All Forum Posts by: Jennifer Streamer

I have properties in Madison Heights that perform very well.  I agree with all the earlier comments.  It's a nice community.  Our tenants are typically nurses, teachers, and accountants.  The location is convenient.  I feel totally safe in Madison Heights for shopping, going for a walk, or working on a property at all hours of the night.  We have bought all of our properties in the northern end of the city, in the Lamphere School district.  That's a well regarded, blue ribbon district.  The school district at the southern end of the city is called Madison and it is not a strong school district which is one of the reasons the housing prices are so much lower.  The neighborhoods are not as nice.  The houses are not as well cared for and there are many more rentals.  From what I've observed, you will probably do better in terms of cashflow in the south end of the city, but not as well with appreciation.

I like to wrap up my threads in case someone is reviewing in the future.  Here is how it turned out.  The tenant paid her November rent, but not December.  We had a new tenant in place on January 1st.  We sent her the checklist of repairs we made after turn over activities.  We spent some time writing it up carefully and deducted the December rent and final water bill.  After the repairs, she owed us $900 or so.  We included info in the letter that we would take her to small claims court if she didn't pay us the balance.

After two weeks, we were preparing to send a second and final notice but, SURPRISE!  She sent the $900 she owed.  So everything turned out fine and we didn't even need to go to court.  

One of these days, I'm sure a tenant will burn us and we'll get more cynical.  But for now, we still don't have any horror stories.  This was still annoying though.

@Deanna McCormick Sometimes people do the right thing!

@Deanna McCormick  Thanks Deanna.  Our state law says 30 days, but I'm not finding a clear answer if that is from the end of the lease or from the date they moved out.  They have not returned the keys yet and the utilities are still in their name.  They moved the bulk of their possessions out by October 31st, with a few odd items taken out over the next week.

I probably should talk to a lawyer to make sure I'm doing everything in the proper way.  She did notify me this morning that she plans to pay the november rent, with late fees.  She'd alerted me on the first that for the first time she was short and asked for an extension.

This is a follow up to an earlier question I asked.  I had a previously excellent tenant break their lease.  We agreed she would continue to pay rent until a new tenant is found.  She is not low income.  We're advertising heavily but given the time of year, we're not getting any bites.  We're below market rent. In the spring our properties in this neighborhood rent in a week, at a higher rent. That's the background.

She hasn't followed through on paying rent for this month and I suspect we may need rent from her in December, as well.  We'll likely be going to small claims court.

What I'm specifically wondering about is the security deposit.  Do I need to provide the itemized list within 30 days of the day they vacated the property or within 30 days of of the end of the lease?  Also, do I need to return the balance of the security deposit within 30 days of them vacating or within 30 days of the end of the lease?  (We'll end the lease when a new tenant is in place)

I've been doing lots of googling, but the answers I've found aren't very clear.  Before consulting with a lawyer, I wanted to pick the brains of this community :-)  I want to do this by the book so I'll have a clear case if/when we end up in court.  

Thanks @David Avetisyan. 

We had a tenant for 18 months.  She was never late and caused no problems.  Last month, she informed us she had purchased a house.  She was only 5 months into her lease.  We posted the property for rent immediately, but it did not show well while she was there and we had no applicants.  She left at the end of October.  We've repainted and done repairs.  The place looks good.  But we have no showings, much less applicants.  We've priced below market.  It's the time of the year, I'm sure.  Our properties in that neighborhood rent within 1-2 weeks in the spring.

Here's my question.  We agreed that she would be released from her lease once we had a new tenant in place.  I suspect she is going to stop paying before that happens.  Can we take her to small claims court for the unpaid rent even though she has vacated the premises?

Thanks in advance!

@Doran Brooks  You've got it.  Homestead means it's your primary residence.  Non-homestead means it is not.  You can only have one homestead, so you'll pay non-homestead on a vacation property. 

If you buy a multi-family you'll get homestead taxes, but once you move out you'll pay non-homestead.  It's roughly 30% more, but always best to check.

I'm not sure that the taxes in general are high.  My parents live outside of Peoria, Il and we were doing a side by side taxes comparison recently.  Taxes were much higher there.  A few things to bear in mind.  Homestead vs. non-homestead  are different.  A city with low homestead taxes may have high non-homestead taxes (in comparison to other cities).  Be sure to check both, especially if you're going to house hack.  Google the michigan property tax calculator (my link isn't handy here).  It's easy to figure out.  

Also, different counties have different taxes.  Wayne county, which includes Detroit, generally has higher taxes than Oakland or Macomb County.  It's best to do a city by city comparison.  

Here is a comparison of non-homestead taxes in several oakland county cities.  I've copied this from another thread I posted in:

 "Here are the non-homestead annual taxes on a 120k house in each of the following cities.  Note that you won't find a 120k house in several of the cities (no houses that cheap in RO, Berkley, etc), but the numbers work for a tax comparison.

Hazel Park: $5627

Clawson: 4219

Royal Oak: $3467

Madison Heights (Lamphere Schools): $3748

Madison Heights (Madison Schools) -- lesser area of madison heights with LOWER homestead taxes.  But check out the non-homestead vs Lamphere Schools:  $3928

Oak Park (Berkley Schools): $4855

I also discovered insurance is higher in Hazel Park.

Basically, I realized that my monthly payment with a 30 year mortgage, tax and insurance was roughly the same if I bought a 160k property in Royal Oak or a 120k property in Hazel Park.

Since the rent in Royal Oak is greater, I have a higher return on the 160k property in Royal Oak. The down payment is more, naturally, so it may be possible to do better in Hazel park because you are able to buy more homes - especially if you're buying the lower cost homes.

Royal Oak has finally returned to it's pre-recession prices.  If you take inflation into account, it's still below where it was prior to the recession - just barely.  I think the price reductions are due to people overestimating what there house is worth when they originally list it.  There is still a ceiling!  For example, when I see bungalows over 175k in the northeast corner of the city (Bauman, Donald, etc.)  I know they'll sit for a while.  

When a house is listed in Royal Oak at the right price, there are still multiple offers over asking.  We went 33k over asking on a property recently.  We put in the offer on the day it went onto the market.  We didn't get the house!

I think there is still room to grow in terms of appreciation. That being said, it's getting tough to find a good, cashflowing deal with adequate ROI. We like to get all our money back within 7 years and stay over 15% rate of return. Rents have gone up, but I think rents will hit their ceiling before prices do.