R
RonMurcia
New Member
Hi all.
I would like to share an experience with you. With these days of very low interest rates many people are looking to land lording to get a better return. Me too. I saw an advert for tenanted property in Detroit for very little money (by European standards) with amazing returns of $1000 per month in rent with 16% net return. I looked at the sales literature and could not believe that I could get a refurbished 4 bed 1.5 bathroom property for only $51500 (£31212) It sounded too good to be true. Guess what, it was. I bought the property from the management agent and all went well for a month or two then I got an email to say the tenant had disappeared. That was November last year. Since then all I have been getting is excuse after excuse. A year on from the date of purchase I get an email asking me to sign a new management agreement. Needless to say I didn’t sign. As you can probably guess I was getting just a little suspicious by now so I arranged for the property to have an assessment. (For those that don’t know an assessment is where a professional looks at the property and gauges is general condition and values the property) Well he gave the property a value of $22000 and the rent suggested was $750. He also said that if the assessment had been for a mortgage it would have been refused due to the generally poor condition of the property. He also suggested that it would be worth my while having a full property inspection. (An inspection is where the property is looked at in detail and things like the electrics, plumbing, heating are tested, the roof is checked etc etc.). In the mean time I received an email to say that a tenant had been found but they could only pay $750 and wanted to move in within 3 days. I managed to arrange the inspection on short notice and when I got the report I could not believe it. Nearly all the advertised refurbishments had not been carried out and the house was in a dangerous condition. The boiler was badly corroded and the water heater was so old that it should never be used again. The list was endless. All of these things were supposed to have been part of the refurbishment and had not been carried out. I quickly informed the management agent not to let the new tenant move in as I didn't want to be liable for any injuries sustained.
The purpose of this post is to warn people who are hoping to be long distance landlords to be very vigilant. Do not believe the sales information EVER. Have a quick look on the Zillow web site. I know it’s not very good but it will give you a rough guide to sale prices/rents in the area. If you can’t go and look at the property yourself get the property assessed and inspected. It will cost about $750 for both depending on the location and size of the property. Believe me it is well worth it.
There are loads of villains out there just waiting to take advantage of the unwary. SO BE WARNED
I would like to share an experience with you. With these days of very low interest rates many people are looking to land lording to get a better return. Me too. I saw an advert for tenanted property in Detroit for very little money (by European standards) with amazing returns of $1000 per month in rent with 16% net return. I looked at the sales literature and could not believe that I could get a refurbished 4 bed 1.5 bathroom property for only $51500 (£31212) It sounded too good to be true. Guess what, it was. I bought the property from the management agent and all went well for a month or two then I got an email to say the tenant had disappeared. That was November last year. Since then all I have been getting is excuse after excuse. A year on from the date of purchase I get an email asking me to sign a new management agreement. Needless to say I didn’t sign. As you can probably guess I was getting just a little suspicious by now so I arranged for the property to have an assessment. (For those that don’t know an assessment is where a professional looks at the property and gauges is general condition and values the property) Well he gave the property a value of $22000 and the rent suggested was $750. He also said that if the assessment had been for a mortgage it would have been refused due to the generally poor condition of the property. He also suggested that it would be worth my while having a full property inspection. (An inspection is where the property is looked at in detail and things like the electrics, plumbing, heating are tested, the roof is checked etc etc.). In the mean time I received an email to say that a tenant had been found but they could only pay $750 and wanted to move in within 3 days. I managed to arrange the inspection on short notice and when I got the report I could not believe it. Nearly all the advertised refurbishments had not been carried out and the house was in a dangerous condition. The boiler was badly corroded and the water heater was so old that it should never be used again. The list was endless. All of these things were supposed to have been part of the refurbishment and had not been carried out. I quickly informed the management agent not to let the new tenant move in as I didn't want to be liable for any injuries sustained.
The purpose of this post is to warn people who are hoping to be long distance landlords to be very vigilant. Do not believe the sales information EVER. Have a quick look on the Zillow web site. I know it’s not very good but it will give you a rough guide to sale prices/rents in the area. If you can’t go and look at the property yourself get the property assessed and inspected. It will cost about $750 for both depending on the location and size of the property. Believe me it is well worth it.
There are loads of villains out there just waiting to take advantage of the unwary. SO BE WARNED