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UtahRealEstate
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@utahrealestate
Join Date: 2015
Post Count: 9
November 2, 2016 - 12:09 pm
Yes, stay away from Detroit. No matter how inexpensive the properties may be. The same can be said of anywhere in the “rust belt.” The rust belt starts in Michigan and makes a “U” pattern down through the east side of Illinois, the top of Indiana, Michigan, the top of Ohio, and up through western Pennsylvania and western New York state.
UtahRealEstate
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@utahrealestate
Join Date: 2015
Post Count: 9
October 29, 2016 - 1:33 pm
The companies you have to watch out for are the companies that try to “sanitize” real estate. “We will make real estate easy for you.” They say things such as, “We have rehabbed this property with manager and tenant in place. You can pay us cash for the property, or we will act as your bank.” The problem with this is that they property is in a bad neighborhood in a bad part of the city. The company bought the property dirt cheap, threw enough money it in it to make it habitable, and then sell it to you at an overly-inflated price. After 12 months the property management company’s lower negotiated management fee jumps up to standard rates and now the property doesn’t cash flow.
Real estate is not easy. It is dirty and messy. If you want sanitized real estate, purchase a REIT. It takes a good property manager to manage the property properly, but you need to do your homework. Research market prices, market rents, vacancy rates, and good neighborhoods vs bad neighborhoods. A good property manager can also help you understand this information before you invest.
- This reply was modified 8 years ago by UtahRealEstate.
UtahRealEstate
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@utahrealestate
Join Date: 2015
Post Count: 9
October 28, 2016 - 3:35 am
This is a very good article about the oft-made mistakes of Aussie investors investing in the US.
10 Rental Property Red Flags
UtahRealEstate
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@utahrealestate
Join Date: 2015
Post Count: 9
January 10, 2016 - 10:07 am
This is a great idea Peter. I’ve seen too many Australians invest in bad US markets because of shady promoters. The sad part is that there are many US markets and sub markets where properties keep hold their values, vacancies are low, tenants pay on time, and cash flow is easily found.
UtahRealEstate
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@utahrealestate
Join Date: 2015
Post Count: 9
October 13, 2015 - 4:22 pm
Go to: http://www.bestplaces.net/city/michigan/detroit
1. On the Detroit overview, look at the -23.8% loss in population. The population of Detroit is pouring south into Ohio.
2. Under the Economy link on the left column, the unemployment rate of Detriot is 14.5%. The US average is 6.3%.
3. Under the Housing link on the left column, the vacancy rate in Detroit is 28%. A vacancy rate of 8% is one month empty/year. A vacancy rate of 28% is over 3 months vacant.
These are just a few of the reasons why investing in Detroit, or any city in the rust belt surrounding the Great Lakes does not make financial sense.
Happy Investing.
UtahRealEstate
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@utahrealestate
Join Date: 2015
Post Count: 9
October 13, 2015 - 11:36 am
Run, run away from Detroit! I can show you three different reasons why investing in Detroit is a bad idea.
UtahRealEstate
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@utahrealestate
Join Date: 2015
Post Count: 9
October 13, 2015 - 11:23 am
I hate the phrase turn key. When I hear the phrase, it is like listening to the screeching of fingernails on a chalkboard. I believe that there has probably been as many investors hurt by in investing in “turn key” properties than were hurt investing with Bernie Madoff.
What does the phrase “turn key” mean? It doesn’t mean anything. I stick a key in a lock and turn the knob that lets me into my house. This is where any similarities with anything to do with real estate end.
There is nothing turn key about real estate. In order for real estate investing to be profitable, the property has to be managed by a competent manager. Competent property management is the last necessary ingredient in the real estate success recipe that includes real estate price analysis, economic analysis of the market, rental market analysis, and property inspection.
Turn key is a phrase bandied about by shady marketers use to lull want-to-be real estate investors who don’t want to take the time to become educated in that particular market, into believing that investing in real estate is easy. It is not. Someone has to be doing the day-to-day “heavy lifting” of the property. Rent collection, evictions, move-in/move-out inspections, cleaning, repairs and maintenance, etc. are a short list of the responsibilities of a property manager.
The phrase can be attached to anything building in any condition, in any circumstance. Here’s an example. Next to a main artery into one of the cities in which I invest, I have watched a vacant building for several years which used to house a restaurant for probably 20 years. The restaurant fell victim to changing demographics, changes in available local cuisine, and urban blight. The building sat empty for a few years. One clever real estate agent placed a sign on the building reading, “Turn key” restaurant space.” During the subsequent five years the building has housed three different restaurants and is now empty again.
Obviously there is nothing “turn key” about that particular location.
Remember, when you hear someone touting “turn key,” think to yourself, “This guy is a tur-key.
Good Luck and Profitable Investing
Ryan
UtahRealEstate
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@utahrealestate
Join Date: 2015
Post Count: 9
September 30, 2015 - 3:28 am
I would be happy to talk with you and share Internet tools I use when identifying and understanding US markets. We can find a time that works best to Skype. Feel free to send me a private message.