I have been looking into starting a new business venture: landlord. For years I have been thinking about buying a rental property, then selling it a few years down the road and making big bucks. One article I read a long time ago said if you buy one house every year for seven years, then sell one house every year, after 14 years you’d be rich! I’m not 100% sure how the math works on that, but the concept stuck with me.
With the Michigan real estate market being what it is today, now seems to be the perfect time to pick up some bargains. At first I limited my search to Southfield near where I live. I know the area very well; I walk the dogs all over our little corner of Southfield every day. I was shocked to find homes listed for under $30,000. My car almost costs that much. Granted, most in this price range have been severely neglected. Others are good homes, maybe need some updating, and they go quickly.
I’ve now widened the search to include Ferndale. In general, the Ferndale homes in this price range have a little less square footage and smaller lots than Southfield, but Ferndale has so much going for it that Southfield doesn’t. A vibrant downtown. Dog parks. Lower taxes. Lower crime.
Don’t get me wrong. Southfield has a lot going for it and you get a lot of house for the money. It’s just a little tougher sell than Ferndale, especially for those not familiar with the city.
As others have been taking advantage of the soft real estate market, it’s interesting to see all the construction going on in the areas where I’ve been looking. Little by little, the neighborhoods are getting spruced up and filled with people.
Since I began the search a couple weeks ago, I’ve looked at more than 20 houses and walked through eight. They’ve all had issues, including strange floor plans, poor foundation, holes in the roof, rotting wood, and my favorite…mold. I’m willing and able to do some work (my husband and my dad are very handy), but from everything I’ve heard, mold is a four-letter word I should stay away from.
I’ve also learned that before a home goes into foreclosure, due to certain Michigan laws, sometimes the mortgage company has to wait six months before they can put it up for sale. In that time span, the utilities are usually shut off, which in the winter, means bursting water pipes. I’ve looked at a couple houses that have been on the market since winter and all of them have water damage and mold, especially in the basement or crawl space.
I’m hesitant to buy a house with a basement, anyway. The house where I grew up in Oak Park had a basement that constantly flooded. I lost all of my high school yearbooks and other memorabilia to water damage. Besides, for many the basement is a place to store the junk you can’t bring yourself to get rid of.
I’m waiting to hear from the real estate agent regarding a Ferndale ranch I wanted to look at the other night but the lockbox was missing, so we couldn’t get in. From looking at the outside, I already know the house needs some work (roof and siding, for sure), but it looks like it could be a really cute house one day.