[keraT]

I live in Hamtramck and work downriver, my husband works inMidtown Detroit & we both grew up in the Hamtramck area. We were looking for a house for us &everyone suggested we buy something nice in suburb like the once mentionedabove. I understand why families aregiving us this suggestion, for better school/safer neighborhood. It will be handy in the future & I admitwhen we have school age kids we most likely will move out.


But for now, I am comfortable in Hamtramck & really don’twant to make my commute longer. However,the economy is just recovering & this is a good time to buy house. The interest is very low. I am thinking ofbuying a house which I can rent out for next 5+ years. After that if we are ready to move out ofHamtramck, we might live in that house or sell it for profit. What location doyou feel will give most bang out of our buck? And what are some importantfactor we should look into?
Troy- safe city,great school (but not all of Troy falls under Troy school district). But dopeople rent in this area? I am assuming out of town employees might rent inTroy due to its reputation or parents might go here for the schooldistrict. According to Zillow theaverage rent is 1600-2000/month but cost of house is around 250K

Sterling Height – 2version of Troy, safe/quietcity. Maybe employee of big 3 company onshort term assignment might rent here. Schoolis ok between Warren con & Utica. Accordingto Zillow average rent is 1200-2000/month & average house is around 200K

Warren – working class city with average school, houses are1960 build mostly. What type of people will rent here? Average rent is 700-1200 but the house priceare cheaper (150K)

Any other city you can think of? I would have just invested in Hamtramck butthe houses are older (1920’s) and require lot of fixing up which my husband can’tdo.

[snoopygirlmi]

Yes - there are a lot of rentals in Troy.

Warren Consolidated isn't that great of a school district. Utica is better.

Warren - working class. Renters would be people who can't afford Troy or Sterling Heights.

A lot of people rent in Macomb County because it's cheaper than renting in Oakland and you get more for your money.

[keraT]

Which area among those 3 cities that will give me tenants the fastest (I.e have a good supply of tenants)

[animatedmartian]

They'll all probably give you a good supply of tenets, just each area will have usually different types of tenets. In Troy, you usually get people who are from out of town while Warren tends to have more local long-term residents. Sterling Heights is kind of in-between.

[jackmichigan]

If you're presently renting, I would suggest that you just look for a house to live in, and not use it as a rental. Since you work downriver, you should look into Grosse Ile. If your husband isn't handy, it doesn't sound like you should get into the landlord business.

[MIEng]

Originally Posted by keraT

I live in Hamtramck and work downriver, my husband works inMidtown Detroit & we both grew up in the Hamtramck area. We were looking for a house for us &everyone suggested we buy something nice in suburb like the once mentionedabove. I understand why families aregiving us this suggestion, for better school/safer neighborhood. It will be handy in the future & I admitwhen we have school age kids we most likely will move out.


But for now, I am comfortable in Hamtramck & really don’twant to make my commute longer. However,the economy is just recovering & this is a good time to buy house. The interest is very low. I am thinking ofbuying a house which I can rent out for next 5+ years. After that if we are ready to move out ofHamtramck, we might live in that house or sell it for profit. What location doyou feel will give most bang out of our buck? And what are some importantfactor we should look into?
Troy- safe city,great school (but not all of Troy falls under Troy school district). But dopeople rent in this area? I am assuming out of town employees might rent inTroy due to its reputation or parents might go here for the schooldistrict. According to Zillow theaverage rent is 1600-2000/month but cost of house is around 250K

Sterling Height – 2version of Troy, safe/quietcity. Maybe employee of big 3 company onshort term assignment might rent here. Schoolis ok between Warren con & Utica. Accordingto Zillow average rent is 1200-2000/month & average house is around 200K

Warren – working class city with average school, houses are1960 build mostly. What type of people will rent here? Average rent is 700-1200 but the house priceare cheaper (150K)

Any other city you can think of? I would have just invested in Hamtramck butthe houses are older (1920’s) and require lot of fixing up which my husband can’tdo.

Before you do anything you need to think if this is a house you might want to live in the future. The type of house that might give you the best return for a rental property might be very different from the type of house (and area) were you might want to live. The rental market in the metro area is very strong, specially on the inner ring suburbs. From the three cities you mention, the best return you will problably get it from Warren. Cheaper, lower taxes. Troy is desirable but houses are expensive and the non homestead taxes are going to be very high, so you will have very high fixed cost.
Years ago my husband and I started bying houses in Warren and southern Ferndale (all cash). A friend of ours said we were making a mistake because those areas have working class people. He went ahead and bought a couple of houses in West Bloomfield (with loans because they were expensive). He wanted the "high end " renter. Let me tell you his experience was not "high end". Two of his houses got trashed and he had to deal with several evictions only on a two year period. He ended selling everything at a loss.
We still have all of our houses and the issues have been minimal. We have made mistakes (buying in Detroit) but our experience has been very positive. Our renters are working class (and long time renters). All they want is a clean affordable place to live near hospitals, schools and work. Moving is a hassle and is expensive, so if you can provide them with what they need, they will be long time renters.
I will tell you though I try to avoid voucher recipiants, unless they are elderly.
That is just my experience.
Good Luck!!

[keraT]

MIEng
You are absolutely correct that living home and rental investment are not same. After seeing knew build home (2000+), we are finding it difficult to choose an older 1970's home. But for rent these newer home that cost 100K more are not going to give too much benefit over the cheaper home.

I guess I am not looking for permanent investment. More like, get someone else to pay my mortgage for few years while I live in my existing home. Then move in when I am ready & hopefully 1/3 of my mortgage will be paid off by then, assuming tenants don't destroy the house. I do have a house in Hamtramck currently that I am happy to live in but in future that might not be such a great idea.

I have started looking in to Madison Heights area & I don't understand why the tax on nicer home in Warren & Madison Heights are so much more than Troy or Sterling Heights

[animatedmartian]

Troy and Sterling Heights have lower millage rates. Or rather, taxes are lower in Troy and Sterling Height than they are in Warren and Madison Heights (as well as other inner-ring suburbs). In general, taxes are higher the closer you are to Detroit, which Detroit itself has the highest property taxes in the state.

Most of the time the difference in taxes aren't too noticeable because most homes closer to Detroit are older and usually smaller than homes farther out. Like if you took a $300,000 house from out in Shelby Township or something and plopped it in Warren, taxes would probably double or triple on that same house. Most of it is because the older cities usually have more services and more infrastructure to pay for.

https://treas-secure.state.mi.us/pte...TEstimator.asp