Maintenance Expectations in Metro Detroit

[Kenneth Jenkins]

This is just a brief post to give some insight into the local maintenance costs in the Metro Detroit area.  Maintenance costs are a huge factor in the profitability, or not of any investment property.  A little background about me, I have just over 200 doors in my current portfolio and our company manages just over 250 doors for third party investors in addition to those.  We have seen maintenance costs skyrocket over the past 2-3 years and every case is different but here are some general guidelines for reputable (non-crackhead) investor level pricing in our area of operations:

Furnace and A/C replacement with lineset for standard 3 bed 1 bath bungalow. Licensed with permits ~$4,000.

Full replacement of all water supply lines and shutoffs from the interior water meter with PEX and an open basement.  1 kitchen 1 bath 1 laundry.  Licensed with permits ~$3,250.

HWT standard gas single family low efficiency without exhaust retrofit $900.

Sand and stain hardwood floors, natural stain $3 per sf.

Paint interior walls, ceiling trim and doors 3 tone paint scheme 2 coats $3.20 per sf (floor area cost includes paint)

Click lock LVT flooring install overlay inclusive of prep and quarter round $4.50 per sf (materials and labor)

Asphalt roof installation 3/1 - 800 sf bungalow with 2 layers of shingles - ~$7,900

Standard porch cap replacement with 2 new precast concrete steps ~$2,500

Used stove or refrigerator delivery and install $350

New stove or refrigerator delivery and install $HD model specific

Use this as a general guideline.  YES, you can get the work done for less than this on occasion, in particular if you are doing some or all of the labor yourself, not pulling permits, or purchasing stolen materials as a starting point.  If you get a quote significantly below the numbers above you need to ensure that the contractor will actually execute the work and perform it to the required standard.  For instance we have seen dozens of sand and stain jobs on hardwood at $2/sf that needed to be completely redone. 

Knowledge and use of this information should help you to make a more realistic cost estimates for your models.  Happy investing!!!!

[Michael Smythe]

@Wells H. you can spend DAYS driving through Detroit!

Our logical process:

1) Use Neighborhood rankings to narrow down area of city you want to invest in

2) Focus on getting to know that Neighborhood(s), so you know the good & bad streets, block-by-block.

3) Be patient to acquire properties on good streets that meet your buying criteria.

Our rankings are done with a "bell curve" approach. Meaning, a Class C Neighborhood will have majority of Class C properties, but there will still be some Class B and some Class D. So, you still need to be careful:)