Deep Dive into Metro Detroit Cities: Ecorse
When it comes to rental property investing, not all cities are created equal.
Some places offer better opportunities for investment than others, and it’s important to know which ones those are before you start sinking your money into a property.
For example, Metro Detroit is a large and sprawling metropolitan area with many different neighborhoods and cities—each with its own unique personality and set of real estate market conditions. There are different tenant demographics, property management requirements, general property conditions, and, of course, returns on investment.
Even experienced real estate investors need insider guidance when it comes to investing in Metro Detroit. That’s why we’ve developed these in-depth guides to unpack each city’s rental market scene for you. With these articles, you can sift through options and find the best investment opportunities for your goals.
Our featured city for this installment is Ecorse, Michigan; a waterfront community located just southwest of the City of Detroit. This city has a lot to offer, so let’s take a closer look at what Ecorse has in store for rental property investors like you.Source: Google Maps
Located in Wayne County, Michigan, Ecorse is a city with a population of 9,305 in an area of 3.71 sq mi (9.62 km2). These figures result in a population density of 3,279.87/sq mi (1,266.35/km2), which is relatively high compared to nearby areas. Ecorse may be a small city, but it's certainly densely populated, even though it has declined from its peak of 17,948 people in the early 1950s.
Given that Ecorse shares a border with the City of Detroit, we consider it a "Ring City". We give this name to all the cities that surround Motor City in a semicircle, providing an excellent investment balance of property affordability and reduced risks—those usually associated with Detroit real estate investing.
Here's a map for you to see where Ecorse is in Metro Detroit:Source: Georgetown Public Policy Review
Should you want to know more about the areas surrounding Ecorse, here are all the Metro Detroit cities listed in a chart. The names highlighted in green are Ring Cities like Ecorse, and you can tap on the hyperlinks to visit previously published Deep Dives:
The Waterfront Community of Ecorse
Ecorse has a lot to offer investors who are looking for an up-and-coming market with potential for growth. The city is situated on the west bank of the Detroit River, and about seven miles southwest of Downtown Detroit.
Ecorse was first settled in the early 1800s, and it officially became a city in 1895. The city’s name comes from the French word for “shore,” which is fitting given that Ecorse is located on the Detroit River.
As it was once a booming industrial town, you can find the ruins of the old Ford Rouge Plant. The plant was a major employer in the city for many years, but it closed down in the late 20th century. However, it has since fallen on hard times. The city filed for bankruptcy in 2012 and has been struggling to regain its footing ever since.
Despite these challenges, there are still some pockets of hope in Ecorse—namely, in its growing waterfront development. In recent years, the city has made significant investments in its riverfront park and there are plans to continue these revitalization efforts in the future.
For example, the city is currently working on a new master plan for the park that includes improvements to pedestrian and bicycle trails, picnic areas, playgrounds, and more. In recent years, Ecorse has also made significant investments in its infrastructure, including a new water treatment plant, a new wastewater treatment facility, and a multimillion-dollar upgrade to its sewer system.
The city is seeing an influx of new businesses and residents in recent years. Several old factories have been converted into lofts and apartments, and there are now several new restaurants and shops downtown. All of these factors have contributed to Ecorse’s growing popularity as a place to live and work.
But is it a good place to invest in rental properties? Are there opportunities for cash flow and appreciation? Let’s take a closer look at the Ecorse rental market to find out.
Rent & Rent-To-Price Ratio (The 1% Rule)
Based on data from Niche, the average rent in Ecorse is $829 per month. If we are to break this figure down to specific bedroom sizes, the rent amounts are significantly lower than the greater area of Metro Detroit, Michigan, and the nation:Source: Bestplaces
Next, let’s look at actual listings on Zillow to see if these numbers are accurate. Unfortunately, there aren’t a lot of homes listed for rent. However, we can look at the recently sold Ecorse properties and check the rent average Zillow gives them, which we’ve identified below for you:Source: Recently sold properties on Zillow as of July 2022
Based on these Zillow estimates, we see that the rent averages from Niche and Bestplaces are a tad lower than reality, possibly due to recent market shifts. That being said, this is great news for rental investors, as you can potentially charge higher rent amounts than what’s dictated by the reports.
With that in mind, let’s use the rent-to-price ratio to evaluate the cash flow generation of Ecorse properties. The industry standard is to ensure that the rent amount is at least 1% of the total property price for you to reap substantial returns.
We’ve chosen this particular listing below of a three-bedroom, single-family residence in Ecorse. With an estimated rent of $999 and a sold price of $35,000, the ratio results in a massive 2.8%.Source: Listing on Zillow as of July 2022
This figure is significantly higher than both the industry’s minimum and Metro Detroit’s average of 1.0% to 1.5% for Ring Cities. This indicates that there’s a high chance for you to have strong cash flows with Ecorse rental properties.
