Deep Dive into Morningside, a Detroit Neighborhood

Deep Dive into Morningside, a Detroit Neighborhood

Today we’re taking a real estate investor’s Deep Dive into the Morningside neighborhood of Detroit, Michigan.

This is just one of Motor City’s 183 neighborhoods. Which is a lot. And that’s why we created this series to explore each one from the POV of a rental investor.

We’re Detroiters who’ve owned, financed, flipped and managed properties here for 30+ years, so we’ve got intimate knowledge of this city, block by block. And now we’re sharing those insights with you.

To start with, we walk you through the neighborhood in our video series:

Then, we get into the nitty-gritty of the numbers in these extended Deep Dive articles.

We’ll give you all the info you need to make a smart investment decision here, including:

• Sale Trends
• Rents Trends
• Properties on the Market Currently
• Tenant Demographics
• Neighborhood Livability
• …and more!

Stick around to the end, because we’ll also tell you exactly which streets we think are great for landlords to focus on (and which to maybe avoid).

That’s critical information in a city like Detroit, where just one block in either direction can make a huge difference in terms of area and tenant quality.

We’ll also be giving Morningside a final grade for its overall investment potential, so you have an objective method of comparing different Detroit neighborhoods side by side.

We’re working our way through the whole city, one at a time. Check out the neighborhoods we’ve covered 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 dive into Morningside.

Overview of Morningside – Detroit, Michigan

Morningside is a neighborhood in eastern Detroit, bordered by I-95 and Harper Ave to the north, Mack Avenue to the south, Alter Road to the west, and Whittier Ave to the west:

 

Morningside also sits on the cusp of the City of Detroit proper – everything south of Mack is the Grosse Pointes, everything north of it is Detroit. The moment you step across that street, it all changes: zip code, house values, area quality – all are a lot more exclusive in the Grosse Pointes.

East English Village  (aka “EEV”) to the east of Morningside is also known as a “cool” area to live that’s ultra desirable with tenants, thanks to its cafe culture lifestyle and historic charm, so prices there have been increasing rapidly in the past 6-7 years.

But, while adjacent to these trendy neighborhoods and packed with period properties of its own, Morningside is far less expensive to live in. So that makes it attractive to renters and investors alike.

Here are some fast facts on Morningside, to paint a better picture:

In summary, this is a Class C area that’s just starting to experience a major comeback in the past year or so.

Similar to nearby Cornerstone Village , more and more people are starting to move here as they’re being priced out of the Grosse Pointes and EEV, so prices won’t stay low forever.

In fact, we wrote a Deep Dive into Morningside back in 2021, where we gave it a B+ rental investment score for its:

• Affordable properties
• Strong rent-to-price (RTP) ratio of 1.7%
• Potential to attract tenants priced out of EEV

But how have things changed in the past 3 years? Are purchase prices still low? Are RTP ratios still so high?

Let’s Deep Dive into the numbers to find out.

Housing Market Analysis

To start, let’s look at property prices and rental trends in Morningside over the past few years.

Sale Trends

Home values have risen almost exactly 200% over the past 7 years – from $31,850 in March 2017 to $95,585 in November 2024:

 

The average home price in Detroit is $74,882 – so prices here are now above average, but still very reasonable.

Think about it: What other major metro city in the US has detached houses for sale for under $100k???

But, with prices appreciating at 7.9% annually, we definitely advise buying sooner, rather than later, if you want to take advantage of those potential equity gains.

So, how do rents in Morningside compare? Is the RTP ratio still 1.7%?

Want more info on specific investment opportunities in Morningside, Detroit, or Michigan? Contact us for a free consultation.

Rent Trends

Back in 2021, the average rent in Morningside was $963/month. Now, it’s $1,158 – an increase of 20.2% in just 3 years.

Here’s a before-and-after view of the housing market in Morningside since our last Deep Dive into the neighborhood:

 

To put that in context, Detroit rents have increased 1.7% YoY on average, and sale prices by 20.7% YoY, over the same period.

And appreciation gains are certainly not a thing of the past here just yet.

If you look at neighboring East English Village, average sale prices are currently at $140,116 and climbing. So as Morningside continues to develop and receive the resident overflow from EEV, prices here will continue to climb, too.

Investment Opportunities in Morningside

Now, let’s look at some units for sale right now.

As of the time of writing (November 2024), there are 42 houses on the market in East English Village:

There’s a pretty even mix of newly-renovated and distressed properties on the market in Morningside, most of which are single-family homes. We’ll take a look at both options (Turnkey & Fixer-Upper) below, with some actual properties for sale on Zillow currently, so stick around.

But for now, let’s compare this to the rental market.

As of November 2024, there are just 16 units available:

100% of them are detached single-family homes, and all but 1 are 3 bedroom, 2 bathroom properties.

