Buying low in Detroit via vacant home lots- downsides? (real estate, 2013)

[p_finerty]

Interested in investing in Detroit for the simple reason that it should hit the bottom at some point. What are the downsides to buying vacant home lots where the homes have already been demolished? I'm a former Detroiter who now lives out of state. I suppose taxes could be my only risk? Thanks

[jackmichigan]

Why would you want to buy a vacant lot? With housing prices so low, it's not like building a house on it would be a wise move.

I think taxes would be the least of your concerns. A bigger concern would be people dumping on it--everything from tires to who knows what. The City will fine YOU if people dump on your property and you don't clean it up.

You would also need to maintain the lot by keeping the grass cut. You'll get hefty fines if you just let weeds grow on the property. With the City in such bad shape financially, they're looking at lots of short-term ways to raise revenue--even if it means chasing businesses and residents away from the city with their enforcement policies.

[Zippyman]

Originally Posted by p_finerty

Interested in investing in Detroit for the simple reason that it should hit the bottom at some point. What are the downsides to buying vacant home lots where the homes have already been demolished? I'm a former Detroiter who now lives out of state. I suppose taxes could be my only risk? Thanks

Taxes arent a minor risk- the tax rates for vacant land are very high. I'd also be concerned about trash being left on the lots, street and sidewalk assessments & being ticketed for not mowing the lots & shoveling the sidewalks. I can't see an upside unless you're able to secure a bunch of contiguous lots near an area expected to redevelop soon.

[p_finerty]

I'm trying to think of a way to make a small long term investment in Detroit in which I could write a check and forget about it for ten years and then maybe sell. Plus, it would be cool in a strange way to own real estate in Detroit.

[p_finerty]

Originally Posted by Zippyman

Taxes arent a minor risk- the tax rates for vacant land are very high. I'd also be concerned about trash being left on the lots, street and sidewalk assessments & being ticketed for not mowing the lots & shoveling the sidewalks. I can't see an upside unless you're able to secure a bunch of contiguous lots near an area expected to redevelop soon.

Good info!

[City Guy997S]

Originally Posted by p_finerty

I'm trying to think of a way to make a small long term investment in Detroit in which I could write a check and forget about it for ten years and then maybe sell. Plus, it would be cool in a strange way to own real estate in Detroit.

Fantasy is way better than the reality!

You can buy homes in Detroit for less than $1000 so what would be the advantage of owning an empty lot that will cost you tens of thousands to build on? You may not want to build but the buyer of your lots in 10 years will surely consider it.

Google: 14803 Mayfield St Detroit
Asking $2000 for a nice looking brick house.
Now look at google maps and hit "street view" cruise around online and see how bad that neighborhood looks and let me know if you think it will get better in 10 years. The garbage cans in the street will give you an idea who lives there and that the majority of the houses are vacant. Sad, they looked like nice homes at one time but the broken windows indicate they have been vandalized, stripped for copper plumbing/electric wires etc. making remodeling a very expensive undertaking for the entrepreneur that wants to spend some time/money there.

My buddy has a great saying when it comes to remodeling real estate: "you can fix up a house but you can't fix up a neighborhood!"

[malamute]

I would think lawsuits also would make it a bad idea. If you let trash pile up on your vacant lot and someone gets hurt then the property owner would be sued.

[animatedmartian]

Originally Posted by p_finerty

I'm trying to think of a way to make a small long term investment in Detroit in which I could write a check and forget about it for ten years and then maybe sell. Plus, it would be cool in a strange way to own real estate in Detroit.

If you're really interested you can look through the nearly 19,000 foreclosed properties to choose from.

Detroit: Why Don't We Own This?

There's no telling which ones are vacant plots of land or occupied buildings. Or somewhere in the middle... But hey you find that gem of a piece of land and good luck on ya if you make a few thousand dollars off of it.

[detwahDJ]

Originally Posted by p_finerty

Interested in investing in Detroit for the simple reason that it should hit the bottom at some point. What are the downsides to buying vacant home lots where the homes have already been demolished? I'm a former Detroiter who now lives out of state. I suppose taxes could be my only risk? Thanks

Vacant lots for future "whatever" development? Maybe cool, I agree - but what happens if property is trashed and the city demands cleanup? Where is your oversight and control of this?
In the past, absentee owners have not been held accountable, but with new govt that could change. Maybe you could check into neighborhoods where "urban pioneers" are already active, get their opinions and form alliances with them. Such areas may become more desirable, rising in value faster than more isolated properties. I would look into neighborhoods with active and effective associations, perhaps allowing the locals to use your lots for such projects as gardening.
Insurance? Once an owner, you would need liability protection, perhaps via some waivers from a friendly more progressive government. Might require some lobbying.
These are just thoughts.

[fmax]

animatedmartian,

How does someone use that site you posted > actually buy the property?

For example, '439 E Congress' shows as being foreclosed. It might be fun to buy the place and just throw big parties in it, but how to acquire the piece.... for like $1,000.

439 E Congress: Why Don't We Own This?