House Value and Appreciation
According to Niche, the average house value in Ecorse is $43,500. If we look at Zillow’s reports, however, the overall home value in the city is closer to $66,252 and has been climbing by 15.9% over the past year. Based on those trends, we may see this growth continue in the years to come:Source: Zillow
Moreover, we see further proof of the uptrend of Ecorse property values from Redfin, where it reports that the median sales price has increased by 33.9% to reach $51,000, and the number of homes sold has been growing by 40% year-over-year:Source: Redfin
According to Redfin, Ecorse’s real estate market is “Somewhat Competitive”, where homes can get multiple offers. Of course, some properties are selling roughly 3% below list price, but homes that are in-demand or “hot” can sell for the list price easily.
Based on NeighborhoodScout, single-family homes are popular in Ecorse, taking up 74.8% of all properties here. Next are small apartment buildings (13.3%), mobile homes (6.1%), townhomes (3.0%), and apartment complexes (2.9%). In terms of size, nearly half (46.2%) of Ecorse homes have three bedrooms, a third (32.8%) have two bedrooms, and the rest have either one or four bedrooms.
Referring back to Zillow listings, we see a good selection of two-, three-, and four-bedroom homes in Ecorse. Prices range from $27,000 to $150,000—depending on the location and size of the home you choose. Notice how there are many affordable options here, similar to other Ring Cities:Source: Listings on Zillow as of July 2022
Ecorse property prices reflect the affordable housing market of the City of Detroit, especially since Motor City sits right above Ecorse. As mentioned earlier, Ring Cities like Ecorse are where you’ll see the famed “cheap properties” without the risks common to Detroit real estate investing.
In terms of appreciation, NeighborhoodScout says that Ecorse real estate appreciated 80.73% over the past decade, translating to an average annual rate of 6.10%. These figures put Ecorse properties in the top 30% nationwide for real estate appreciation.
While Ecorse’s appreciation rate was one of the lowest in the nation over the last quarter, its annual appreciation is still higher than 60% of all cities and towns in Michigan. You can certainly reap equity gains by investing in this city—on top of your strong cash flow stream.
NeighborhoodScout also gave a heat map so you know where to focus in Ecorse if you want to take advantage of its impressive appreciation rates:Source: NeighborhoodScout
Quality of Tenants, Properties, and Living
Financial viability is a key success factor in rental property investing. But we can’t ignore the other crucial factors such as the quality of tenants, the general condition of the properties, and the overall appeal of living in the city. These elements determine the type of tenants you’ll manage, the property maintenance you’ll handle, and the level of attraction your property will have.
Average Property Class and Condition: C+
Average property age: 69 years
Bestplaces reports that a third (34%) of all properties in Ecorse were built in 1939 or earlier, resulting in an average property age of 69 years old. In the real estate industry, any property age higher than 50 is considered “old” which means you might come across many older homes in Ecorse:Source: Bestplaces
Still, older homes do not automatically equate to a bad investment. Instead, it only means that you’ll have to learn how to deal with higher maintenance demands and handle major renovations to bring a home back to rental standards. Plus, since Ecorse is a developing city, you might find well-maintained, recently-upgraded properties in the area.
As long as you conduct thorough research of the housing market, pay attention to all the details when inspecting older homes, and work with professional inspectors to budget properly, you’ll surely find excellent investment opportunities to take advantage of Ecorse.
Quality of Life in the Neighborhood: B-
Let’s now check the quality of life in Ecorse. As a rental investor, you’ll want to purchase homes in good locations that’ll attract quality renters who are responsible for paying rent and maintaining the home, maximizing the impact of your investment return. Plus, nobody wants to chase up tenants for overdue rent or spend half their funds repairing what could’ve been avoided.
Here is the quality of life in Ecorse:
The local economy in Ecorse is quite strong, thanks in large part to its proximity to the City of Detroit. In fact, many people who work in the City of Detroit actually live in Ecorse because the housing is more affordable.
Moreover, Ecorse itself is showing strong economic growth in recent years, since implementing a vision to transform its community into a residential, recreational, and commercial hub. Here are some of its economic development strategies to make the dream a reality:
- - Revitalizing West Jefferson Avenue into a walkable, mixed-use corridor for a residential district near Detroit River, establishing a joint framework with River Rouge to complete the project
- - Redeveloping Mill Street into an area for light industrial and logistics, beautiful neighborhoods, and commercial districts, working with Michigan Economic Development Corporation (MEDC) to leverage its transportation corridors, workforce, and access to the Detroit River
- - Reenvisioning Ecorse Creek to reclaim its waterfront assets and turn the 58-acre parcel into a wildlife and recreation corridor for boat launches, staging areas, concessions, and more
All of these new businesses and developments are good news for Ecorse’s economy—and for rental property investors. As the city continues to grow, there will be more demand for rental units,
which should lead to higher rents and increased occupancy rates.