That’s pretty much what most of the housing stock consists of here, although more apartments and multi-family units are now being built.

The average rent amount in Morningside is $1,158 according to our data above, but as you can see, there’s nothing on Zillow for under $1,300 right now (and it’s winter!). So realistically, the average rent in Morningside is more like $1,300-$1,800, depending on the level of finishings and the size of the property.

With average sales prices around $95,585, here’s how the numbers add up:

Average Sale Price: $95,585

Average Rent: $1,550

Average RTP Ratio: 1.62%

It’s not the 1.7% it was in 2021, but still very healthy.

Now, let’s zoom in on a few of these properties and run the numbers.

Example Investment Properties

Let’s take a look at two very different propositions on the market right now in Morningside, which happen to be on the same street.

1. The Fixer-Upper

The first option is a serious renovation project.

This 3-bedroom house is on Buckingham Ave, a leafy, peaceful residential street lined with period brick properties that’s high on our list of the best areas to invest in Morningside:

The interior is rough, but the bones of this 1930’s house definitely give you something attractive to work with. And, considering it’s just had a $10k price drop, you should be able to secure this property at $45,000 or less.

So if you’re willing to tackle a complete floor-to-ceiling renovation (and negotiate on the price a bit), here’s how the math would work:

Purchase Price: $45,000

Repair Costs: $50,000

After-Repair Value: $95,000

Monthly Rent: $1,300

RTP Ratio: 1.37%

That’s already a great potential return. But this property also has an unfinished 1,070 square foot basement which could be turned into additional living space, or even a second unit.

We estimate that the market value for this property in a fully-renovated condition would be somewhere in the region of $120,000.

If you could convert it into a multi-family or 4 bed/3 bath (which should be possible with 1,070 sq. ft. to play with), it would be worth more like $165,000+, with a monthly rent of $1,800-$2,400.

But if that sounds like way too much work for you, there are also a lot of rent-ready properties for sale in Morningside that would make perfect rental investments, too.

1. The Turnkey Rental

Here’s another house for sale for comparison, just a block away:

This home is 40% larger than the first property (minus the unfinished basement), but sits on the exact same sized lot, and it shows you what the finished product of a fairly basic, rent-ready renovation could look like.

But this is also a solid option for a turnkey rental investor from out of state who doesn’t want to do any work on a property. With an estimated rent of $1,400 per month, this meets the 1% rule without the need to spend a penny on improvements:

Purchase Price: $129,300 (according to the Zestimate)

Monthly Rent: $1,400

RTP Ratio: 1.08%

It’s not easy to find deals like this nowadays – but in Morningside, there it is. Just sitting on Zillow!

Area and Tenant Quality
Now that we’ve looked at the numbers, let’s move on to a more qualitative analysis.

We’re going to analyze Morningside’s:

1. Housing Stock Quality
2. Tenant Quality
3. Area Development
4. Crime & Safety

To give an overall view of the liveability of the area, and what kinds of tenants it attracts.

We just wanted to start by quoting a great Reddit thread, where one resident describes what attracted them to the area:

• Great prices. I picked up a 2,300sq/ft home for under $200k in excellent shape – move in ready. This was 3 years ago.
• Homes are older and have great charm and character. Generally brick and very sturdy.
• Access to Mack and all the businesses in the Grosse Pointes
• Access to I-94 is very easy-Balduck Park 1 mile to the East, Palmer Park (with water park) 1 mile to the West
• Still in progress E Warren Redevelopment is looking promising and hopefully it matches the positive changes that happened to the similar Livernois redevelopment
• The Alger Theatre is slowly being renovated and if it ever is fully renovated that would be HUGE for the community.
• Strong and motivated Neighborhood organizations
• Mix of younger families and older couples
• Farmer’s market in the summer is great

That’s a pretty stellar review. But this is a very block-by-block neighborhood, so let’s take a closer look.

Housing Stock

The Morningside neighborhood was formed by combining narrow stretches of French ribbon farms in the early 1900’s to create new housing neighborhoods for the fast-growing City of Detroit. Most homes here were therefore built in the early 20th century, are made of brick, and showcase a variety of architectural styles.

It’s something you immediately notice when walking around here, and it’s one of the things that makes it so popular with tenants.

Roughly 63.1% of Morningside residents are owner-occupiers, which is pretty high for Detroit. Homeowners are more likely to take better care of their properties than renters, and that’s also reflected in the area here. You’ll see plenty of well-maintained houses and nicely-trimmed lawns, although often they’re sitting alongside distressed properties (AKA “perfect investment opportunities”).

However, if you’re looking for a fixer-upper here, keep an eye out for:

1. Uneven or corroded cast-iron drainage pipes
2. Asbestos in heating components or ceiling materials
3. Lead paint
4. Weakened or compromised support posts and piers
5. No or poor insulation
6. Aging systems like roofing, plumbing, HVAC, and electrical fixtures

Homes from the 20’s and 30’s in Detroit often have issues like these, so make sure you budget accordingly.

