Buying a house with cash or renting in Detroit as a grad student (Royal Oak: for sale)
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Hello,
I have been searching these forums for a while about the safety/ wisdom in living in detroit proper and would like some unique advice on home buying.
To give you some background, I have visited detroit to interview at the school i will be attending (medical school) and i stayed in corktown and drove around downtown and midtown and new center. I also visited royal oak and ferndale to see what they were like as those areas were recommended by the school along with dearborn.
I really fell in love with detroit, people were friendly and smiled at me in the streets and said hello (unlike new york city where i live now), the school was wonderful and is the reason i'm coming to detroit and downtown looks nice. I felt safe walking around in corktown, the area in Detroit by belle isle, downtown, midtown too. I like downtown royal oak to go out/ de-stress in a bar but the suburban houses with little space between each house and the uniformity really depresses me as well as the lack of parks from what i can tell. I'd prefer to drive to royal oak for a night out/ date than live there just to have it in walking distance.
My plan right now is to get a short term lease on an apartment downtown and use that time to scour the neighborhoods and houses for sale and plan on buying a house next year that costs less than 90K as there seem to be enough houses for sale- that are livable and not foreclosures or short sales- at that price from my research so far. I was looking at areas near downtown detroit like mexicantown, corktown, around the palmer golf course, the area surrounding indian village (from downtown to mcclelan street) and the grosse pointe area. If everything seems too unsafe i would consider st clair shores for proximity to the lake for recreation and parks although that puts me at a commute of about 30 minutes to school near midtown.
Are these areas wise? Particularly around but not in indian village as i didn't drive through there or the grosse pointe area.
I would also like to know your opinions on whether this is a good move- to buy a house and pay the same amount i would pay for rent in 4 years and have a property. I will be paying cash (supplied by student loans) for the house as i will be attending medical school on a full scholarship but allowed to borrow up to my tuition. one year tuition is equal to the cost of a house. If i don't buy a house i will live in a high rise downtown which will cost just as much over 4 years.
I will also be living alone with a german shepherd unless i decide to get a roommate. I am a woman if that matters who has lived and thrived in third world countries and consider myself "street smart."
It's a definite gamble (buying a home). Some say the area is on the rise, which I agree, but there is so much that needs work in the city it feels like the bottom could fall out at any time.
Personally, I'd never buy a home in Detroit. I would much rather rent. It's pricey and you don't get any equity, but you don't have that lingering feeling of another bottom falling out.
Honestly, I'd try renting a home first, then rent a apartment... get some 3-6 month leases. See which you feel most comfortable with.
BTW, congrats on the full ride. I can't even get a pell grant or a $1,000 scholarship
It's a definite gamble (buying a home). Some say the area is on the rise, which I agree, but there is so much that needs work in the city it feels like the bottom could fall out at any time.
Personally, I'd never buy a home in Detroit. I would much rather rent. It's pricey and you don't get any equity, but you don't have that lingering feeling of another bottom falling out.
Honestly, I'd try renting a home first, then rent a apartment... get some 3-6 month leases. See which you feel most comfortable with.
BTW, congrats on the full ride. I can't even get a pell grant or a $1,000 scholarship
Thank you for you response. I figured as much that the city is starting out again at the bottom but i can't get my head round paying the same amount for rent as i could to on a home. It seems like such a waste of money even in a city like detroit.
If you were to get a place in Rosedale Park, or equivalent, you are getting a home that is turn key ready (as they've been rehabbed by the local associations) and there are nonprofit grants for your down payments to stabilize select neighborhoods. These guys are getting a brand new home for only 40K - that's a world of difference from a gutted 20K home you might find of Trulia/Zillow/MLS. These folks will be the ones coming out ahead in five-ten years. I think finding programs like this is your safest bet.
