are you an out of state or out of country investor
The low low low asking prices of real estate in Detroit are well-known. Plus, TIME magazine is focusing on the city as part of a year-long study, so more investors are becoming aware of the city as a long-term investment possibility.
Russ has some valuable advice for them in his post:
and have a few thousand bucks to invest. But is Detroit the place to invest your money? Sure you may have never heard of such low home prices. Yes homes in your country or state may be much higher. In fact they may be hundred of thousands of dollars higher. But just because a home is $500 or $1000 or $10,000 doesn't mean it is a bargain.
- What will be your return on investment?
- what will be your downside?
- what will it cost to bring up to code or to saleable condition?
- what is Detroit and rental market like?
- what will it take for your investment to be worth more money?
- what are local professional investors doing in the City of Detroit.
I myself would not buy investment homes in the City of Detroit. I would put my families or friend's money there either. I don't know of any investors that have done well in the City of Detroit. In the suburbs yes, but not in the city.
I have to be a little more specific why not to buy in Detroit
- poor school system in the city of Detroit. Nobody will want to move to Detroit from the suburbs because the school system is so bad and unsafe for their kids.
- High crime statistics
- High home and car insurance rates
- Poor city services in my opinion
- high property taxes - they could be as high as $3000 for that $500 property - hard to get the high property taxes reduced.
- Detroit is unfriendly for investors and property managers - hard to evict and landlord is responsible for people leaving cars or dumping garbage or leaving personal property to be removed. have to board up the house when vacant.
- when home is vacant very likely the furnace, the copper plumbing, and the hot water heater will be stolen. Anything valuable has a chance of "walking" how will an out of town investor know when the tenant is gone?
- too many great investment homes in the suburbs which will give a better return on investment. Sure not $500 but you'll still have a home intact when it is vacant
My advice buy in a city that the homes will increase in value quicker. Call me if you want to know what makes a good investment home.
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