Detroit, once considered auto nation, has now become landlord nation because of large numbers of potential landlords buying bargain foreclosure homes for investment and rental purposes. Home prices in the city have fallen to low levels because of the high number of foreclosed homes, as shown in Michigan’s high ranking in foreclosures by state lists.
In 2008, more than 106,000 housing units in Michigan received foreclosure notices. With one unit in 309 residential properties receiving foreclosure notices, Michigan was sixth in RealtyTrac’s ranking of foreclosures by state in terms of foreclosure rates. In the month of January this year, Michigan slightly improved, going down to seventh in the ranking of foreclosure rates.
In Detroit, home prices have gone so low that more than 1,800 housing units are advertised for below $10,000. These homes were priced more than ten times more during the housing market boom, when Michigan’s high ranking in foreclosures by state lists in unimaginable. These figures have attracted buyers from as far as Australia and Great Britain.
Detroit real estate broker Mike Shannon said he has just accepted a deal from ten new out-of-state clients looking for as many cheap but good units as he can find. He has sold 30 homes to only one buyer in just one day of talks and has sold 6 units to an investor from England who wants more.
Foreign and out-of-state investors have been attracted to Detroit because of its auto industry background and its landscape which is not dominated by high-rise residential buildings but by single-family homes. They have also been attracted to its numerous foreclosed properties and its bargain prices, prompted by Michigan’s top-ten ranking in foreclosures by state.
Homes sold by the U.S. Housing and Urban Development in Detroit are also being advertised at the very low prices of $6,035. These homes were priced at $8,692 in 2008 and $46,702 in 2003.
California-based Michael Alexander is one of out-of-state investors capitalizing on Michigan’s foreclosures by state. Alexander has purchased more than 150 units in the city and has appointed a Detroit-based property manager to manage the rentals and work with renters interested in eventually owning the homes. Douglass Diggs, the city’s planning director, said they are encouraging tenants to try lease-to-own or rent-to-own contracts so that they could capitalize on low home prices partly caused by Michigan’s high foreclosures by state.
Author Resource:-
John Cutts has been educated in the finer points of the foreclosures market over 5 years. Learn how to invest in foreclosures at ForeclosureHomesInvesting.com.
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