have a well-paying jobs.
Additionally, 73% of Green Acres residents own their homes, which is 15% higher than the national average. In other words, you’ll likely work with a smaller tenant pool, where only a few people will rent.
Let’s push the analysis further by checking the rent-to-income ratio.
The industry standard is to ensure that the tenants earn a monthly income that’s 3x the rent amount. As an investor, you’ll want to stick to this ratio as closely as possible, because the stability of your cash flow will depend on the financial ability of your tenants.Source: Current Zillow listing for rent
So, residents in Green Acres earn an average household income of $5,416 per month based on Niche. If they were to rent a three-bedroom home for $1,350 (like the Zillow listing above), they’ll have to set aside around 24.93% of their income for rent.
The result is close to the industry standard, which is good news for you as a rental investor, although you might want to screen for tenants that earn a bit more (or charge lower rent) to secure stable cash flow.
Overall Tenant Class: B+
Based on all the information we’ve provided in this article and our personal experience as a property management company in Metro Detroit, we’re giving Green Acres an overall score of “B” for rental investing. Our conclusion is based on the following key contributors:
- Average rent amounts in Green Acres are higher than in the city, which means rental property investors like you can potentially earn higher rental income than in other neighborhoods. Still, don’t forget that you should find homes that can give you a rent-to-price ratio of at least 1%, as some of the Green Acres properties will fall a bit short of that standard.
- Home values in Green Acres are on the rise, where home prices have increased by 41.8% in the past 12 months. This figure will likely continue to grow, giving you great opportunities to invest for equity gains on top of the stable cash flow. Research also shows that Green Acres is one of the higher contributors to the city’s impressive appreciation rates.
- Tenants in Green Acres have a higher income than the rest of the city, potentially attracting new residents seeking better-paying jobs for the years to come. This also means many tenants can afford higher rent—you only have to ensure that you find them.
Given all the information we’ve scoured for this article, we see Green Acres as a good neighborhood to invest in rental properties, where you can find excellent opportunities to grow your real estate portfolio.
If you’re still unsure and hesitant to get a slice of the Detroit market, reach out to our team for more guidance. We’re more than willing to help you in your investment journey. In fact, we’ve already helped more than a handful of investors over the years to invest all over the greater Metro Detroit area successfully! Get in touch with us today to grab your share of the opportunities.