I’ve been spending more time than I probably should on Zillow, dreaming about building a real estate empire. Ever since Detroit declared bankruptcy, I started wondering if things might get better for the city or if it’s destined to face ongoing economic struggles. I first looked into properties in Flint about seven years ago after hearing Michael Moore talk about the real estate crisis in one of his movies. Unfortunately, there’s still no improvement.
If you believe that real estate will appreciate someday, or at least that the land is worth something, then go ahead and take that $100 bill out of your wallet and buy a house in Detroit!
Here’s a house I found after just two minutes of searching.
I love the estimated mortgage payment of $0, but it’s worth noting that the owner bought it for $600 18 months ago and is now taking an 83% loss. From the looks of it, the property needs a lot of tender loving care, or maybe even a complete teardown. Just replacing the front door would cost you more than $100! It’s amazing to me that these houses don’t sell for at least the construction cost. In Guatemala, people would be tearing them down and selling the scrap wood, metal, and any other salvageable materials.
There’s actually a larger selection of properties under $1,000. If you’re feeling a bit more extravagant, you can pick up a nice little brick house with a lovely garden for $1,250.
For those of you in New York and California, that’s not even the cost of a month’s rent! This one looks pretty cozy and is in much better shape than the $100 house. If you can rent it out for $200 a month, your tenants will have covered your investment in just six months. Now the big question is: are there any tenants left in Detroit? If I had to live there for some reason, I’d definitely buy a house. Even as a student, buying this $1,250 house and living there for five years of college would mean spending just $20 a month on accommodation. Need cash for a down payment? You can always qualify for a title loan and get your money fast!
Then there are the taxes. Detroit is bankrupt, so for the few who do pay, taxes must be sky-high. The heating bill during those long winter months will also be much more than $20.
I also wonder where all those people went, and if neighborhoods feel like ghost towns. Check out this house below—it’s really nice and pretty expensive by Detroit standards. There are still chairs on the terrace and a car in the driveway, and the garden is lovingly maintained. With all the stonework, brick chimney, and tile roof, there’s a lot of value in the materials alone, much more than $17,900.
UPDATE: This house is actually just $1. I’m sorry for trying to sell you such pricey houses earlier. Still, it’s been on the market for two years…
So, what do you think? Would you buy a $100 house or a cheap foreclosure to invest in?