 
Hpgrmln
Member
Username: Hpgrmln
Post Number: 146
Registered: 06-2007
| | Posted on Saturday, September 08, 2007 - 6:50 pm: |    |
Im considering buying property to rent out when I get a little more money saved up. Ive already heard people telling me about how expensive it could be, how much work, etc. as well as how it may not be a successful move in this economy and real estate market....so you don't need to venture there.
What I'd like to know is, if anyone on here has ever rented out property and how to submit it to the government for use in the section 8 program (likely less risk of not getting paid on time).
The other question is, what kind of rules and regulations do different cities require. I know Ill make people unhappy by saying this, but Im not even considering Detroit.Im told the taxes are really high and that the city has all sorts of requirements that put owners through hurdles.
With houses as cheap as they are right now, Im starting to look at whats on the market.I want to take advantage of it but need some pointers on how to do it right.
Also, what areas are likely to attract more tenants? I don't want to buy in an area few people are moving to and have a place sitting there empty. |
Charlottepaul
Member
Username: Charlottepaul
Post Number: 1642
Registered: 10-2006
| | Posted on Saturday, September 08, 2007 - 7:20 pm: | |
"Im not even considering Detroit.Im told...that the city has all sorts of requirements that put owners through hurdles."
VERY TRUE. |
Ray1936
Member
Username: Ray1936
Post Number: 1900
Registered: 01-2005
| | Posted on Saturday, September 08, 2007 - 7:35 pm: | |
I bought a nice clean little bungalow on Burt Road years ago for a rental property/investment. After ten months of chasing the renter for the rent and getting him evicted, I discovered the place thoroughly trashed. Fixed it up and sold it and swore never to do that again. |
Dialh4hipster
Member
Username: Dialh4hipster
Post Number: 2176
Registered: 11-2004
| | Posted on Saturday, September 08, 2007 - 8:30 pm: | |
If you're not considering Detroit, shouldn't this be in the "Connect" or "Non-Detroit" sections? |
Magnasco
Member
Username: Magnasco
Post Number: 230
Registered: 10-2003
| | Posted on Saturday, September 08, 2007 - 8:44 pm: | |
DH4H I was thinking the same thing.
BTW I have had my condo, in Detroit, assessed for sec 8 rental and it only ended when the tenant left to go care for her ill mother. We both wish that she had never given it up. The process was very easy and the tenant was a joy.
(Message edited by Magnasco on September 08, 2007) |
Meaghansdad
Member
Username: Meaghansdad
Post Number: 127
Registered: 07-2007
| | Posted on Saturday, September 08, 2007 - 8:47 pm: | |
Once you fix the house up for rental, go to the Section 8 office and request that they come to give you an inspection. As long as everything is operable, you should be good to go. |
Frumoasa
Member
Username: Frumoasa
Post Number: 52
Registered: 03-2007
| | Posted on Saturday, September 08, 2007 - 9:29 pm: | |
Section 8 can be a great thing because tenants seem to be long term, but this is an instance where diligence at the beginning pays off. Ask for references and check them rigorously, search court records to see if anybody in the house has ever been evicted or had something go to trial like "reckless destruction of property" and make sure you have an crystal clear (# of occupants, pets, smoking, etc...) rental contract on hand. When you find a good candidate, it takes a few months to get the rent checks coming in, so you need to make sure that you have a good renter while you are waiting for the money to come in, because if it doesn't pan out, you don't want to have to evict them and do extensive repairs. If you get a good tenant however, the wait is worth it because they tend to stay for a while and make the house their own. |
Dannyv
Member
Username: Dannyv
Post Number: 12
Registered: 08-2007
| | Posted on Saturday, September 08, 2007 - 11:54 pm: | |
Section 8 was a cancer that moved next door to me and eventually led to me leaving Detroit. The single Mom with a rotating set of temporary Dads worked at an after hours club in the Brightmoor section of Detroit. While she worked late nights, her teenage son ran wild, tagging the neighborhood (Grand River/Telegraph) with BMG graffiti (Brightmoor Gang. With his cohorts, they had a system of high-pitched whistles to signal one another if they ran across something criminally inviting (unlocked door, open window). Whenever I would try to engage the young man in conversation, he would turn away, ignore my existence, no verbal response. Some mornings the police would come to the Section 8 home to let the mother know they had her son in custody. I decided it was time to leave before I became just another statistic in an apathetic city. Your experience as an investor depends on the people who move into your house via the Section 8 program. This was my experience as the next door neighbor of a Section 8 beneficiary. |
Hpgrmln
Member
Username: Hpgrmln
Post Number: 147
Registered: 06-2007
| | Posted on Sunday, September 09, 2007 - 8:05 am: | |
"If you're not considering Detroit, shouldn't this be in the "Connect" or "Non-Detroit" sections?"
Im talking Detroit proper. Im wondering about Warren, Mt. Clemens, or Pontiac right now.I have a feeling, though, that Warren may try to make it really hard, too.
