What are your thoughts on this $20,000 rental in Detroit?

Question

http://www.trulia.com/property/3084334009-PALMER-GROVE-PARK-SUB-PLATS-9935-Grandville-Ave-Detroit-MI-48228

Tanya Jackson-Brown · Answer

@Mike Purvis

I was born & raised in Detroit I relocated 9yrs. ago to South Carolina I will admit that some of Detroit is rough but you have to go and take a look for yourself at the house & the area & check with neighbors and also check with Section 8. You have some really decent families that are looking for good homes to rent. Please don't judge a book by its cover & please check it out for yourself before you take others word on what it is.

Always A Blessing,

Tanya

Ray Foley · Answer

@Tanya Jackson-Brown Is exactly right.

As someone who does invest and own properties in the city this is the right kind of analysis. Like low income areas in most of big cities neighborhoods do change drastically from block to block in Detroit. Anyone who doesn't understand this should stop commenting like they actually have any understanding of the Detroit market.

As to your specific inquiry, this house it is in an area of Detroit I am not particularly familiar with so I can't speak directly to it's merits. What I can do is advise that if you are serious about investing in the city that you find someone here to start locating properties and managing them for you.  This is not a town where hands-off landlords can survive. Fee free to PM me if you have any further inquiries about the city. If you are serious about investing in Detroit I would be happy to point you in the direction of some people who can help you get started right.

Andrew Davis · Answer

All I know about Detroit I learned from @Joshua Dorkin !

@Mike Purvis I know nothing about the Detroit market, however, I would be cautious on this for no other reason than this:

That's a whole lot of rentals in a pretty small area.  Be ready to factor in plenty for vacancies or be ready to drop your price significantly.  "Tenant Occupied" is definitely appealing when evaluating a buy & hold, but since you are already distance investing, I would strongly consider checking out other markets.

Thanks for asking the question, and feel free to reach out anytime!

Joseph Ball · Answer

That sounds so good, I might just move up there. I'm sorta tired of sunshine and oranges and alligators and old men.

Scott K. · Answer

Come for a visit and I will show you the good and the bad of Detroit and the inner suburbs.  This is not set up like Canada.

LOL something really cheap like that but you somehow think it will have low vacancy.  Do you see how silly that sounds for a 20k property

Scott K. · Answer

NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

that is not the NW part of the city.  That is a bad spot.  No need to get involved with that drama.  Add 10k and go to the burbs

Andreea Muresan · Answer

@Scott K.  I see that you are in Mad Heights....my parents live there (I did too until I got married and moved across the river to Canada) and they find property taxes to be extremely high (partly due to Lamphere schools, etc) when compared to other surrounding cities like Sterling Heights. In fact, a while back I came across a website that posted the tax rates by city and again MadHeights was higher than many other cities. Curious if you would recommend investing there as opposed to surrounding cities? Pros/Cons?

Scott K. · Answer

Ah yes and here it is.  The typical "block" comment.  You know how crazy and silly that sounds.  LMAO "block"  So Detroit has turned into such a garbage hole that we have to worry about the "block".  So in other words the whole area is a dump but there might be a good "block"  HAHAHAHAHAHAHAHA

This is why I laugh at you people.

Just how many properties do you own in the city of Detroit?

Stop sugar coating it.  Also why would not the section 8 person take the voucher to the inner burbs like Warren, Hazel Park, Roseville, East pointe.  I wouldn't want to rent to anyone that chooses to live in the ghetto that is dangerous for their children.  That tells me all that I need to know about that renter.  To raise their own flesh and blood in a crime ridden area is child abuse.

So please stop with the "block" nonsense and really give some thought of how stupid that sounds.  Blocks get worse in Detroit.  They don't get better.  This area will not be turning into Corktown ever

Brent Coombs · Answer

The auction I mentioned elsewhere for 11851 College St, described by the Seller as "...Well-kept and Safe Neighborhood is Excellent for Owner-occupy or Rental..." (https://www.biggerpockets.com/blogs/5681/blog_post...). On average, it looks like you can buy properties through ebay at a QUARTER of the asking price of the SAME HOMES listed on Zillow or Trulia! (But that doesn't answer the question as to whether even $5k for that nice Brick one is good investment value or not).  All I know is that I would rather take a risk at $5k than $20K for whichever SAME property came up in Detroit - and only IF the research soaks up the sort of educated knowledge that can be gained from the likes of Scott, above.  Great cautionary tales so far so far.  Cheers...

Nathan Emmert · Answer

He laughs because you're asking for Nirvana.  You want your cake and you want to eat it too.  When you get high rental prices at low purchase prices you're buying other problems... if those problems/risks didn't exist, the purchase price wouldn't be that low.

What are your thoughts on this $20,000 rental in Detroit?

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