Home Ownership now for FAR in the future. Worth it? Metro Detroit. (Flint: section 8, real estate)

[Tiger Beer]

Here is an idea I've had from time to time. As I'm an American living abroad, at times I think it would be real nice to own something. Some piece of property that I could eventually pay off, and be guaranteed of having somewhere to go, when I become old.

So, the question is, IS IT WORTH IT? Is buying a house like that, and not particularly living in it, worth it? I'd still have to find rental tenants, and pay property taxes. It would age another 20 years or so by the time I made a move - than of course when the time came, maybe I wouldn't want to live there at all anyways. Hmm.

Maybe this comes down to security, peace of mind, just in case all **** hits the fan anytime in my life, and especially in those 'too old to work' types of years.

As to where, I was actually thinking of Dearborn, especially where the Arabic populations live. It seems the upkeep on homes is quite nice, people seem to take care of where they live. So, buying a home, you'd probably have a lot less maintanence issues and such. Plus, it has a nice neighborhood feel and walkability that might be appreciative when a person becomes old and the eyesight and driving isn't so easy anymore.

I also have family north of Detroit, who could oversee the property, etc. Even if I am far away. The downside though is perhaps once owned, still a lot of maintenance issues, taxes, unforeseen hidden expenses, tenant issues, finding tenants, finding property managers who would take some of that income, maybe rent isn't high enough to make the rest worth it, long-distance issues, etc.

The other issue is maybe I wouldn't want to be in MI anyways someday. Too cold, too many negatives, etc. And if 'iffy' on that, does it defeat the purpose of attaining home ownership for the other issues. MI only strikes as good, as that is where I grew up, and have family.

[ForStarters]

I have no personal experience with home ownership, but if you like Metro Detroit and have the financial means to buy right now, I don't think it is a bad time. Ironically, I am having a debate on another thread about the exclusivity of the Grosse Pointe communities. As it was pointed out there, the price of homes in elite communities, like Grosse Pointe, Birmingham, and Indian Village are at all time lows. The amount of house you get for the money is really unrivaled. Apparently, you can have a 2,300 sq. ft. house made of pink stucco in South Central L.A. for $350,000, or you can you have a turn-of-the-century brick tudor mansion with 3 fireplaces and a boat dock on Lake St. Claire for the same price. For me, the better of the two deals is obvious, but to each his/her own.

Like you, I really dig Dearborn (I think we had this conversation before). It was the only inner-ring suburb to gain population over the past decade. Immigration, an ardent police force, and strict code enforcement have kept Dearborn a first-rate community. Ford Motor Company's investment in the city also helps. I really enjoy the ethnic diversity of Dearborn as well as the urban fabric of East Dearborn. You also have major cultural attractions in your backyard. There's no question Henry Ford Museum and Greenfield Village are among the nicest historical attractions anywhere, and have been repeatedly recognized as such. In terms of the central city, I think downtown Detroit is only going to improve over time. In 20 years, I expect it to be on par with other vibrant urban areas around the country, and only behind Chicago in the Midwest.

No doubt, right now is a buyer's market, but I wouldn't buy prematurely if you don't want to deal with the taxes, insurance, and maintenance etc. Long-distance tenants probably have the potential to be a hassle. Overall, I guess it depends on how sure you are about setting up shop in Metro Detroit later on down the line.

[Shinhiryuu]

Originally Posted by Tiger Beer

Here is an idea I've had from time to time. As I'm an American living abroad, at times I think it would be real nice to own something. Some piece of property that I could eventually pay off, and be guaranteed of having somewhere to go, when I become old.

So, the question is, IS IT WORTH IT? Is buying a house like that, and not particularly living in it, worth it? I'd still have to find rental tenants, and pay property taxes. It would age another 20 years or so by the time I made a move - than of course when the time came, maybe I wouldn't want to live there at all anyways. Hmm.

Maybe this comes down to security, peace of mind, just in case all **** hits the fan anytime in my life, and especially in those 'too old to work' types of years.

As to where, I was actually thinking of Dearborn, especially where the Arabic populations live. It seems the upkeep on homes is quite nice, people seem to take care of where they live. So, buying a home, you'd probably have a lot less maintanence issues and such. Plus, it has a nice neighborhood feel and walkability that might be appreciative when a person becomes old and the eyesight and driving isn't so easy anymore.