Tenant Stock

After the location and the property itself, the next factor you need to consider when evaluating a rental investment is: Tenants.

So, what kind of tenants can you expect in Morningside?

Here’s a snapshot:

Going on the general rule of “Rent should = 3x monthly salary”, Morningside residents should be capable of paying rent consistently:

• Average Monthly Household Income: $4,185
• Average Monthly Rent: $1,158
• Income = 3.6x Monthly Rent

However, the per capita income is slightly lower here than in the rest of Detroit, and the unemployment rate is slightly higher. So while there are many tenants who are financially secure, there is a broad spectrum of potential applicants.

Translation: Screening is key! (But isn’t it always?)

In summary, Morningside is a Class C area that’s popular with responsible tenants seeking affordable alternatives to EEV and the Grosse Pointes, but this isn’t as much of an economically developed area, so you definitely see that reflected in the tenant pool, as well.

Economic Development

Detroit as a whole is seeing a huge resurgence right now. Billions of dollars of investment is coming in, businesses are moving in, and areas like EEV are experiencing a property price bubble that’s extending to neighboring parts of the city (like Morningside!).

While development has been slower here, there are some notable projects in the works in 2024:

• U-SNAP-BAC’s Farmway

A new proposal would see 5 acres of vacant Morningside land transformed into agricultural plots for local residents to rent as vegetable patches (and even a 2-acre grape farm).

The plan also includes a new walkway and dog walking area to beautify the local neighborhood.

• The Mack Avenue Streetscape Plan Project

The commercial corridor on Mack Avenue from Conner Street to Moross Road is going to be getting a serious facelift, including:

• Updated sidewalks and bus stops
• New public spaces and artwork
• New street lighting

Construction is earmarked to begin in 2025, and is intended to revitalize local businesses with increased foot traffic.

• East Warren / Cadieux Neighborhood Plan

This project covers Morningside, East English Village and Cornerstone Village, and is dedicated to improving:

• Housing
• Local Businesses
• Public Spaces
• …and more

This will bring millions of dollars of public and private investment to the East Warren Ave corridor, and will serve as a springboard for more development.

Crime and Safety

According to Niche.com, most residents give it positive reviews – with the exception of some complaints about how gentrification has driven up house prices.

With that being said, Detroit is a very block-by-block city, so it’s important to select a location carefully when investing here. We recommend doing boots-on-the-ground research (or working with a local agent, like us, who can do it for you) before you buy.

Investment Report Card

Now let’s add all of this up and see how Morningside performs.

We’ve created this standardized Report Card for each neighborhood, so you can understand how we evaluate and determine the overall scores:

In summary, this is a C/C- neighborhood that’s slowly coming back. So there are a lot of opportunities for landlords to buy distressed properties and sit on them to see healthy buy-and-hold returns.

Here’s our overview of exactly which blocks to focus on when investing in Morningside:

Streets to Focus On:

1. Balfour Street, where we saw one property on Zillow for around $110k that needs some minimal work, but would rent for $1,200-$1,500/month once renovated. There are lots of opportunities like this around.
2. Berkshire Street, which is probably one of the nicest streets in Morningside. It’s lined with attractive brick homes, some of which are still vacant. With prices starting at $30k and going up to $230k for fully-renovated units, it’s the perfect chance to add value fast.
3. Altar Road, where you have a lot of new development taking place. New apartments and multifamily units have sprung up all down the street, so this could be a good area to renovate or build new construction.
4. The corner of Waveney and Chatsworth, which has a lot of brick houses, well-kept yards, and inviting sidewalk-lined streets, all set near the elementary school. This would be a great area to find a turnkey or distressed rental property.
5. The corner of Buckingham and Cornwall Streets, a few blocks away, you see some boarded up properties that need $40k or so spent on them to make them liveable, but you also see a lot of homes which residents are already doing up. Once done these would be around $100k in value and would rent for $1,200-$1,500/month.

But you do have to be careful on certain streets in Morningside.

Streets to Avoid:

1. The corner of Waveney and Beaconsfield, where you can see boarded-up, vacant homes with collapsing roofs, etc., and very little else. It’s so sparse here it almost feels like you’re in the countryside.

We want our clients to make money, so we’d advise against areas like these.

This is why it’s so important not to just blindly buy, but to really do your research block by block.

We hope these series help you do that, but we always encourage going to visit for yourself before you buy, to really get a sense of the area.

We’ll just say this before we go: We actually regret not buying more properties in Morningside ourselves. That should tell you all you need to know!

(P.S. No, we did not mean for that to rhyme.)

 

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 Morningside? Contact us for a list of our available units.