If you were to get a place in Rosedale Park, or equivalent, you are getting a home that is turn key ready (as they've been rehabbed by the local associations) and there are nonprofit grants for your down payments to stabilize select neighborhoods. These guys are getting a brand new home for only 40K - that's a world of difference from a gutted 20K home you might find of Trulia/Zillow/MLS. These folks will be the ones coming out ahead in five-ten years. I think finding programs like this is your safest bet.
Thanks for the article citation.
I will be buying with cash so i wouldn't need financing but i do need help identifying these decent neighborhoods as i am new to the area. Rosedale Park seems to be 25 minutes from midtown for school. I would prefer to be on the river i think for such a substantial commute. Any ideas on decent neighborhoods closer to midtown? That way i would have access to belle isle for running and a commute of 10 minutes to midtown.
I have also been considering wyandotte for proximity to the water, cheap turn key homes and proximity to a metro park (lake erie) and midtown.
It seems my priorities for renting are closeness- less than 10 minute drive and a sacrifice in park proximity.
Whereas for buying my priorities right now are for enjoyment- closeness to a park or running trail, commute of 30 minutes or less & community feeling, preferably by the water.
Any ideas on other neighborhoods to consider?
Your basic consideration is whether to rent or own. If you're not planning to live here beyond 4 years, buying a house becomes a bit questionable. Beyond the initial cost, property taxes are high (make sure to find out what they would be ahead of time, not just what the current taxes are) and property insurance is high. You'll need to be able to pay for repairs should something go wrong...and then you'll have to factor in selling costs (real estate commission if you go that route) if you're going to move after 4 years. If it were just a matter of renting or buying for a relatively short time frame, renting is certainly simpler and probably preferable.
In a typical financed home purchase, it is usually recommended to avoid buying if you're only planning to live there a short time because in the first few years most of the payments go towards interest, not principal, so you're not building up much equity. Plus, then there are the costs of ownership, some of which I've mentioned above. (You said you plan to pay cash, but if it's from student loans it's still being financed.)
However, you mentioned that you thought 4 years of rent would equal what you'd pay for a house, so I can see why this is more of a question for you. I can't imagine, however, that rent should equal 25% of the value of the property being rented (at least for more expensive properties), so I have to wonder if you're looking at higher quality rental versus what you would buy. Perhaps if you looked at a less expensive property to rent, your decision would be easier.
There are certainly a lot of places in Detroit which would be considered relatively safe. The midtown area would be a place to look at, especially since it's so close to the med school. Renting for a short time while you get more accustomed to the area is certainly a good idea.
If you do decide to look into buying, you should get the help of a local real estate agent who is familiar with the local market. This isn't New York, and Detroit doesn't have prices anywhere near New York's prices. Make sure that you become familiar with local prices so you don't overpay for a property. What sounds reasonable or cheap could actually be way too much...which you'd find out when you went to sell.
I have the same concerns that the other posters have.
If you aren't looking at staying in the area after medical school, then I'd rent (just to be flexible).
Detroit isn't like other major cities where people are constantly moving in and out all the time. A lot of people have been moving out for decades, but very slowly are people moving back in.
People aren't just dying to move to Detroit in the same way people want to move to Chicago or NYC. Housing isn't that scarce - which is good if you are a buyer, but kind of bad if you are a seller.
In my area, reasonably priced, well-maintained homes go fast. If they have problems or they are priced too high, then they sit on the market.
It's a lot harder to move when you can't sell your house. I know people who are stuck with houses they don't want, but can't sell. I know others who have been trying to "unload" a second house, but haven't found the right buyers, so they rent out the first house and live or rent in the second one (in a different city).
Detroit is so much cheaper than NYC. And, the housing market varies depending on what area of the city (or region) you are living in and looking. You definitely need a relator who knows Detroit and the neighborhoods you want to move to.
Thanks for the article citation.
I will be buying with cash so i wouldn't need financing but i do need help identifying these decent neighborhoods as i am new to the area. Rosedale Park seems to be 25 minutes from midtown for school. I would prefer to be on the river i think for such a substantial commute. Any ideas on decent neighborhoods closer to midtown? That way i would have access to belle isle for running and a commute of 10 minutes to midtown.
