I came to Detroit in 2013 invited by a friend, initially thought he was crazy when he talked about investing in the city, but I decided to come with him to "check it out". I must say that I felt in love with the architecture of the houses and of course, I wanted to make money and why not help bring back these wonderful properties to its grandeur, I too wanted to be part of the Detroit come back story. I bought a couple of properties and made ok money being out of state (Mind you, I don't know much about investing in real estate.) Then I really wanted to be here full time here, to manage a 4 unit that I used to own so I moved here.
Property prices were very low, attracting investors from all over the globe and helped the city get over its dark bankrupt days. But then prices skyrocketed and Detroit got greedy. Now it's targeting landlords requiring yearly rental inspections (Most cities requires it every 2-3 years) and most shocking.... yearly lead paint inspections which is very costly. $300-400 initial and $150-300 every time the inspector has to return if your property don't pass lead paint inspection in which 99.99% it wont, no matter how perfect you paint and rehab the property, if it is built before 70's, add greedy corrupted inspectors and boom, a recipe for a very costly lead inspection. Landlords usually don't make a lot of money on rentals here and adding that cost to an already high property taxes and one of the most high property insurance in the county you are left with almost nothing. I am very much in favor of inspections (yearly? not so much) and believe its important to fight blight and keep slumlords from being slumlords. Unfortunately It is all political.
Most investors I know are fleeing fast and soon will be a flood of properties in the market and God knows what will happen. I am really disappointed to see that the city of Detroit is targeting those who helped it come back to spotlight.
I know people don't like to mix business with politics, but politics really shape the business environment. I never bought the headline on the articles saying Detroit is making a comeback. No, Detroit is not coming back. Maybe Oakland county is coming back. You really have to live in the city and understand how the average person thinks to really understand Detroit. First they see people with money as evil unless you made it selling drugs, then you're a legend. Don't think they like landlords, they see landlords as stealing their money. So don't expect the people to be on your side when the city shakes you down. You're really just paying the city and paying for their pensions. You're not getting any services. Crime is through the roof, you better call a friend because that ambulance ain't coming, and you better have a gun because the police aren't going to protect you.
At least you are realizing that you're getting screwed. I know so many people who own small stores in Detroit, and they get so many fines. I never understood why they still do business in Detroit when they get treated like trash. Just get out, America is a big country there are many other opportunities. Westlan, Garden City and other cites are really good for renting. You might want to consider those cities.
Thanks for your insights Ali, this process has been very frustrated. I am thankful that I moved here and learned a lot about historic homes and how they work, Ive met wonderful people here from big investors trying to make money to people who just came because they wanted to be part of the rebirth, not to mention the locals. But like I said its all politics, lets move on