Because of all the mistakes I’ve made in the real estate game, I thought I’d touch on a topic that’s really near and dear to me, and that’s knowing what things to check before you go buying a house in Detroit.
Now let’s be honest; there’s a ton of things you want to check when you’re buying a house, so it’s impossible for me to cover everything.
I was inspired to talk about this after talking with a guy on the West Coast that wants to invest here in Detroit in single family properties.
He was really excited about the ridiculously low prices he can buy homes for here. I understood his excitement, but there were a few things that I had to explain to him.
Yes, the low prices can get your mouth watering, but you’d better know what you’re doing.
Today I’m going to share with you a few of the things I talked to him about.
Know the Neighborhoods!
If you don’t live in the Metro Detroit area, you need somebody local that really knows the neighborhoods.
Don’t be fooled into thinking a house is in a good neighborhood just because the street that a house is on might be “nice.” In Detroit, a house may be on a street
where there is a decent level of “pride of ownership” amongst the people on that street block, but just one street over can be the “danger zone.”
That means that you’re only a block away from “riff-raff” that can come and vandalize your property.
So be sure to take into account the condition and environments of the immediate areas surrounding a property you’re interested in.
This is really important if you’re going to be renting the property, because you’re going to need to secure the property when it’s unoccupied, and in-between renters.
From experience, I can tell you that, depending on the area, if your property is vacant (especially if it’s easy to see that it’s vacant), people will break in and go shopping for appliances, pipes, hot water tanks, and furnaces in your lovely home if it’s not secured properly.
Now on the other hand, securing properties in these kind of environments can be a catch-22. Why? Think about it… if it’s easy to see that it’s secured (boarded up, etc.), potential vandals can look at the house and know it’s unoccupied…
Don’t Be Fooled By the Low Prices.
Look — If a property is really, really cheap, it’s cheap for a reason. Even if the description of the house states that the property doesn’t need a lot of repairs, make sure you know about the area, because it could be in an area where it’s next to impossible to find a renter that will treat your property with respect.
There’s a ton of houses available in the city right now, which means that it’s a renter’s market. Renters have a TON of options in the Detroit market today, so you want to make sure that the area that the property is in is one where decent renters would be willing to live in.
Strongly Consider Hiring a Property Manager
Obviously this only applies if you’re going to be investing, and not looking for a house to live in.
If you’re crunching numbers on a Detroit property that you’re thinking about buying, and you live out of town, make sure you factor in the fees you’re going to have to pay a property manager to manage the property for you.
But you don’t want just any property manager, you need someone who’s reliable, understands the Detroit market, and has a sense of urgency and attention to detail when it comes to taking care of the property, and finding qualified tenants.
There’s a ton of properties available for rent throughout Metro Detroit, so you need someone who’s going to know how to make your property stand out amongst the rest.
On top of that, they need to have the experience to know the neighborhoods, and have the sense of urgency to help you secure your property the split second it goes unoccupied.
As a proponent of investing in Detroit, please understand that I’m not trying to deter you from investing in properties in Detroit; all I’m saying is be smart, otherwise you are in for some serious headaches.
Best of luck.