Deep Dive into Cornerstone Village, a Detroit Neighborhood
Want to invest in Detroit because you’ve heard that you can find properties here for under $100k and earn strong cash flow by renting them out?
The truth is, that’s no longer true of a lot of neighborhoods here.
House prices in Detroit have skyrocketed in recent years. The only places they haven’t are in the Class D areas, the kind where it’s always going to be a struggle to manage your properties and find decent tenants. (And we’re putting that mildly.)
But notice how we said it’s “no longer true of a lot of neighborhoods here.”
“A lot”, but not “all.”
So this Deep Dive is going to look at one Detroit neighborhood where it absolutely IS still possible to find affordable rental units in solid communities that will attract responsible tenants: Cornerstone Village.
We hit the streets last week to show you Cornerstone Village as it looks in 2024. You can check out our virtual tour to see for yourself the kinds of houses on the market here right now, and what the neighborhood is really like:
We’ve been living here, investing here, and managing rental properties here for going on 30 years now, and this is one of our top-recommended areas for rental investors. But don’t take our word for it – we’re going to take you through the data to show you why.
In these Deep Dives, our aim is to focus on the quantitative and qualitative factors that matter most to landlords, like:
- Sale Trends
- Rents Trends
- Properties on the Market Currently
- Tenant Demographics
- Neighborhood Livability
We developed our own scoring system that takes each of these areas into account (and more), so we can have a standardized Report Card for each of Detroit’s 105 neighborhoods.
This way, you’re armed with the best possible information to make an informed decision on where to purchase your next buy-and-hold investment.
We’ve already covered quite a few Detroit neighborhoods in past Deep Dives:
Interested in an area that’s not listed here? Please let us know! We’d be happy to share our data with you, and we’re always open to suggestions on which neighborhood to cover next.
But for now, let’s turn our magnifying glass on today’s area of focus: Cornerstone Village.
Overview of Cornerstone Village – Detroit, Michigan
Cornerstone Village sits just at the edge of the City of Detroit proper – next to the ultra-desirable city of Grosse Pointe, and between East English Village and Harper Woods (two also extremely sought-after areas):
We wrote a Deep Dive on Cornerstone Village back in 2022, where we recommended this neighborhood for its affordable housing stock, relatively good tenant pool, and its proximity to some of Detroit’s most expensive zip codes.
To be honest, not much has changed since then. Except for the numbers.
Back then, the average sale price was $46,929, and the average rent was $952.
But just take a look at the stats now:
Cornerstone Village – formerly called Balduck Hill – was once hit hard by the economic downturn, but it’s making a solid comeback thanks to its location.
With St. John Ascension Hospital and Grosse Pointe nearby, it’s seen a wave of economic development along Mack and E Warren Ave. It has popular chains like Starbucks and Chipotle, well-maintained public spaces like Balduck Park and the Moross Greenway, and good schools, like East English Village Preparatory Academy.
All of this is making it a desirable location for tenants, investors, and homeowners alike.
Housing Market Analysis
Let’s look at the data to see how this demand is impacting the housing market in Cornerstone Village.
Sale Trends
Prices here are up 8.2% YoY, according to Zillow. Currently, the average sale price is $79,724, which is nearly twice what it was when we last looked at the numbers in 2022:
The average home price in all of Detroit as a whole is $74,882 – so prices here are now pretty much on par with the city average.
Want more info on specific investment opportunities in Cornerstone Village, Detroit, or Michigan? Contact us for a free consultation.
Rent Trends
Back in 2022, the average rent in Cornerstone Village was $952. Today, it’s up 20.2%, to $1,144.
Here’s a then-and-now snapshot of how the market has developed here since our last Deep Dive into the area:
Compared to the rest of Detroit, this is strong growth both in terms of rent prices and home values.
Investment Opportunities in Cornerstone Village
Now, let’s take a look at some potential rental investment properties currently for sale on Zillow.
As of September 2024, there are 40 properties for sale in Cornerstone Village, mostly priced in the region of $60k-$100k:
If we look at the rental market, on the other hand, there are just 24 properties available right now, despite considerable demand from tenants.
Most of these are around the $1,100 – $1,400 mark, and nearly all are detached single-family homes with 2-3 bedrooms. It’s also worth noting that a lot of these are in pretty rough shape and have been sitting for 30+ days on the rental market.
Anything that’s been refurbished to a decent standard (like the example we’ll show below) tends to get snapped up by tenants pretty quickly.
So there’s certainly an opportunity for buy-and-hold investors to thrive here.
Example Investment Property
From just this snapshot alone, you can see that it’s pretty easy to find properties here that fit the 1% rule. But the trick is to find a property on a good street in a gentrifying block.
So let’s zero in a little further on an example of a good rental investment property in Cornerstone Village.
