This may have been discussed before, but if not I thought I'd bring this up to you investors who keep asking about buying properties in Detroit.
As a Landlord in the City of Detroit (now retired) who owned 40 properties there, I can tell you that it's not a place to invest, UNLESS it is on the Water Front! (And there are some areas that are ok, but for how long?) However, if I were you, I'd buy all those all broken down house, just for the land. Land is always profitable! I have several friends who have done this. But they don't need a return on their investment at the present. They can afford to wait.
You can buy properties in Detroit for a dollar, and those that sell for over a dollar are really very cheap. Buy the property, tear down the house and keep the land. Detroit won't always be down trodden. And land will always appreciate. Detroit will some day come back. The water front is already a great place. We just need to do something about the inner city parts.
The only problem is that Detroit has the highest property taxes in the entire United States, I'm told. We paid over $36,000.00 a year during my landing career there. Averaging out to about $3,000 per property. Apartments entailed $4,000.00 and each unit was taxed. Duplexes, another $1,000 more than our single family homes. Plus you would have to keep the lawn well groomed according to City Ordinances so you wouldn't get tickets, etc.
But, it's a thought. Just be careful when you go there to do your drive by's. I have many stories I could tell you but it's already been said and done many times before.
If I were to invest again in Detroit, I would purchase the land. But, alas, I am growing old and the old bones just can't keep up with you young whipper snappers. Plus health issues with hubby, so my time has passed, but not yours!
Good luck to you on your adventures.
How long have you been investing in Detroit, Nancy? Did you see the total decline of the city from Glory days to the present? Thoughts on what caused it, besides Democrats & unions?
We invested in Detroit in the 1980's. It was a time that Detroit Properties were selling pretty cheap, just as it is today. Investors were buying right and left and my husband was buying one property after another. But, Detroit was still a decent city. Neighborhoods well groomed, safe, and we did pretty well as landlords.
In 2001 I began to see a change. More gang violence, thefts, more people moving out to the burbs and the tenant pool getting pretty sketchy. By 2004 when housing was being offered to anyone who could breathe, we found ourselves with 6 vacancies at a time, but we still were okay, we just had to work harder to keep them filled.
By 2008 the city was getting more dangerous, break ins now, drive by shooting every day, little children being killed while watching cartoons in their homes, and we were now facing 18 vacancies a year. By this time you couldn't have a vacancy without thieves breaking in and stealing your furnaces, hot water heaters, copper plumbing, siding off the houses etc.
We had a work crew that took care of repairs, but soon their vehicles were stolen, their tools as well, and our plumber was beaten and killed. We no longer could hire anyone who would work for us in Detroit, and my husband and I were growing older and couldn't work on the houses as much as we could before.
By 2009 we were done! We sold our properties and were going to invest elsewhere, but our houses that once would have sold for over $100,000 each to $300,000 for our apartments, sold for $5,000 a piece. We ended up selling it to an investor in Australia, who didn't have a clue how to manage properties in Detroit and therefore, our once nice homes are now destroyed, burned down, abandoned, and an eye sore.
I had a lot of good tenants, and even though I was faced with a ton of vacancies, I was happy for them that they had found a safe place out of Detroit. Nobody deserves to live with security bars on every window and door and be afraid of being killed in their homes while relaxing. Or be afraid to have their children play outside to only be killed by a stray bullet from a disgruntled neighborhood fighting with someone else on the block.
Sad story, but true!
@Nancy Neville I appreciate you for sharing your story. I had lunch last week with one of our workers. Somehow we got talking about Detroit. He grew up there and now lives here in Vancouver. This summer he went back to visit family who live outside the city and his girlfriend wanted to see the "worst areas of town" because she just couldn't believe his stories that it could be that bad. He said no, it's too dangerous, but she insisted. He took her to just the edges of the worst parts of the city and she was shocked by what she saw and it scared her back to her senses.
I went up to East Lansing to go to a football game earlier this month with a friend of mine that grew up in the Detroit suburbs. Before the game on Saturday night he took me on a driving tour of downtown Detroit. I've read about Detroit, but was really surprised at how bad it really is. Even near the new stadiums down town there are abandoned/vacant buildings a couple blocks away. The place is unbelievable. I would not go anywhere near this market. Detroit has been in decline since the 70's or earlier so I don't see how it will turn around within my life time.
Not only did a landlord have to face the crime and the theft within the Inner City, but the courts were horrible. At least 300 evictions done daily. The line was astronomical. It was a Zoo, and the City charged you an arm and a leg for any type of ordinance violations that they could possible think of, such as a $3,200.00 fine if your grass in the alley was over 1 1/2 " high. Am I exaggerating? Nope, had to go to court over just that thing. fought it and I won. But what a joke.
I have written several articles on my life as an Inner City landlord on my blogs.
I'm glad that others have driven by to see for themselves that my stories are not blown out of proportion. I lived it. I breathed it. I handled my own cases, and never lost a case during the 13 years I was a landlord there. I know every trick of the trade. Every excuse that a tenant can make. I've been attacked, and dealt with some pretty tough dudes. But even the unsinkable Nancy Neville, had to cry uncle!
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