Previously known for manufacturing and agriculture, Michigan is a state on the up and up, reinventing itself as a relaxing Midwestern vacation destination. Its rich cultural history and beautiful, well-curated parks make it a popular destination for tourists from major cities like Chicago who want to escape it all and breathe in Pure Michigan for a day or two. In addition, it's caught the attention of the federal government and local investors who hold high hopes for its future.
Wise real estate investors have begun building inroads into the Midwestern market - and many are doing so through Michigan DSCR loans. Unlike a conventional loan, a DSCR loan focuses almost entirely on the property's cash flow, doing away with the need to examine the borrower's personal finances; all that's necessary is the borrower's credit score, a down payment, and proof that the property's monthly rental income exceeds the monthly mortgage payment.
Visio Lending, a national leader in DSCR loans, has a well-established DSCR loan program in Michigan that allows real estate investors to join the rebirth of this Midwestern manufacturing powerhouse.
A DSCR loan in Michigan offers you access to a promising market on the up and up; Michigan has been ranked the #1 economy in the 37 states with a population of over 2 million. Seven of its ten largest corporations are the top in their respective fields, and manufacturing is experiencing explosive growth all across the state, surging over 25% from 2019 onward.
What's more, it has miraculously bounced back from the pandemic: whereas there was over 23% unemployment during the pandemic, it has now returned to under 6%.
There's also been incredible interest from the local and federal government in revitalizing Michigan, recognizing its great potential. Federal funding has afforded over 200,000 Michiganders access to high-speed internet, which will help many locals build their own businesses and access higher education.
Both the public and private sectors have committed to boosting Michigan's manufacturing industry; given that this is one of the historic hubs for the automobile industry, it simply makes sense that Ford Motors is building a brand new electric vehicle plant in Marshall, Michigan, to bring jobs to the area. In addition, the federal government has committed to helping improve the state's transportation infrastructure, which will also attract new businesses.
Despite all these fantastic developments, housing is incredibly affordable at an average home price of just $214,231, well below the national average. Buying rental properties here is both highly lucrative and very cost-effective for real estate investors, and a DSCR loan will help you quickly join this bullish real estate market.
It's clear that Michigan is a rising star in the US economy, and DSCR loans can help you be part of this meteoric success.
Beautiful Michigan is full of excellent markets, each with its own unique strengths, but these are the five hottest markets based on economic growth, earning potential, and demographics. While many investors choose to pour money into more prominent cities like Dearborn or Detroit, there's great potential in the medium-sized towns that make up Michigan's heartland.
The Grand Rapids economy is expected to grow twice the national average, meaning that real estate investors should jump in before this city takes off. Currently, the average rental income is $1,550 for residential properties, while commercial properties make about $18.33 per square foot.
Ann Arbor is a college town, meaning it needs plenty of rental property for students and retail shops to satiate culture-hungry youth. Rents are much higher here at $2,250, and a commercial property's monthly rental income is around $25.99 per square foot.
Lush with untapped potential, Macomb Township is an outdoor paradise with lots of recreational activities for tourists; this means short-term rentals are often more lucrative than longer terms. It has some of the lowest rent in the state at just $1,122 per month, while commercial rental income is a bit higher at $22.86 per square foot. In comparison, vacation rentals make, on average, about $140 a night.
The largest municipality on Cape Cod, Barnstable, is home to breathtaking scenery, diverse wildlife, and a friendly downtown. Vacationers flock to the region to enjoy its art galleries, small shops, and excellent food scene, ensuring steady tourist income throughout the summer.
Residential rental property provides about $3,000 per month; commercial spaces are sparse here, but they average about $20 per square foot.
Traverse City is a winter wonderland popular with tourists, but it also has a very high rental population of almost 40%, making it great for real estate investments. Its rental income is slightly lower than Ann Arbor's at only $2,100. On the commercial rental real estate side, office space makes more than retail: $22.33 per square foot versus $17.52 per square foot, respectively.
Another college town, Kalamazoo is known for its laid-back culture, home to both Kalamazoo College and Western Michigan University. Rents are quite low at $1,200 per month across all property types, but this may rise soon: tourism has taken off here, with spending up almost 40% since 2020. Like Traverse City, its strength lies mainly in office buildings, which make $23.08 per square foot; retail spaces make only $17.29 per square foot.
Check out some of Visio Lending's recently closed DSCR loans in Michigan.