This property is located on a well-kept residential street, close to Balduck Park and E Warren Ave. It may be small, but sits on a healthy lot, and the potential rent-to-price ratio here is very strong, indeed.
This house requires very little work to be rent-ready, so we consider this basically a turnkey rental.
It has been on the market for almost two months, though, so it’s fair to say you could easily get it for the Zestimate price of $73,300 – about 8.3% under asking price.
At that price, here’s how a rental investment here would look:
Purchase Price: $73,300
Rent: $1,400
RTP Ratio: 1.9%
If you’re a strong negotiator, there could be more southern movement on the purchase price, too.
This just goes to show what a great market this is for entry-level investors looking for affordable properties with strong rental cash flow potential.
Area and Tenant Quality
Now let’s take a look at the qualitative factors that will most impact your rental investment:
- Housing Stock Quality
- Tenant Quality
- Area Development
- Crime & Safety
At the end, we’ll tell you our final grade for Cornerstone Village as a buy-and-hold investment area overall.
Housing Stock
Cornerstone Village was officially founded in 1925, so most of the homes here were built between the 1920s and the 1970s. That means that, as with all older houses, you should keep an eye out for age-related issues like:
- Outdated wiring
- Outdated plumbing
- Structural issues
And factor any necessary updates into your renovation budget.
There are a lot of very cheap (<$50k) vacant properties for sale here in need of serious repairs, but we wouldn’t recommend investing in one.
Instead, focus on fixer-uppers on nicer streets, like the example property we showed above. Home ownership rates are pretty high in Cornerstone Village (61%), which is reflected in how well-maintained many of the streets are when you walk through the neighborhood.
Find a property on a street like that, and you’ll be more likely to attract good tenants.
Tenant Stock
What’s the single most important factor when it comes to the success of your rental business?
Tenants.
So, what kind of tenants does Cornerstone Village attract?
Here’s a snapshot:
Tenants in Cornerstone Village are roughly Class C, trending towards Class B. There are still some Class D areas here, though, so again you need to be careful which block you invest on.
In general, however, this neighborhood is getting increasingly attractive to families looking for affordable single-family homes in a quiet, greener location.
Grosse Pointe – one of the top places to live in Wayne County – is too expensive for many to afford, and East English Village to the west is a similar story. So Cornerstone Village is the next best thing.
Economic Development
There are a lot of private and public investments taking place to improve the neighborhood further:
- UAW Ford Field, along Warren Ave, has been redeveloped to include green walkways, baseball fields, basketball courts, and soccer fields. (This is a good area to look for rental investment properties, in our opinion.)
- Mack Avenue’s commercial district has seen a huge resurgence, with many car dealerships, restaurants, and popular chains like Starbucks and Staples.
- Water & Sewer Systems Upgrades, which will enable the local infrastructure to handle an influx of new residents.
In addition to this, there has been nearly $7 billion invested across the city of Detroit in recent years. From Ford’s new $1B autonomous vehicle tech hub at Michigan Central Station to the Hudson development bringing new residences, commercial spaces and a hotel downtown, the landscape of the city is changing fast.
This is why Cornerstone Village, like many areas of Detroit, has been seeing such an increase in house prices, rents, and demand from tenants.
Crime and Safety
The crime rate in Cornerstone Village is roughly on par with the rest of Detroit.
On Niche.com, most residents give it positive reviews. One said, “The crime rate in my area seems to be low,” and another commented that it’s a, “Very good area in Detroit’s far east side overall, near Grosse Pointe, hospital, shopping.”
With that being said, this is a very block-by-block neighborhood, so it’s important to select a location carefully when investing here.
Investment Report Card
Now let’s add all of this up and give you our overall grade for Cornerstone Village as an investment area for landlords:
We’ve given this neighborhood a C+ grade because this is a redeveloping area that’s coming back. That gives it the perfect blend of characteristics for rental investors:
- Low cost barrier to entry
- Strong rental cash flow
- Decent appreciation gains
…as long as you know which block to buy on.
Because, as is the case with many parts of Detroit, neighborhoods within Cornerstone Village can vary widely from street to street. (Check out our video tour above to see what we mean.)
You can buy homes here on a Class D street for literally $4,000, but you’re going to have to put $50k+ into them, and we don’t really recommend it. We’d much rather find a Class C+ block on the same street, get a fixer-upper house there, and then there’s a much higher likelihood of the area gentrifying further and producing better returns in the long term.
So don’t just get to know the neighborhood, get to know it block by block.
But with RTPs of up to 2%, if you choose the right area, you can definitely see strong returns here.
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Stay tuned for our upcoming Deep Dives into other Detroit neighborhoods. If you have a specific area in mind, leave a comment, and we’ll be sure to cover it in one of our next installments.
Want to explore investment properties in Cornerstone Village? Contact us for a list of our available units.