Metro Detroit Cities Deep Dives: Lincoln Park
Source: Crain’s Detroit Business
Are you looking to invest in rental property? Well, Metro Detroit has a lot to offer! But some cities aren’t as conducive for real estate investments as others—and you need to know which places are worth your time.
The metropolitan area of Detroit is large and sprawling with many different neighborhoods and cities—each with its unique personality and real estate market factors. There are different tenant demographics, property management requirements, general property conditions, and, of course, returns on investment.
Even real estate moguls need insider guidance when it comes to investing in Metro Detroit!
So, using our decades of experience as a property management company and local residents in Metro Detroit, we’ve developed these in-depth guides to unpack each city’s rental market scene for you. With these articles, you can sift through your options and find the best investment opportunities that work for you.
Our featured city for this installment is Lincoln Park, Michigan—a mid-sized community where locals have excellent school systems, parks, recreational facilities, a well-regulated city government, its own museum of local history, and a moderate tax base.
Lincoln Park
Located in Wayne County, Michigan, the city of Lincoln Park has a population of 38,144 in an area of 5.85 square miles (15.15 km2), resulting in a population density of 6,476.1 per square mile. Making it considerably higher when compared to the other municipalities in the state.
Given that Lincoln Park sits right below the City of Detroit, it’s called a “Ring City” in our terms. We give this name to the cities that border the City of Detroit in a semicircle, providing a good investment balance of property affordability and reduced risks—those commonly associated with Detroit investing.
Lincoln Park is part of the Downriver communities in Metro Detroit, as you can see in the map below:
Map showing Tri-County Metro Detroit Cities. Source: Georgetown Public Policy Review
We’ve also listed these cities out for your reference if you want to know more about the areas surrounding Lincoln Park. Any names highlighted in green are other Ring Cities, and you can follow those with links to other Deep Dives we’ve previously published.
Macomb County
Oakland County
Wayne County
Center Line
Auburn Hills
Allen Park
Clinton Township
Berkley
Beverly Hills
Dearborn Heights
Fraser
Bingham Farms
Detroit
Harrison Township
Birmingham
Ecorse
Macomb
Bloomfield Hills
Garden City
Mt Clemens
Bloomfield Township
Grosse Pointe
Roseville
Clarkston
Grosse Pointe Farms
Clawson
Grosse Pointe Park
Sterling Heights
Commerce Township
Grosse Pointe Shores
Utica
Farmington
Grosse Pointe Woods
Shelby
Farmington Hills
Ferndale
Franklin
Highland Park
Inkster
Huntington Woods
Lincoln Park
Pleasant Ridge
Livonia
Keego Harbor
Melvindale
Lathrup Village
Northville
Plymouth
Novi
River Rouge
Orchard Lake / Oakland Township
Southgate
Pleasant Ridge
Taylor
Pontiac
Westland
Rochester
Wyandotte
Royal Oak
Sylvan Lake
Troy
Walled Lake
Waterford
West Bloomfield
The Bedroom Community of Lincoln Park
The City of Lincoln Park used to be part of the now-defunct Ecorse Township, but it was incorporated as a village in 1921 and as a city in 1925. Since the 20th century, the city has developed into a “bedroom community” or “commuter town,” providing homes for workers in the nearby automobile plants and steel mills in the greater Detroit area, but without any prominent industries of its own.
Today, Lincoln Park is a medium-sized city and is the 37th largest community in Michigan. Around 35.56% of its workforce is blue-collar workers, higher than the nation’s average of just 27.7%. Many of them are office workers, manufacturing and production workers, and service providers who fill roles in the foodservice industry.
According to a current resident on Niche, “The city is very nice. It is a good location and has many stores, restaurants, and near entertainment such as the movies. You can find nice homes in the area for good prices as well, so very affordable for first-time homebuyers. We love living here.”
In terms of development, Lincoln Park’s Downtown Development Authority and Economic Development Corporation (EDC) are actively assisting local industries. These projects are helping to revitalize the economy, providing means for industrial and commercial enterprises (e.g., locating, purchasing, constructing, and expanding in the city), and welcoming new businesses to boost the city’s growth and population.
Both businesses and homeowners are attracted to Lincoln Park, as it’s just a stone’s throw away from the City of Detroit. But is Lincoln Park a good real estate market to invest in rental properties?
Let’s take a look.
Rent & Rent-To-Price Ratio (The 1% Rule)
According to Niche, the average rent in Lincoln Park is $842 per month. Breaking this down into specific bedroom sizes, the rent amounts are generally lower than the rest of Metro Detroit and the nation, but roughly the same as most of Michigan:
Now, if we compare this data to the actual listings on Zillow, we see that the rent averages provided by Bestplaces are a tad lower than the current reality. This is great news for investors because it means you can potentially charge higher rent amounts:
d the nation, but roughly the same as most of Michigan:
Source: Bestplaces
Now, if we compare this data to the actual listings on Zillow, we see that the rent averages provided by Bestplaces are a tad lower than the current reality. This is great news for investors, because it means you can potentially charge higher rent amounts:
Source: Listings on Zillow as of January 2022
We can also see that there aren’t many studio units or homes larger than three-bedroom homes. Instead, most of the homes for rent in Lincoln Park range from one-bedroom to three-bedroom properties.
