Detroit Real Estate

I got a call today from a man that was disabled with cancer who wanted to invest in Detroit and buy income producing properties.  Being a landlord is a tricky business and not for the faint of heart.  You can find as many Detroit properties that will cash flow on paper, but making them cash flow in real life is another issue.

Remember renters do not have to pay you.  Many times they will give you a song and dance why the can't pay you this month, or drag it out so they are 10 - 15 days behind.    After a couple of months those 10 - 15 days behind become a month behind.  They will damage the house.   They might even steal parts of the house.  Then if the house is vacant in Detroit, you have a good chance of having the furnace, hot water tank, or the copper plumbing stolen.

Over 50% of Detroit is income properties, and many people that live in Detroit live on government assistance and live near poverty level.  Most renters are people that have bad credit and/or can't afford to buy a home (that's why they rent and don't own a home).  Add to a over abundance of income properties, low income people, and poor schools you have a recipe for not getting great renters or rent payments on time.

This gentlemen that called wanted to invest an inheritance to provide more income because he wasn't getting a lot in disability income.  My words of wisdom to him was don't do it.  I don't know how disabled his was, but how was he going to chase around renters for money each month.  How was he going to do the repairs on Detroit income producing properties?  How was he going to secure the house when it wasn't rented.

There were a lot of problems for this potential landlord.  I basically told him that if it was my brother, my friend, or my client I wouldn't recommend becoming a landlord in Detroit at this time especially if he was disabled.  I even told him I would feel comfortable being his agent as I think he would be throwing away his inheritance.  Whether he listens to me or not, at least I gave him my professional opinion.

I know too many Detroit landlords that are sitting with vacant properties, or have given them back to the bank.  Being a landlord in the suburbs is tough enough without getting involved with the City of Detroit income producing properties.

But on the other hand there are landlords in Detroit that ARE MAKING MONEY.  But they are hands on landlords, know where to buy homes, and try to screen their applicants to get the best tenants possible.  

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