How Vacant Is Detroit?
Reprinted from http://blog.mylandlordinsurance.com.
There are a lot of investors looking at Detroit as a great place to buy cheap real estate. The thinking is if you can purchase a home with renovations included for $35,000, you can quickly turn a profit. Most homes in Detroit are brick, beautiful, 2 stories, and usually over 2,000 sqft. As a section 8 property the going rental rate is between $1000-$1400 a month. That is roughly $12,000 a year. In three short years the property would be paid and any future rental income would be 100% profit with the property having a resale value of about 50,000 if rented with a good tenant. Sounds great.
There's few problems with this plan:
(Summarized)
Insurance and Taxes
27% of homes are vacant
Lack of employment opportunities
Solution:
Rebuild City from Center. Consolidate public resources and reduce supply by demolishing vacant homes.
To get a more detailed description please read our blog. http://blog.mylandlordinsurance.com
Comments (2)
Donald, thanks for posting the postive and exciting opportunities in the Detroit area. It's pretty wild to think there is a community that investors can earn 25% returns year over year, but its true here!
Kevin Kaczmarek, almost 16 years ago
Donald, I think you bring up some valid issues. In my personal experience with owning a land contract partnership note in Detroit has been quite profitable. I have not run into any issues of a vacated property because the homeowners are invested in the property with a sizable down payment. I believe Detroit is profitable with due diligence while also giving back to the community. Interesting post Donald!
Account Closed, almost 16 years ago