I also have family north of Detroit, who could oversee the property, etc. Even if I am far away. The downside though is perhaps once owned, still a lot of maintenance issues, taxes, unforeseen hidden expenses, tenant issues, finding tenants, finding property managers who would take some of that income, maybe rent isn't high enough to make the rest worth it, long-distance issues, etc.

The other issue is maybe I wouldn't want to be in MI anyways someday. Too cold, too many negatives, etc. And if 'iffy' on that, does it defeat the purpose of attaining home ownership for the other issues. MI only strikes as good, as that is where I grew up, and have family.

As Started stated, I can from Los Angeles, and I couldnt pass up the homes here in Detroit. I bought one in Indian Village for 85k which would go for 2 mil in Los Angeles. I was thinking of flipping it in the future for a profit but just being in it makes me think my children would hate me for selling it, might keep it for a winter home in the future

[Tiger Beer]

Originally Posted by ForStarters

Overall, I guess it depends on how sure you are about setting up shop in Metro Detroit later on down the line.

That's a tough one. Maybe I would, maybe I wouldn't.

Wonder if it's still financially worth it, even not knowing if I'd ever end up back in MI again?

[HerbStrather]

If you're even remotely considering investing in property in the Metro Detroit area, now is definitely the perfect time. There are great opportunities everywhere you look. You could get some nice rental income from it and if you have family in the area that would be available for maintenance issues, etc. that may pop up, it certainly sounds like a good idea.

[Coldjensens]

The timing is good. A home is generally not the best investment. Real estaate tends to appreciate, and then tank and then appreciate, and then tank. Whether you make money depends on your timing. Certainly this is a good time to buy. Whether ou make money depends on when you sell.

In additioan to the initial investment, you will have to contninually put mor emoney into a house. It is not like stock that just sits there and grows or declines in value. You have to take care of it. There is maintenaince, improvements, repairs, taxes, insurance (both liability and casualty). If you rent it out, you will need a manager to watch it for you. If you get a bad manager and/or bad tenants, they will ruin the house and you will coollect no rent, or less rent than repairs will cost you. You can end up having to hire lawyers to get bad tenants uot , and if they have no money, you cannot recover the losses.

When you factor in all the costs of maintaining and insuring the property, it is a decent, but not good investment if you ahve no tenant problems, break ins, vandalism and if you sell at the right time.

If you are buying the house for you, then you can factor in your savings on rent or a morgage elsewhere, and you do nto have to worry about tenant problems.

A house is a consumable necessity like a car. In general you should buy a house as a home, not as an investment.

Another option for you is to buy a section 8 apartment building. As long as you maintain the building, the government pays the rent for your tenants. Some friends bought a 10-15 unit building in Salt Lake City about four or five years ago. They have reached the break even point (where they are spending the same amount on loan payments, insurance, taxes repairs, etc as they get in rent). However if any of the units are not occupied for any length of time, then they lose money. Eventually, it will become a positive cash flow investment for them. As they pay down the loan, it could eventually be a good investment for them as long as they have no major tenant problems, do not get sued, and have no major repairs needed.

Most investment advisors tell you to dabble in real estate if you think it is fun and you like owning property, but it may not pay off for you

[Carrera4S]

Like David Grier said,"I'm gonna wait until I can get a whole city block for about $37".

[detroitlove]

^^^^^well you'll be waiting for a long time

Shinhiryuu, how is IV going for you?

[chiroptera]

What coldjensens said, all of it.

Timing is big. Personal anecdote: I bought a house in Flint in 2004, so clearly my timing sucked! (Possibly the location, too - but I wanted to pay cash and I could afford Flint.) I moved right in, though, did various improvements while I lived there, bought a house a little north of Flint last summer, am now renting house number one. Which is now worth a third of what I paid for it and needs a new roof this summer....the rent I am going to get for this coming year will cover the taxes and roof, probably not much more.

Also if you buy in a blighted or sort-of-blighted area, you run the risk of the house being stripped, vandalised or burned if left empty.

The Section 8 option is a good suggestion, IMO. I'm holding onto my little house because who knows what will be happening in 10 or 15 years, economy-wise....but as long as it does not cost me anything to own (ie maintenance, insurance and taxes are covered by rent) I figure I cannot lose.

[Shinhiryuu]

Originally Posted by detroitlove

^^^^^well you'll be waiting for a long time

Shinhiryuu, how is IV going for you?

fixng it up still, got an alarm, and joined the iv asdociation, great people so far. very hippy type ahahaha, you move in