Do you want to diversify your portfolio? Investing in single-family homes in Detroit is a great way to do it! Learn more about investing in single-family homes in our latest post!
While many people invest in the stock market or business ventures, investing in real estate is one of the best ways for someone to build wealth. Investing in a single-family home is one of the most popular and straightforward ways to invest in Detroit real estate. Keep reading to learn more before you buy a house in Detroit!
Finding The Right Tenants
When renting out any property, it’s important that you have the right tenants in there. Ideally, you are looking for someone who is low-maintenance and who wants to stays for the long term. Aside from choosing the right property, choosing the right tenants is the most important part of being a landlord.
To find great tenants, it is important to advertise where they are looking. Many people use Facebook as people are on there anyway. You’ll want to try to reach as many people as possible so you can have your pick of available applicants. Once you have a good pool of people, you will want to carefully screen them. They might seem great in person, but when you realize they have poor credit and many unpaid bills, you may find that they aren’t able to pay the rent on time either. Don’t rush just to get somebody in there, take your time and ensure you rent to someone who will treat the property respectfully and will want to stay there for a very long time.
When going into buying a house in Detroit, you’ll need to know a lot more than just the sale price. You’ll want to know exactly what things will cost to fix. Repairs are one of those costs that can quickly snowball, so if you aren’t well-versed in construction, you’ll want to make sure you have someone on your team who is. Take the time to get a professional estimate so you don’t find yourself in over your head. One repair can lead to another, so be sure you have some extra cash around for these unforeseen, yet often much-needed, repairs.
Your End of The Deal
As a landlord, you will need to do much more than just buy a house and get some tenants in there. The property needs to be properly maintained, and your tenants need to feel comfortable and happy. Don’t delay repairs or fix things up so cheaply that they immediately break again! When you properly maintain the home, you will be able to secure high-quality tenants, that want to stay with you for a long time. Make them feel as if they are at home even if they are just renting from you. Being a slum-lord or not taking care of your assets can quickly ruin your reputation as an investor in Detroit.
No matter how happy you keep your tenants, at one point or another, you’ll have to deal with vacancy. Hopefully, the property only becomes vacant after a lease has expired and not because someone broke the lease or you had to deal with an eviction. When you know it is coming, you can plan ahead to negate the loss as much as possible. As soon as you know your tenant will be leaving, you’ll want to get the word out about your available property. Check with your tenant to find out if they are ok with people seeing property before you list it for rent. Hopefully, your tenants will work with you to allow the place to be seen when they aren’t around, so you can get new people in there as soon as they move out. Unlike a multi-family investment, when your single-family home becomes vacant, you are losing 100% of your rental income, not to mention taking care of all of the bills for the home. With a multi-family property it is rare that all units will become vacant at the same time, giving you a bit more security in this department.
Watch Out For High Interest
Buying an investment property is a bit different from buying a single-family home for yourself. Financing can be more difficult to obtain and the interest rates can be through the roof. When an agent is involved in the sale, the prices go up even more. But when you work with a professional property buyer and seller in Detroit, you’ll be able to find a rental property in Detroit at a much lower price than the MLS. You can opt to buy outright so that you aren’t losing your profits to high-interest rates.