Metro Detroit investment properties
When buying a Metro Detroit Investment property you have to do your home work. You want to cash flow if you are buying the investment property to rent out.
How much will you rent it for? Look in the local papers to see what Metro Detroit investment properties are renting for in the area. Check Craigs list? Check the MLS for all the properties in the area. Don’t just pull a number out of the air and expect to get it.
How much will the taxes be? In Metro Detroit and in Michigan investment properties have higher taxes. They are not homesteaded. Call the city and get the non-homesteaded property tax rate. Find out what the State Equalized Value (SEV) is. That way you can figure out what the taxes will be when you buy the home. Don’t assume that you will be able to fight the high taxes and win.
How much will your mortgage be? Call a local Michigan Mortage Loan Officer and get approved. Find out what the monthly mortgage payment will be.
How much is will the insurance be? Call your insurance agent. Different cities have different insurance rates based on the amount of crimes and claims a company has. Rental property insurance has different prices and restrictions.
So now you have estimates of how much rent you can charge. You have estimates of what your costs will be. So subtract your costs from your projected rent and you will know whether you can cash flow.
Don’t assume anything
Don’t guess high on the rent
Dont guess low on your expenses
Buying Metro Detroit investment properties can be financially draining. Be sure to have a rainy day fund. If you don’t cash flow I would recommend not buying the property.
My qoute of the day is:
If you can’t be happy where you are, it’s a cinch you can’t be happy where you ain’t.
Charles “Tremendous” Jones