Redford, MI

I had a Redford home buyer tell me today that she thought if she bought a house that had non-homesteaded taxes that it would always be non-homesteaded taxes. They didn't want to look at houses with non-homesteaded Michigan taxes because they thought they would forever be paying higher property taxes.

That's not the way it works. A Metro Detroit home becomes non-homesteaded if the property owner does not claim it as their primary residence and claim a homestead exemption.

Examples of when a property is non-homesteaded are:

• a bank foreclosure
• a home that the owner has died
• a home that the owner has moved out of state or out of the country
• a home that is a rental property
• a home that is owned by somebody that has another home with a homestead exemption
• a second home
• a vacation home

Cities only change a home's property tax status from non homestead taxes to homesteaded on May 1. So if you buy a bank foreclosure on June 30 you will have to pay the higher non homesteaded tax rate until next year. On May 1 it would change to homesteaded taxes if you filed the homestead exemption with the city prior to May 1.

So I hope this explanation about Michigan property taxes did explain more about homestead and non-homesteaded taxes. So you can look and buy a home with non-homesteaded property taxes. If you file your homestead tax exemption you will be paying the lower taxes after May 1 rolls around.

More on Livonia real estate, Wayne County real estate, Oakland County real estate

The 3 biggest pitfalls when buying Metro Detroit investment properties are:

A. Under estimating repair costs or not knowing what damages to look for in a home can end up having the investor put too much into a home than it can seller for. A leaking basement wall behind paneling. (Hire an inspector if you are inexperienced) I see thousands of homes a year, but home inspectors always pick up thing I miss.

b. Not knowing the comparables are, what homes are selling for. Banks are very tough on appraisals. You aren't going to be able to sell a home for more than market price if the buyer needs a mortgage. Be realistic and know the neighborhood sales prices. Don't be overly optimistic and over estimate the possible sales price after you fix up the home.

d. Not know what the city is going to require in terms of repair. Cities like Dearborn, Westland, Taylor, Inkster have certificate of occupancy requirement. If the city requires you to replace the driveway because it is all cracked up. It could be $10,000. That could take all your profit.

Thinking about 3 biggest pitfalls when buying Metro Detroit investment properties can help you when picking the right investment properties. Think carefully.

Search Metro Detroit investment properties and get the latest listings emailed to you.

Plymouth Real estate, Livonia real estate, Northville real estate

Union Lake homes for sale

How Michigan property taxes work - the difference between SEV and Taxable value part 2

How long is my pre-approval good for when looking at Metro Detroit homes for sale?

Title insurance explanation - why you need it.

Canton MI data

Redford Township foreclosures.

Redford Township is trying to help the residents and potential buyers through two new programs under SNAP (Stabilizing Neighborhoods Action Plan). These are great plans to help keep Redford a nice town. Plus it helps buyers get a better quality home at a good price. Otherwise the homes would be in disrepair, get a lower sales price, and continue to bring down Redford home values.

1. The Neighborhood Stabilization Program (NSP), through the Department of Housing and Urban Development (HUD), is designed to redevelop, rehabilitate or demolish properties in residential neighborhoods throughout Redford Township. Qualifying NSP applicants may receive financial assistance toward the purchase of a newly rehabilitated home.

2.)Through the Housing Initiative Program (HIP), Redford Township will purchase foreclosed and/or abandoned homes to be rehabilitated and sold to qualifying applicants. These initiatives are important tools for revitalizing our neighborhoods and recovering from the current mortgage/foreclosure crisis.

Don't miss this GREAT opportunity for homeownership. For further information please contact the Community Development Department at 313-387-2786.

If you don't qualify for any of these programs and still are looking to buy a home in Redford give me a call on my cell (313) 310-9855 or join my VIP club to get the Latest Redford foreclosures and home listings.

Livonia Real estate and homes for sale

One of the investment company officials in the article says Detroit is an investors dream. I myself think it will become a nightmare for them and the City of Detroit. Here is my predicition. I believe we will see a fair percentage of these homes coming back up for sale in the next four years once the investors become disenchanted over:

• Detroit's high taxes for investment properties
• The inability to reduce the investment property taxes easily
• Detroit's renter population and the ability to collect rent
• Detroit's theft problem of vacant rental homes. Losses of furnaces, copper plumbing, radiators, and hot water heaters will rack up unexpected costs.
• Management company fees and poor management companies.
• Lack of demand of for the homes because of diminishing prospective renters.

I think after a few years investors will bail out of their Detroit investments creating a problem for the City of Detroit. I think some investors will just walk away from the properties adding to the City of Detroit's problems. If they have no mortgage the City will lose money. They won't be able to collect the back taxes. They won't be able to collect past water bills. Some of them will become uninhabitable, some will have to be demolished.

The ones that have mortgages on them will be foreclosed on. The people that have $45,000 invested in them won't be able to sell them. They are underwater! So what do they do with them. Do they look for another "overseas" or "out of state" investor to overpay for the home. Detroit properties won't rise in value that quick because.

• Banks not wanting to loan small amounts under $25,000.
• Of new appraisal rules and HVCC (These limit how fast home values rise)
• The demand
• The foreclosure process leaning toward cash buyers over mortgages even if they are lower priced.

What I don't know is how many investors will give up or how soon? That is the problem of the future for the City of Detroit.

These are the many reasons why I don't want take "out of Country investors" or "out of state investors" money. My professional ethics won't let me just take somebody for a ride just to make a buck. The media has people around the world hyped that there are easy pickings here in Detroit. I hate to tell you but it's not as rosey as you think. So before you invest research it well.

From a real estate agent at ground level

Metro Detroit real estate investment information

Investing in Detroit real estate isn't for beginners. Part I

Investing in Detroit real estate isn't for beginners. Part II

Investing in Detroit real estate isn't for beginners. Part III

Investing in Detroit real estate isn't for beginners. Part IV