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It's in Detroit.

   

But in the "better part", right?

That, btw, is awful... I must admit, I have NO clue what Detroit is, looks like or can be...

   

She could try, but maybe find no buyers. The housing market in the states is very depressed all over, that means people aren't buying, not just that prices have dropped. Detroit is the worst of it, because it was in decay mode even during the boom, but I bet there are lots of other places you buy houses for a song.

   

So where are the investors? *stirs pot* The 1%-ers?
Can't "they" buy, upgrade, sell, or rent out? People still have to live, and it might be a way to get the economy going a bit... Not necessarily in Detroit (from what you guys tell me, that place is beyond saving), but anywhere?

If you buy a house for $5k, fix it up for another $20k, and rent it out for $500/mo, you still make a profit, even if you amortized it all the way.

Am I VERY naive now?

   

The problem is the upkeep, Brenda.

In a lot of those areas you could be looking at over $5,000/year in upkeep and maintenance.

Makes the profits disappear very, very fast.

   

They're out there. Canadians too are snapping up homes. (Personally I think it's a very poor idea - we had invested in a townhouse complex, but it was mismanaged and we lost money. Very hard to supervise something like that if you have to fly down there all the time.) I think it only makes sense if you're sure the area will bounce back - so not Detroit. Phoenix is very depressed from what I hear, but, assuming that the US recovers, I think Phoenix will too, until they run out of water. But, somebody who has the smarts and skills could make a lot of money in this if they do it right. As long as your expenses are covered by rent, you just hope for a good boom to give you the profit.

But, I posted an article by an investor who says you want to buy farmland, high end real estate and gold and silver. He says the debts that the US and Europe are carrying can never be paid back except by printing money, and we know where that leads. Personally I can't get all Bart about it - if society sinks I guess I will too.

   

The upkeep isn't really the problem, the problem is getting in people who will pay the rent. Buying investment homes in run down areas is a recipe for disaster. You spent your time chasing people for money or trying to get them evicted.

   

OTI,

Upkeep is a major issue in low-income rentals.

I have just spent a properties entire profit (3 years worth) fixing one house in Edmonton.

I never seem to have that problem in the middle to upper level units.

Only ever the low end units.

In fact, (goes to reference spread sheets), we have spent more on damage repair to our handful of low income properties than we have on all of our other properties combined.

My only recourse is the security deposit (peanuts) or the courts...and what am I going to get from somebody with nothing?

Which is why we are liquidating all of our low end units.

   

Slumlords actually can do very well. Just have to stay on top of the situation, and make sure the city doesn't come after you for repairs, then hope that in time the area gets gentrified. One trick is to get the rent sent to you directly by welfare, the other is to cash the tenants welfare check and deduct a heft cashing fee. Having someone threaten to beat the shit out of your tenants can be helpful too. Seems to work in Vancouver.

To Peck - you're doing it all wrong, see above.

   

I refuse to be a slum lord andyt.

I have a standard that my buildings are kept to. If I can't keep it to those standards (as is the case with low income units) I get rid of them and get more units that fit my company profile.

I find slum lords disgusting and am very grateful that Edmonton is starting to look into them aggressively.

   

Yep, just a joke. But just coming down on slumlords doesn't address the situation. Nobody's in this for charity, welfare rates are inadequate, so there's no way to make a profit running a decent place for poor people. We just get more homelessness, which is one reason Vancouver isn't more vigorous in going after the slum lords.

   

In my experience, it hasn't been the case.

We're currently at 3 homes, with a 4th on the way and in our experience, the only time we get damage in our low-income units is because of lack of supervision and poor screening of our tenants.

We just finished taking some tenants to court that refused to cover some of their bills when they left. But like you said, you can't collect anything from them as they have little to no assets.

   

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