Taxes are Ridiculously High
Property taxes are absolutely ridiculous in Detroit.
Bad City Services
It wouldn’t be so bad if there were decent city services, but the city services are extremely sub-par, and just don’t warrant the high property taxes.
A few years ago, someone broke into one of my rental properties and stole my hot water tank and furnace.
So I called the police department, and guess what they told me; to get in my car, and drive to the nearest precinct to file a police report!
I couldn’t believe it. I was furious.
Matter of fact, just yesterday I was reading an article where Bill Nowling, a spokesman for Kevin Orr, Detroit’s Emergency Financial Manager, was interviewed.
He spoke about the concern he has that the tax assessment process in Detroit isn’t working right, and said that a lot of people think the properties in Detroit residents have been falling victim to inaccurate property assessments for years now.
Foreclosure Number Reduced
I’m not completely down on Detroit. There are definitely some positives.
One of them is the consistent decline in the number of foreclosures.
There were so many foreclosures in Detroit at one point that appraisers were forced to include foreclosure sales in the comps for homes that were to be sold to retail buyers to live in.
According to Clear Capital, the REO saturation in the city is still high, but has reduced to 31.7%, which is an improvement.
This is good news for investors in the city, because it means that you’re going to be able to get better comps and higher values.
You can’t deny that the low prices are attractive in the city.
And low prices mean that you can make some awesome cash-on-cash returns on rental properties.
Prices are On the Incline
Even though the prices are still relatively low in the city, they’re gradually creeping back up.
In fact, The National Association of REALTORS recently named Detroit a “Top Turnaround Town” for residential real estate, due to a 37.8% year-over-year increase in list prices, which is largely due to reduced inventory.