Buy-to-Let Houses

[fido]

I realise this subject is off-topic but no more so than discussions of extreme weather events.
For some time I've been looking to invest in property to get a rental income, to fund my retirement. I have had a search going on Ebay for over a year and it has turned up properties in most corners of the globe but mostly Bulgaria. Now and again there are houses in USA, usually Detroit. I did think about buying a US property, revamping it and offering it to let but there does not seem to be a visa to cover such an activity so I may not be allowed to do that. The prices seem too good to be true so I'm assuming there is just no demand for rented houses. Any advice much appreciated.
I'm getting quite a good return from the money in the bank at the moment so I'm in no rush.

Pardon our interruption...

 

[danemodsandy]

Avoid Detroit!

While there are certainly good properties available in Detroit, the difficulty of assessing a property over the Internet would make it risky to look for one that way.

Detroit is full of very bad neighborhoods that are dying, with residents moving away and owners abandoning properties. In certain areas, the city is abandoning the infrastructure, allowing sewer, electric and gas systems to fall into ruin.

A property that might still photograph decently well could have problems impossible to overcome.

There is also a very big problem for those brave souls who DO try to renovate Detroit properties - theft and vandalism. Houses often get their plumbing and wiring stripped by copper thieves, so those have to be replaced. There are stories about new owners working to replace wiring and plumbing - and having the new stuff stolen half-way through the job. It's not unheard of for a house under renovation to be set afire, either.

Avoid Detroit, unless you have a lot of money and can be present to oversee renovations. There is a reason Detroit properties are so cheaply priced.

 

[hydralique]

Fido . . .

I can't believe the owners are so desperate as to try to flog this poor old house to an unassuming foreigner! Do you have any idea what Section 8 housing is? This program is quite old and designed to provide government assistance for those who cannot afford even modest housing. While some Section 8 tenants are good people there are also way too many who do not appreciate the assistance and are very tough on the properties. Managing these properties isn't easy and you would be at the total mercy of your local managers; Bulgaria could be a cakewalk by comparison.

 

[whirlcool]

Detroit has been trying to improve itself. The city government is tearing down old burnt out and abandoned buildings over the past few years. If you could see the landscape of Detroit near downtown you see a building here and there over a great area with the foundations left from the torn down buildings.

I recently saw a documentary about Detroit and how it got the way it is today. Corrupt government combined with nepotism and loss of jobs over a 30 year period is basically what happened to Detroit. Most of the money destined to operate the city ended up in the hands of relatives of the mayor instead of being used for the city.

One thing that is striking is that so many grocery stores have closed down due to constant robberies it is actually difficult to find a grocery store in Detroit proper.

Now the areas outside of Detroit can be very nice. But I wouldn't put a nickle into Detroit real estate at this time. Maybe in 30 years or so, but not now.

 

[petek]

The  house appears to be (by the red dot) on the map in the Jefferson Chalmers neighborhood on Detroits east side. 

 

If you go on Google maps Streetview to get an idea of the neighborhood type in 885 Marlborough Street and move the little man around up and down the streets to get an idea.. The house you're looking at is somewhere around there.  You should get the exact address. 

 

The main thoroughfare is E. Jefferson Blvd.. move the little man about 3 blocks east along East Jefferson to  Alter Road, that is the dividing line between the city of Detroit and Grosse Pointe Park which is a separate city from Detroit and have their own police, ambulances etc.  

 

Check out this link to Trulia.com     

type in  Jefferson Chalmers, Detroit Mi. and you will get the listings for all the houses for sale in that neighborhood.. 

 

Then change it to Grosse Pointe Park Mi. to see all the houses for sale two blocks away. 

Jefferson Chalmers, Detroit, MI Homes For Sale & Jefferson Chalmers, Detroit, MI Real Estate | Trulia

57 Homes For Sale in Jefferson Chalmers, Detroit, MI. Browse photos, see new properties, get open house info, and research neighborhoods on Trulia.

www.trulia.com

 

[travis]

Detroit is a mess. It was bad twenty years ago and has only gotten worse. What you want is rental property as far away from Section 8 housing as possible.

As previously stated some receiving assistance are good people. The problem is when an entire area becomes Section 8. It becomes a "detached housing project".

I had plenty of trouble keeping plumbing in my last home in St. Louis. I can only imagine trying to renovate and own this type of property from another country.

 

[goatfarmer]

You are in Hungary? And you want rental property in Detroit? What's wrong with this picture?

 

First, how are you going to purchase the property? Over the internet, sight unseen? What about repairs? Pay someone to make them? How about finding quality tenants? Who is going to manage the property, make sure the tenants aren't trashing the place, that the upkeep is done, collecting the rents, etc?

 

How many red flags do you need?

 

[perc-o-prince]

Kenny,

There are responsible rental agents that will take care of just about everything other than buying the property. For their fee, they screen tenants, sign agreements with them and collect security and rent, and manage complaints and repairs (usually with a relative, friend, or his/her company doing the work).

Personally, I'm waiting for my 10% fee for helping a well-meaning deposed princess of Whatsupistan transfer 27 point 5 millions dollars US here so the whomever rebels don't steal it!

Chuck

 

[fido]

Thanks for the replies. I had wondered about security when I saw the bars at the windows. A lot of properties in Barcelona have bars at the windows. I was robbed when I visited Barcelona. My brother and sister-in-law were robbed when they went to Barcelona for their honeymoon.
In terms of access it would make sense for me to buy one or two apartments in Budapest but the rents are very low so the return on investment would not be much more than I get from the bank but with increased risk.

 

[goatfarmer]

Chuck, I understand all about property management companies. My dad had a few rentals over the years. If you get a good one, they do a great job. But the better ones are usually more expensive, which cuts into your profits. And you need to screen the managers, to make sure the one you pick is top notch. Plus long distance landlording usually isn't a good idea,  IMHO, you need to be able to physically inspect your properties at least a few times a year, that's kinda hard for someone living on the other side of the world.

 

A bad idea all around, just my opinion.

 

[fido]

Yes, I also have experience with letting agents, as I need them for my cottage in Scotland. What annoys me is that they like to dictate what I do with my own property. One agent was wanting me to put in new carpets. I had already spent quite a bit on the place so I said I would offer a rent free period to cover the cost of the tenants getting new carpets. They were then saying I should reduce the rent because of the old carpets. I said that I was not willing to reduce the rent AND give a rent free period. They replied that in that case they were unwilling to handle the property.