GM collapse and probably lost tax revenues (as well as other things.) "Exit the Detroit market", pro or con?

Asked by Michiko M, CA, Sun Oct 19, 2008

A client of mine exited the Detroit market due to her belief that GM's downturn will ultimately end up being the death of the City in terms of lost tax revenues (and other stuff like the raising of the property taxes and water bills to her mind.) To my belief, she nor I have enough historical or comparative perspective to understand whether that's to result in some major demise that would bar us from renting smaller homes for a profit (to my mind, a very solid investment strategy if you have good management) or to wait out for a better time in order to sell these homes to a homeowner in the future. What is the opinion out there?

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Maureen Fran…, Agent, Birmingham, MI
Sun Oct 19, 2008
Sales of single family homes have been up in Detroit every month this year (over last year). I am hearing of investors from all over buying these houses. Prices have fallen, so the long term investor, I think there is a lot of opportunity. Your plan sounds like a good idea to me.
Web Reference:  http://miOaklandCounty.com
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Michael Eurb…, Both Buyer And Seller, 19130
Sun Oct 26, 2008
Growing up in rural Texas the one thing you learn early on is that if you follow the herd all the time you're gonna end up stepping right in it.

Maureen is quite right in one regard, I am selling my property in Philadelphia (a market still going up, although slower now) for an extremely high return and investing nearly all of it in Detroit. Basically selling high and buying low again, but more of it.

I am primarily buying rental/income property and given the low prices of the property I can recoup my investment in short order just from the rents I'm not even all that concerned about the eventual resale value. Even so my personal opinion is that in about 5 or 7 years that value will be high enough to make a good return on the property too.

Let others sell low if the want, that's when I like to buy.
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