I have also been considering wyandotte for proximity to the water, cheap turn key homes and proximity to a metro park (lake erie) and midtown.
It seems my priorities for renting are closeness- less than 10 minute drive and a sacrifice in park proximity.
Whereas for buying my priorities right now are for enjoyment- closeness to a park or running trail, commute of 30 minutes or less & community feeling, preferably by the water.
Any ideas on other neighborhoods to consider?
for an area closer to the water and belle isle and midtown I'd suggest Indian Village (or other parts of the Villages mainly West Village or Berry Subdivision). You'd be about 10 min from midtown and the Detroit river and belle isle is across the street. The homes are nicer IMO than Rosedale Park but that's because I'm a huge fan of homes from that era (The Berry Sub has newer construction homes also). Plus IV has a better association and super nosey neighbors so that's a definite plus to me.
here is a video of both IV and Berry Sub. But I personally prefer West Village which is like the more affordable version of IV but you still have access to all of the great things in IV. WV is also due to see a couple of restaurants and shops opening as well as many of the apartments being renovated in the next 2 years.
Hello,
I have been searching these forums for a while about the safety/ wisdom in living in detroit proper and would like some unique advice on home buying.
To give you some background, I have visited detroit to interview at the school i will be attending (medical school) and i stayed in corktown and drove around downtown and midtown and new center. I also visited royal oak and ferndale to see what they were like as those areas were recommended by the school along with dearborn.
I really fell in love with detroit, people were friendly and smiled at me in the streets and said hello (unlike new york city where i live now), the school was wonderful and is the reason i'm coming to detroit and downtown looks nice. I felt safe walking around in corktown, the area in Detroit by belle isle, downtown, midtown too. I like downtown royal oak to go out/ de-stress in a bar but the suburban houses with little space between each house and the uniformity really depresses me as well as the lack of parks from what i can tell. I'd prefer to drive to royal oak for a night out/ date than live there just to have it in walking distance.
My plan right now is to get a short term lease on an apartment downtown and use that time to scour the neighborhoods and houses for sale and plan on buying a house next year that costs less than 90K as there seem to be enough houses for sale- that are livable and not foreclosures or short sales- at that price from my research so far. I was looking at areas near downtown detroit like mexicantown, corktown, around the palmer golf course, the area surrounding indian village (from downtown to mcclelan street) and the grosse pointe area. If everything seems too unsafe i would consider st clair shores for proximity to the lake for recreation and parks although that puts me at a commute of about 30 minutes to school near midtown.
Are these areas wise? Particularly around but not in indian village as i didn't drive through there or the grosse pointe area.
I would also like to know your opinions on whether this is a good move- to buy a house and pay the same amount i would pay for rent in 4 years and have a property. I will be paying cash (supplied by student loans) for the house as i will be attending medical school on a full scholarship but allowed to borrow up to my tuition. one year tuition is equal to the cost of a house. If i don't buy a house i will live in a high rise downtown which will cost just as much over 4 years.
I will also be living alone with a german shepherd unless i decide to get a roommate. I am a woman if that matters who has lived and thrived in third world countries and consider myself "street smart."
I appreciate the help.
Your biggest concern of med school is med school. You may decide after match you want to go somewhere else. Or if you go for a competitive specialty- you may just have to take whatever spot you get, wherever it is. Being done with school, having a spot in a residency and being tied down or trying to sell a house would be rough.
Move to Royal Oak, enjoy school and the last of your 20's IMHO. Save the financial moves for residency or fellowship.
FWIW, Detroit is not the third world. Wandering around Soweto or worse, tribal regions of Pakistan is different than living in Detroit. Your goal is not to assimilate or change the block- just knock out school for now. Good luck.
Last edited by GreyDay; 04-17-2013 at 07:40 PM..
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