Monday, May 20, 2019

Open letter to Detroit real estate investors

Detroit homes under construction - Photo by Frank Nemecek

Normally on Mondays, I would publish a Tip of the Week that offers my readers some helpful advice regarding their home, money, or life. Today, however, I want to pass along some friendly advice to those who wish to invest in real estate in Warrendale or elsewhere in Detroit.

A friend of mine works with investors on a professional basis quite frequently. She noticed a mistake that was frequently made over and over by would be real estate developers - especially in the Detroit market. With her permission, I am including her comments below with only minimal editing on my part.

Her comments originally appeared on her personal Facebook page. I am publishing them below in italics.

Dear Detroit real estate investors:

Please, please, please read and ingest this information.

Buying a house that is in decent condition, sitting on it, and waiting for it to inflate in value does not work as well as buying it- putting in new electrical, plumbing- and getting it back on the market.

I promise you...

This is especially true if you’re not here helping the neighborhood you bought in to stabilize. You’re not increasing your value as much as you are paying taxes on a property that will be worth nothing after it’s firebombed or the roof collapses.

Investing is more than buying and sitting on a property. Invest your energy and expertise along with your money.

Thank you!

With this said, I will say that I have shown her thoughts to several people who have made a good living investing in Detroit's real estate market. Every single one of them agreed with this sentiment. Simply holding onto a piece of property isn't going to make its value climb. The financial gains come from getting the property back on the market as a rental or for sale.

With that said, I will simply add that my normal Tip of the Week will return next week.