First time making rental in Warren, Michigan. Any advice?

Question

Hey guys,

I live in Warren, Michigan. I am looking to make my home a rental within the next year. I wanted to reach out to see if anyone had any advice, strategies, etc. on my first-time rental in Michigan. I know of some strategies such as Section 8, Corporate housing, etc. Was hoping for some feedback.

Thank you!

Michael Smythe · Answer

@Danny Van you can also attend Oakland REIA and MREI, both held monthly in Troy.

Regarding what to do, first you'll need to call the City and get their rental application to fill out, pay the fee, submit and schedule the inspection.

It's mostly a health & safety inspection: smoke detectors, a CO detector near furnace, handrails, GFCI's. etc.

WARNING: Warren doesn't really like landlords, so they can be picky about previous work done without permits - even if it was done before you bought the property! They can red tag it and require all 5 inspections to get a Certificate of Occupancy.  We're handling two of these for owners right now, one just passed final inspection, the other they came up with their 3rd set of repairs:(

If your home is north of 10 Mile, your rent should be too high to qualify for S8. South of 10 Mile, it depends on several other factors. FYI: if you've lived in the home you probably do NOT want a S8 tenant as they tend to be harder on properties than cash tenants (our opinion).

Corporate housing would be Mid-Term Rental (MTR) and you'd need to furnish the home. Can be more profitable than LTR if you can streamline the MTR & STR process.

PM us with any other questions:)

Sarah Kensinger · Answer

Depends on what type of rental you're looking to do. Corporate housing is more Mid-term rental, section 8 is a long-term rental, and Airbnb is a Short-term rental. So, it all depends on what you're thinking is a good fit for the area and for you.

Travis Biziorek · Answer

Danny, my best advice is to hit the Renegade Detroit Investors meetup. I believe it's monthly, and they held it last night. Lots of great folks there in all stages of their investing that would be able to give you some great local advice.

Michael Smythe · Answer

@Danny Van change the name of what?

Danny Van · Answer

Thank you for your response Michael!

In regard to the mortgage, so nothing will change when it comes to the mortgage when I notify them it will be a rental? They just change the name of it and require 12 months of occupancy?

Michael Smythe · Answer

@Danny Van1) No state requirements

2) Most mortgages only require borrower to owner-occupy property for first 12 months of loan. No restrictions after that.

3) Depends on insurer. Some add landlord rider, MOST do different policy. You also NEED to ask if your policy will remain in effect if property vacant for more than 30 days.

Owen Rosen · Answer

You'll only have one type of insurance on the property at a time.  While owner occupied and then once it's tenant occupied.

Danny Van · Answer

Hi Michael,

Thank you for your response!

1. Would I also have to get it registered/ licensed through the state too or just the city application like you were stating?

2. Would I need to contact my mortgage lender to let them know it will be an investment property?

3. Would I need both homeowners' insurance and Landlord insurance or just the landlord?

Dave Skow · Answer

@Danny Van- thanks  1) if you have some equity in the property - you might consider getting a HELOC in place now  in case you  want to use any  equity in the future ...Its  easier to get a heloc in place on a primary home as compared to a rental  2) contact your insurance agent and  ask for an  estimate for how the insurance coverage and premium will  change  3) consider  a proeprty management firm if you dont want to  self  manage  4)  get any forms and  processes  in place  (  leases / credit checks / bank accounts/  etc ....)

Danny Van · Answer

Hi Sarah,

Thank you for you response!

I am looking to do short and/or mid-term rentals. I was looking at Air BnB but I am not sure if my property would be profitable. However, I am north of a major freeway, so easy access to different areas in metro Detroit. I am also 5 minutes away from the automotive company GM Headquarters and 5 minutes away from a major hospital. Also, 20 minutes away from Downtown Detroit.

First time making rental in Warren, Michigan. Any advice?

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