I would consider Detroit if it was a building with 4 or more units. Some of the brick apartments on/near Webb are too tempting |
Bulletmagnet
Member
Username: Bulletmagnet
Post Number: 874
Registered: 01-2007
| | Posted on Sunday, September 09, 2007 - 9:50 am: | |
Dannyv stole my thunder. "Cancer" is the perfect word for these types of people who have no stake in their neighborhood or fellow neighbors. Before we were gunned out of Detroit, the influx of Section 8'ers in our area became apparent with the slow decline in the upkeep of the houses, and the f-upped lifestyle of the tenants. When our neighbor complained to one such tenant about the grass not being cut for several weeks, they responded by promptly cutting it; at 3 in the morning. I have no love for these people, or the landlords who propagate them. |
Kaptansolo
Member
Username: Kaptansolo
Post Number: 243
Registered: 07-2007
| | Posted on Sunday, September 09, 2007 - 10:14 am: | |
Wow!
I have a cousin here in NY who has property out on Long Island and he is actually afraid to rent to working people because they always fall behind in their rent.
He does have some pretty good section 8 tenants and he does do an extensive background check.
What I am going to say here is totally not related to "business".
I think that it is a damn shame that working people who have acquired enough fortune to afford rental property are looking to the government and the section 8 program. I understand the guaranteed money but I am sure some who rent to section 8 are some of the conservatives that I sometimes hear talk about "handouts". What is the real difference? Your business winds up being dependent on "handouts" through someone else.
I am not accusing anyone here of doing this...but, it just makes you think.... |
Oakmangirl
Member
Username: Oakmangirl
Post Number: 304
Registered: 08-2007
| | Posted on Sunday, September 09, 2007 - 10:36 am: | |
Good observation, Kaptansolo. This whole thread belongs under non-Detroit.
Hey, we needed your input yesterday at the subprime thread. |
Paulmcall
Member
Username: Paulmcall
Post Number: 393
Registered: 05-2004
| | Posted on Sunday, September 09, 2007 - 3:01 pm: | |
Another person happy not to invest in Detroit. |
Charlottepaul
Member
Username: Charlottepaul
Post Number: 1647
Registered: 10-2006
| | Posted on Sunday, September 09, 2007 - 5:11 pm: | |
Are section 8 tenants living within Detroit different from ones living in Pontiac, Warren, or Mount Clemens? What I am getting at, is if you were planning on investing in a house Hpgrmln, why does it matter where it is? Won't the government give you the same funds regardless of where the home is? |
Hpgrmln
Member
Username: Hpgrmln
Post Number: 149
Registered: 06-2007
| | Posted on Sunday, September 09, 2007 - 6:24 pm: | |
I know someone who has multiple houses in Detroit. He told me once he wanted to sell them because the city taxed him so much and put so many stringent rules with certificates and everything. I was just thinking some of the other cities in our area might be more relaxed and not give you a headache every year.Im sure the politics differ from city to city. Are the tenants different? Probably not. But the political aspects of the buisness likely are. |
Yelloweyes
Member
Username: Yelloweyes
Post Number: 183
Registered: 02-2007
| | Posted on Sunday, September 09, 2007 - 7:18 pm: | |
I have a very good friend that purchased three rentals a few years back. He is now so far in debt that he is considering bankruptcy. None of his rentals are section 8, but he can't get anyone to pay rent on a consistent basis in the hood. |
Charlottepaul
Member
Username: Charlottepaul
Post Number: 1685
Registered: 10-2006
| | Posted on Friday, September 14, 2007 - 7:19 pm: | |
How's it working Hpgrmln? |
Ndavies
Member
Username: Ndavies
Post Number: 2770
Registered: 10-2003
| | Posted on Saturday, September 15, 2007 - 9:58 am: | |
The other issue is while you're fixing the place up, You're going to have to live there.
I have a friend who inherited several properties from his father about 3 years ago. While he has been able to keep one of the properties rented, the other 2 are a real struggle. One house has had it's plumbing stolen 3 times. Copper twice and PVC the third time. The only way to keep the scrappers out is to move into the building.
His only reliable tenant was section 8. He recently sold 2 of the three houses in the city. He's having trouble selling the home that keeps losing it's plumbing. |
Charlottepaul
Member
Username: Charlottepaul
Post Number: 1686
Registered: 10-2006
| | Posted on Saturday, September 15, 2007 - 12:35 pm: | |
There is a market for scrap PVC these days? |
Renfirst
Member
Username: Renfirst
Post Number: 48
Registered: 12-2006
| | Posted on Tuesday, September 18, 2007 - 3:33 am: | |
hpgrmin,
If you're pulling permits, as I hope you are, you're dealing with the same thing all around. It just all depends on what kind of a property you're looking to buy, and what improvements it needs. One thing I can tell you, avoid Dearborn/Dearborn Heights. Their city inspections are brutal. You won't get around anything (which frankly I respect, they've done a great job of ensuring properties are renovated the right way).