So, let’s use a simple calculation called rent-to-price ratio to check if these rent amounts will translate to strong cash flow. Know that the industry standard is to have the rent amount be at least 1% of the total property price in order to generate substantial returns.
We’ve chosen this listing (see below) of a three-bedroom single-family residence in Lincoln Park. With an estimated rent of $1,234 and a property price of $79,900, the ratio results in 1.5%. This goes beyond the industry’s minimum and lands at the higher end of the average ratio for Ring Cities in Metro Detroit.
Source: Listing on Zillow as of January 2022
In other words, you can be confident in finding opportunities in Lincoln Park to generate a strong cash flow.
House Value and Appreciation
Based on Niche’s data, the average house value in Lincoln Park is $73,700. According to Zillow’s reports, however, the overall home value in the city is closer to $122,000 and has been steadily climbing over the years. The growth may continue to skyrocket in the years to come:
Source: Zillow
We can also see further proof of the uptrend of Lincoln Park property values from Redfin, where it shows that the median sales price is $127,500 and has been increasing by 17.3% year-over-year.
While the homes sold have declined by 12.1% year-over-year, it doesn’t discount the fact that Lincoln Park is a “very competitive” market based on Redfin’s Compete Score, where homes get multiple offers and can sell for up to 3% above list price.
Now, according to NeighborhoodScout, single-family homes are the most popular type in Lincoln Park by far (83.3%), with apartment complexes coming in next (9.8%), and the others sharing the remaining percentage. In terms of size, more than half of all Lincoln Park homes have 3 bedrooms (57.4%) and 2 bedrooms (25.7%), and only a few have 1 bedroom (9.1%) and 4 bedrooms (6.2%).
Going back to the actual listings on Zillow, we see a good selection of two-bedroom, three-bedroom, and four-bedroom homes in Lincoln Park. Prices range from $85,000 to $155,00—depending on the location and size of the home you choose. So, we can clearly see that affordable options are widely available:
Source: Listings on Zillow as of January 2022
These property prices are also reflective of the affordable housing market of the City of Detroit—one that sits right above Lincoln Park. As mentioned earlier, Ring Cities like Lincoln Park are where you’ll find the famous “cheap properties” without most of the risks associated with Detroit investing.
Regarding property appreciation, NeighborhoodScout reports that Lincoln Park real estate appreciated 126.85% over the past decade. That translates to an average annual rate of 8.54%—one of the top 10% in appreciation rates in the nation.
Even with the nationwide downturn in the housing market, Lincoln Park properties appreciated at 15.18% in the last 12 months—higher than the appreciation rates of 73.93% of cities and towns in the United States. Any real estate investor would be impressed by this accomplishment, with Lincoln Park having a proven track record to reap significant equity gains.
NeighborhoodScout has also provided a heat map that shows where you can take advantage of Lincoln Park’s spectacular appreciation rates:
Quality of Tenants, Properties, and Living
With all the factors that contribute to the financial viability of investing in Lincoln Park, let’s now dive into the quality of tenants, properties, and lifestyle in the city. These are just as important as the numbers we’ve discussed so far, as they dictate the type of tenants you’ll manage, the property conditions you’ll deal with, and the level of attraction your rental will have.
All the information you see below comes from a combination of research and our personal experience as a property management company and local residents in Metro Detroit.
Average Property Class and Condition: B-
Average property age: 63 years
According to Bestplaces, nearly half (41.3%) of all the properties in Lincoln Park were built from 1950 to 1959, resulting in an average property age of 63 years. In the real estate industry, homes that are more than 50 years of age are already considered “old,” which means you’ll likely find older homes in Lincoln Park.
Source: Bestplaces
Nevertheless, being old doesn’t automatically make a home terrible for investment. It only means that you’ll have to deal with higher maintenance demands and major renovations to bring a home up to rental standards. Plus, given that Lincoln Park is a developing city, you’ll also come across well-maintained and newly-refurbished properties in the area.
All it takes is thorough research of the housing market and keen attention to detail when inspecting older homes to succeed here. Be careful in your budgeting and analysis before purchasing any property in Lincoln Park, and you’ll surely find a good investment opportunity to take advantage of the city.
Quality of Life in the Neighborhood: A-
Next, let’s check the quality of life in Lincoln Park. After all, only good locations attract the high-quality renters you’ll want to have as tenants—responsible for paying rent and taking care of the home, maximizing the impact of your investment return.
By prioritizing desirable neighborhoods, you’ll avoid having tenants who are a pain to manage. Nobody wants to chase up tenants for overdue rent or spend a fortune on repairing what they damaged.
Let’s see if Lincoln Park tenants meet the requirements for a thriving rental property business.
Local Economy
The local economy is one of the key contributing factors to a neighborhood’s livability, as it determines the local income, employment stability, and overall development and growth of the city.
Fortunately, Lincoln Park does not fall short on this defining factor.