GreatSchools shows us that the public schools available in Ecorse are Grandport Elementary Academy, Ralph J. Bunche Academy, and Ecorse Community High School. The quality of these schools is promising and can help you attract families, especially if you choose areas that are indicated in the heatmap below:Source: NeighborhoodScout
Crime and Safety
Ecorse is no stranger to crime looking at recent reports. However, it’s also not the most dangerous area to live in.
Take a look at this heatmap from CrimeGrade and you’ll realize that the crime rates in Ecorse vary from street to street. This variation becomes clearer when you visit the area yourself, as Metro Detroit cities have wildly varying crime rates from one block to another.Source: Crimegrade
As always, it’s best to get information from the neighbors to evaluate the crime rate on the exact location you plan to invest in. That way, you invest in an area that’s safe for your property and your tenants.
Areavibes gave Ecorse an excellent score for amenities and cost of living. While its employment opportunities, housing options, crime rates, and schools rank lower than others, affordability is the selling point of living in Ecorse. Here’s a breakdown of the cost of living from Bestplaces:Source: Bestplaces
Tenant Class and Demographics: C+
Finally, let’s look at the potential tenant pool you’ll have in Ecorse. Smart property investors will ensure that the demographics support their goal of conducting a profitable rental business—one that will have capable, financially responsible tenants.
Here are the key factors that contribute the most to your investment success:
- * Income: The average income of residents in Ecorse is significantly lower than in Metro Detroit, Michigan, and the United States. Of course, this is ideal because it means you can’t charge higher monthly rent. Even if you push through with higher rent, your tenants will struggle to keep up with the payments given their limited income stream.
- * Unemployment: The unemployment rate in Ecorse is a tad higher than in Metro Detroit, being nearer to Michigan and the nation. Keep in mind that this rate may still be affected by the global pandemic where people lost jobs and businesses closed down.
- The more important factor to notice here is the future job growth in Ecorse, indicating that tenants will steadily get better-paying jobs to afford rent better homes.
- * Education: While there are fewer people in Ecorse that have graduated high school and proceeded to earn degrees, there are more locals here that have attended grade school and high school compared to nearby areas. As job opportunities increase, Ecorse residents will be able to secure jobs with their high school education.
- * Diversity: Here is the racial diversity breakdown in Ecorse from Niche:
Given the lower average income, higher unemployment rate, and low education, you’ll likely need to conduct thorough tenant screening diligently to secure quality tenants with stable enough jobs to afford a steady monthly income.
Should you run into tenants that require higher levels of management, you can always choose to hire a property management company like Logical Property Management instead. Then, you won’t have to worry about receiving payments, maintaining your assets, and ensuring that the tenants comply with lease agreements as much.Source: Google Maps
Overall Score: C+
We’ve given Ecorse a score of C+ for rental property investment. While the tenant pool and older housing stock will likely require hands-on management, the following reasons are enough to make Ecorse a good place to start investing in Metro Detroit rental properties:
- - Ecorse’s rent-to-price ratio is an impressive 2.8%, indicating that you’ll be able to generate strong cash flow streams from its rental properties. You’ll easily earn back the capital you put down and start reaping positive returns in no time.
- - Ecorse’s median house values are at $66,252 and are increasing by 33.9% year-on-year. Investing in this city means you can purchase affordable homes that will generate equity gains for you in the long run, giving you a balance of good cash flow and appreciation gains.
- - Ecorse’s property appreciation rate is at 80.73% over the past ten years and has an average annual rate of 6.10%. Ecorse is one of the top 30% nationwide for real estate appreciation, making it an excellent city for long-term real estate investors.
Ecorse provides many good opportunities for you to expand your rental portfolio and enjoy an excellent balance of cash flow and equity gains. In fact, you might want to invest in more than one property!
Of course, maintaining multiple homes by yourself is a tall order, but if you hire professional help from expert property managers in the area, it can certainly be easy.
With our in-depth, local knowledge of Metro Detroit and its tenants, our team has the experience and expertise to direct you toward lucrative investment deals. We’ll help with the nitty gritty responsibilities of being a landlord, so you can focus on becoming a successful real estate investor.
Get in touch with our team and let’s take advantage of Metro Detroit’s hotspots—one property at a time.
Do you want to explore other areas aside from Ecorse?
This article is part of our ongoing series that unpacks the rental property opportunities in Metro Detroit. So check out our other installments or comment below for any specific requests you’d like us to prioritize.
Interesting read. I have been exploring properties in Detroit. Be open to talking.
Brian Bisdorf, 2 months ago