It’s one thing to sit around and read about all the real estate and investing progress in Detroit. It’s a whole different ball game to be a part of it. Many of you shy away from putting your money in Detroit because you’re not quite sure you’re ready to handle the market downtown. While the media reports how much progress Detroit has made, many of you know that it’s still a long way off from where it once was. We know that it looks volatile at times, but we have a few tips to help ease your worries. Read on to find out what you should know before getting into real estate in Detroit, and how to be sure if you’re ready for the commitment.
- Study Neighborhood Investment Ranges – Since the end of bankruptcy in Detroit, many areas are now starting to show imminent progress of increased home values. As Mayor Duggan recently proposed, home values will be reappraised, and now is the time to pay attention the numbers. Look for an area in Detroit that has more business centered construction, to see where the residential potential could be.
- Look For Neighborhood Deal Breakers – These should be fairly obvious, but it’s up to you to determine what level of these ‘deal breakers’ you’re willing to stretch. Weigh your options with the following, before investing:
- Property Crime
- Flood Zones
- Counter Productive Construction (i.e., tenants won’t move here)
- Find The Diamond In The Rough – It doesn’t matter who you are or where you live, everyone is looking for a nice quality home that is appealing to their eyes. Each home that you consider in Detroit should be inspected thoroughly, but don’t dismiss a property with potential, if the structural foundation is solid. Maybe the home you found is old, but the undercarriage is in good condition. Depending on how much money you’re willing to spend, this may be your ticket to success!
- Put Down As Much Money As You Can – This goes with any purchase, but the larger the down payment you can place on a Detroit home, the sooner your ROI starts kicking in. Try and apply this rule as much as you can in lower income areas, in order to maximize your profits quickly.
- Make Security A Priority – When you’re looking into lower income areas of Detroit, you and your tenant’s security is going to be the first thing anyone looks at. Look at installing outdoor light fixtures and security sensors, whenever possible.
- Screen Your Tenants Thoroughly – One of the biggest problems with low income areas are the tenants that you come across. The last thing you need in your home is a tenant that isn’t committed and willing to keep up your house, and stick around. Make sure you thoroughly screen all of your tenants. This includes employment verifications, background checks, income checks, and a solid list of references. Additionally, get their information on their previous living area, and call the landlord to see how they rate.