Right now is tough as a property investor. There really aren't "hot" spots to buy. You may see people screaming about all the great deals out there, but the problem is, if you don't have the $$ yourself to buy, good luck finding financing. I do marketing for a renovation lender and every week I get word of some lender cutting investor financing from their product line. If you're looking to finance your purchase, I'd make sure you've got a good chunk saved up, you'll need it. |
Hpgrmln
Member
Username: Hpgrmln
Post Number: 174
Registered: 06-2007
| | Posted on Tuesday, September 18, 2007 - 7:35 am: | |
Ive seen ads for houses in Dearborn and there was so much permit/paperwork jargon I couldn't understand what they were saying. Im avoiding that area anyway because it is reportedly very flood-prone so Im guessing insurance would be very expensive, not mention the risks themselves when it rains.
I probably have $1-2000 to go before I can buy anything. There are so many good deals out there its so tempting.But yes, I probably would have to finance.
As far as the kind of property, Im finding small houses I like in the north end of Pontiac. Houses for $65,000 in good condition, that seem to be in "stable" areas-People moving in when someone else moves out. Its still pretty intact and some of the property seems really-well priced. |
1953
Member
Username: 1953
Post Number: 1457
Registered: 12-2004
| | Posted on Tuesday, September 18, 2007 - 8:52 am: | |
I rented to a low-income friend and his family for one year. When they moved out, I found that the place was in ok condition, but they clearly hadn't done any cleaning in places where it matters most, like the bathroom or kitchen. By contrast, I am now renting to some ex-suburban friends of mine, who have spruced the place up so much that I'm jealous of them living there.
My house is in Hamtramck, where the city has an excessive laundry list of codes, should you be so dumb (as I was) to tell them that you are renting property there. I see code violations at rental units left and right, but my property gets threatening letters in the mail about the slightest infraction, since I was dumb enough to register as a rental unit. |
Hpgrmln
Member
Username: Hpgrmln
Post Number: 176
Registered: 06-2007
| | Posted on Tuesday, September 18, 2007 - 5:13 pm: | |
1953-
How high are the taxes in Hamtown?
I would consider that area, since multi-family housing is affordable there and the neighborhoods appear to still bring in new residents regularly.
Is it true that Hamtramckians have to pay TWO taxes? Detroit city tax and Hamtramck tax? |
Lefty2
Member
Username: Lefty2
Post Number: 167
Registered: 07-2007
| | Posted on Tuesday, September 18, 2007 - 9:40 pm: | |
section 8 = losers
if you have to depend on the gov't to pay bills
your done |
Renfirst
Member
Username: Renfirst
Post Number: 49
Registered: 12-2006
| | Posted on Wednesday, September 19, 2007 - 3:42 am: | |
hprgmin,
we're having a how to buy a foreclosure workshop next week in farmington hills, if you're interested let me know and I'll forward you the information. it's not really geard towards the investor, but if you're looking for basic information on how it works, etc. it should be helpful. |
Hpgrmln
Member
Username: Hpgrmln
Post Number: 178
Registered: 06-2007
| | Posted on Wednesday, September 19, 2007 - 6:31 pm: | |
Thanks for the invite, but I should be ok. An immediate relative is a realtor, they just aren't up on all the aspects of renting/leasing. as far as purchasing, I also have a mortgage broker in the family so in those aspects Im fairly well connected. |
Frumoasa
Member
Username: Frumoasa
Post Number: 67
Registered: 03-2007
| | Posted on Thursday, September 20, 2007 - 4:19 pm: | |
Here is my own self discovered list of cities with brutal code enforcement:
Dearborn: Absolutely brutal, the bond they make you post prior to repair can be up in the hundred thousands which means you have to put $10,000 out of pocket just for the right to start remodeling.
Lincoln Park, Melvindale, Warren, Hazel Park, Eastpointe and Troy do not have an across the board "If it's a repo it gets tagged" approach, but once a house gets tagged, you are in a world of hurt because they will be on you for every little thing. Do not buy a house that is tagged in any city, but these cities are pretty adamant about tagging an unoccupied house.
Pontiac has a mandated inspection and they selectively enforce who they pick on, but if you do things discreetly and play stupid, they're too understaffed to really harass you.
Good cities for code enforcement: Southfield, Hamtramck, Madison Heights, Redford. If you are doing things discreetly, they don't bother you. Just don't leave a dumpster in front of the house for 2 weeks.
The city of Detroit has those stupid ACR requirements, but if you don't bother them, they don't bother you. They currently have 50,000 properties in the city that they have not certified post-ACR. They're swamped, so unless you have sucky neighbors, you can do repairs in peace.
Disclaimer: When I talk about repairs, I mean repairs. Do not attempt any additions or other permit requiring work without a permit because that is a sure fire way to lose your certificate of occupancy. You do not need a permit to repair drywall, put new tile or flooring in or other common rental house repairs. Also, if you are worried about them tagging your house, live in it. There is an expedited process to tag an unoccupied house. It is a lot more work to revoke a cert. of occupancy on an occupied house, so move a bed in and live there if at all possible. I learned this by experience: I was my parents' house sitter for quite a few houses. One time I was "living" at a house and code enforcement knocked on the door. I answered it politely and said "Thank you for welcoming me to my new home. I really like it here." They never came back. Haha! |