According to Wayne County’s website, “In a little under 6 square miles, Lincoln Park offers affordable housing in safe, walkable neighborhoods, a moderate tax base, great school system, and local museum.”
“Its city government provides an excellent quality of life for residents and economic development staff ensure smooth review and permitting process for incoming businesses,” which is excellent news for investors.
There is also the Lincoln Park Chamber of Commerce—a non-profit organization that provides business leadership and boosts the economic growth and development of the city. They help new businesses with networking opportunities, membership perks, necessary resources, marketing opportunities, and community engagement, further solidifying the future of Lincoln Park.
School Rankings
According to Greatschools, the top public schools in Lincoln Park are Hoover School, Max Paun School, Keppen School, Lincoln Park Middle School, and Lincoln Park High School.
The quality of these schools will help you attract tenants with families, especially if you focus on the best areas indicated by NeighborhoodScout’s heat map below:
Source: NeighborhoodScout
Crime and Safety
Unlike the City of Detroit, Lincoln Park is considerably safer than a couple of areas around it. It may not be the safest city in Michigan, but it’s far from dangerous. This will likely attract tenants seeking a good neighborhood to live in—keeping your asset safe from crimes.
Crimegrade gives us a heat map that shows the safest and most dangerous areas in Lincoln Park so you know where you should prioritize purchasing a home:
Source: Crimegrade
Still, safety in Metro Detroit can vary from one block to another. So it’s best to get information from the neighbors and evaluate the crime rate on the exact street where you’ll invest in. Pay an enormous amount of attention and research to ensure that you’re investing in an area that’s safe for you and your tenants.
Livability
Based on Areavibes’ evaluation, Lincoln Park is an “excellent” place to live in, with an impressive livability score of 73/100. This comes as no surprise because Lincoln Park has great amenities, low cost of living, and affordable housing—garnering good public user ratings as well.
Here’s a breakdown provided by Bestplaces to help you visualize the livability of Lincoln Park:
Source: Bestplaces
Tenant Class and Demographics: B
Last but certainly not least, let’s evaluate the potential tenant pool you’ll have in Lincoln Park. If you’re a smart property investor, you’ll want to ensure that the demographics support your goal of conducting a successful rental business—one that will have responsible and capable tenants.
So, here are the factors that contribute the most to your investment the most:
Income: The average income of locals in Lincoln Park is significantly lower than the greater areas of Metro Detroit, Michigan, and the United States. This isn’t ideal for investors, as it means you can’t charge rent that’s too high.
Source: Bestplaces
Unemployment: The unemployment rate in Lincoln Park is roughly the same as most of Metro Detroit and Michigan, and significantly lower than the nation’s average.
But, more importantly, the potential future job growth in the city means your tenant pool will increasingly get better-paying jobs and afford better homes to rent.
Source: Bestplaces
Education: While only a small percentage of the residents in Lincoln Park have higher education, a good portion of them have graduated high school and attended college. This means your tenant pool has no problems securing good-paying jobs.
Source: Bestplaces
Diversity: See breakdown from Niche below for the racial diversity in Lincoln Park:
Source: Niche
Based on the average income, unemployment rate, and educational attainment, you will likely need to conduct thorough tenant screening diligently to ensure that you only accept quality tenants who earn higher incomes and have stable jobs.
You might run into tenants that’ll require a higher level of management, which means you can also opt to hire a property management company to receive payments, maintain your assets, and ensure that the tenants comply with the lease agreements.
Source: Google Maps
Overall Score: B
We’ve given Lincoln Park a score of B for rental property investment. While the tenant pool and older housing stock might require hands-on management, the following reasons are strong enough to make Lincoln Park a great place to get your feet wet in the Metro Detroit market and invest in rental properties:
1. Lincoln Park’s rent-to-price ratio comes in at 1.5%, which means it has the potential to generate strong cash flow that can easily pay off the acquisition cost you’ll initially shell out.
2. Lincoln Park’s house value and appreciation rates are going nowhere but up, with most of its properties currently affordable and able to garner equity gains for long-term returns.
3. Lincoln Park’s economy, schools, safety, and livability are off the charts—which means you’ll attract quality tenants looking for a place to live.
It goes without saying that Lincoln Park offers excellent opportunities for you to expand your rental portfolio. So much so, that you might want to invest in more than just one property. Of course, maintaining multiple homes on your own is a lot of work—but if you seek the professional help of property management companies, it can be easy.
With our in-depth, local knowledge of the area and its tenants, our team has the expertise and experience to direct you towards good properties. We’ve also got plenty of experience helping you manage all the tenants you’ll have in your properties. Sit back, relax, and enjoy watching your investments grow from the up-and-coming Lincoln Park, Michigan with the help of expert property managers.
Get in touch with us today, and let’s get started on your journey into Metro Detroit!
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Are you interested in other areas besides Lincoln Park? Well, then, today is your lucky day.
This article is part of our ongoing series that dives into all the cities and neighborhoods in Metro Detroit, so check out the other installments we’ve already published or comment below for any requests.
We’re not stopping until we’ve covered them all!
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