Key Guidelines to Consider When Investing in the Detroit Property Market
Detroit is a location which provides for high rental yields when purchasing bank owned properties at low prices. Increasing numbers of property investors can see the benefits in Detroit, MI.
There are a few paramount issues that a new investor will need to consider when buying in Detroit. The golden rule is to target a good neighbourhood and a property that will provide good cash flow.
After locating a potential property, you should the following guidelines to assess whether you actually have a suitable investment property.
Guideline One: Determine, whether your property is close to schools, health centres, shopping centres, bus routes and highways. Neighbourhoods with these amenities are desirable and will attract a steady flow of potential renters.
Guideline Two: Do not purchase property that is close to fire damaged homes, especially in Detroit. Houses in a block or street with fire damaged houses will attract potential crime and will devalue your property as well as make your property vulnerable and undesirable to renters.
Guideline Three: Drive by the block and surrounding streets to determine how many properties are vacant in the neighbourhood. In areas, where there are too many vacant properties there maybe underlying issues in the neighbourhood, which has led to high vacancies. Exercise caution in high vacancy neighbourhoods.
Guideline Four: When visiting the neighbourhood look to see if you notice builders (contractors) repairing or renovating nearby properties. If there are a good number of properties being repaired or renovated that is a good sign, as it shows that the neighbourhood is either well maintained or being regenerated by other investors. The effects are likely to be good quality homes, a better class of renters and more desirable neighbourhood.
Guideline Five: Determine if there is a pride of ownership in the block. You will notice in good neighbourhoods that the lawn is neat and tidy and the houses are well maintained. Usually in such neighbourhoods owner-occupiers out-number renters and this is a good sign for a potential investment property. Furthermore, the problems of illegal activities are greatly reduced in such locations.
Guideline Six: When purchasing property in Detroit thoroughly determine the annual property taxes. Property taxes in Detroit vary substantially from $1,500 to extremes in excess of $15,000. Detroit property taxes can vary rapidly between the type of house, zip code and location within the city. The tax information can be found by contacting the city council.
Following these fundamental guidelines will help you determine whether your located a good investment or potential money pit.
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For more resources and information about investment properties in Detroit visit http://www.detroitinvest.co.uk
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