How to manage a Detroit property

Question

Hey. I am getting ready to purchase my first property and I am curious of what to expect. What does it take to be a good landlord in Detroit?

Travis Biziorek · Answer

Hey Ayesha, I own 12-doors in Detroit and self-manage from California.

It's pretty easy to be a good landlord. All you have to do is have a nice, well-maintained home, but communicative with your tenant, and address things quickly when they go wrong.

Chris Rich · Answer

If you only have one property and live close, you likely don't need a Property Management company.  But definitely make sure you do a few things.

1) Tenant Screening-  It is absolutely imperative you screen the tenants before accepting any funds or signing a lease.  My company has certain criteria- 3x the rent in gross income, credit score of 600+ preferred, background checks, eviction checks, etc.  Our eviction rate for 2022 was 0.3%.  Conversely, depending on source, self-managing landlords will see an eviction 20-25% of the time, which is likely because only about 65% do thorough checks.

2) Take pictures documenting the property before the tenants move in.  Open all the drawers, cabinets, every wall, etc.  Make sure the pictures are time stamped.  Have them complete a move-in check list.  Do the same inspection upon move out.  This procedure provides great evidence if you need to file a claim against the security deposit.

3) Find a good lease that protects you and the property.  In Florida there are some readily available leases online that you can use, I'd imagine you could find something for Michigan.

4) Have a network of good vendors - This is a tricky one.  In my experience, vendors are 2 out of 3.... Good, cheap, reliable... not all 3.  A good handyman and plumber should cover most of your maintenance issues.

5) Make sure the property is rent ready - Have the property reflect the tenant you seek.  The tenants who are willing to pay top of the market pricing will want a property that reflects that.

6) Have money in reserves--- If mortgaged, I would recommend 3 months of mortgage plus $2-4,000.  This should provide you plenty of money to cover any occupied repairs (outside AC or roof).  This should also be enough to cover any turnover costs as you should be able to turn the unit in 2-3 weeks (if not shorter).  As your portfolio grows, you can adjust your reserve amount if necessary.

Feel free to contact me if you have any questions.  Good luck @Josie Brown!

James Wise · Answer

You've got to run a tight ship man. Those Section 8 tenants are not your friends. They will do everything they can to try to get over on you.

Josie Brown · Answer

Hi Ayesha! A property manager can guide you in regards to what needs to be done to make your property a successful rental if you are interested in working with one. Here are a few tips to answer your question:

1. Make sure that you get the property registered as a rental with the city.

2. Screen applicants properly.

3. Complete maintenance requests in a timely manner once a tenant has moved in.

Feel free to reach out to me directly if you have any other questions!

Michael Smythe · Answer

Depends on the property/tenant Class.

Most investors make the mistake of assuming it's all the same.

So, what cities or Detroit Neighborhoods will you be targeting?

Leroy K. Williams · Answer

Hi Ayesha,

The answer depends on the property type you purchase and where it is located.  If it's in the core neighborhoods of Detroit being a good landlord means first providing a fully functional, clean and respectable place for someone to live in.  Many investors buy in low income areas and expect people to be okay with slum level living spaces. This may work in other places but in Detroit its never going to work since tenants have so many available housing options. If you renovate to a standard of nice and functional you will attract a decent tenant.  For inner city single family dwellings I recommend Section 8.

Bob Stevens · Answer

Hire a PM co, and stay out of their way. DO NOT try to go it alone, it will not end well,

All the best

Ran Fridman · Answer

Hello, my friend, congratulations on purchasing your first property. Here are some tips to be a good landlord for you:

1. Understand the basic rules for landlords and tenants in Detroit.

2. Screen tenants well by checking their history, income, and references.

3. Make a straightforward rental agreement covering rent, rules, and responsibilities.

4. Regularly fix things, check the property, and make upgrades as needed.

5. Communicate with tenants openly and solve problems quickly.

6. Clearly state when rent is due and consider online payments.

7. Keep up with local rent trends and property values.

8. Have a plan for urgent issues and share emergency contacts with tenants.

9. Make sure your property meets safety standards and stay updated on local laws.

10. Know local pros like contractors or property managers who can help.

I hope that will help you, anyway, if you have any questions feel free to reach me. Good luck 😊

Wendy Patton · Answer

@Ayesha N Everett i have a few contacts if you want to reach out - i would highly recommend you have someone trustworthy - also i have some contractors that might be able to help -

Michael Smythe · Answer

@Ayesha N Everett that'll be mostly Class B as long as you aggressively screen applicants.

Also, make you get your Certificate of Compliance from the city as the 36th District Court is getting testy with landlords that don't have it and appear for evictions.

Most of the houses in that area were built prior to WWII, many prior to WWI, so get a great inspection, including the sewerline and have a budget for updates.

If you buy "turnkey" you'll want even a better inspector since a lot of renovation work is done in the City of Detroit w/o permits. Which increases the chances the work wasn't done well:(

Any rent advertisement you run must have the Detroit City required disclaimer in it.

How to manage a Detroit property

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