RonEarwaker
New Member
In August last year I purchased a tenanted buy to rent property in Detroit from a company whose business it is to supply renovated properties specifically for investment. In the beginning the house was rented out and I received rental payments ok. After two months I received an email to say that the tenant had disappeared and that they would soon find a suitable person to take over the property as it was in good condition. In January I had an email to say that a prospective tenant had been found. In February I had an email to say that the prospective tenant had had a death in the family and would not be taking up the tenancy. In response to an email I sent in March I was then told that this tenant had "proved not to be qualified"!! In March I reduced the rental by $100 in an effort to facilitate a new tenant. In April I had an email to say that they had found a tenant but the property required €2500 of repair work before the tenant could be accepted. The work was carried out but the prospective tenant disappeared.
I really am at a loss as to how to proceed. When I bought the property I knew that there were risks involved with this type of investment but I never for one moment expected 7 months with no tenant and a bill for $2500. Being a non US citizen living on the other side of the Atlantic also poses significant problems, ignorance of the laws in the US and distance being the two main ones
I have had a property appraisal and a rent schedule done. I bought the property for $51,500 which I thought was reasonable (I am used to European prices that are much higher). The Appraiser has given it a market value of $19,000. That's $32,500 less!!!!
Then we get to the rental schedule. On the property sales details the rent the tenant was paying was $1000 per month but only paid 2 months before disappearing. The Appraiser has given the rent to be $750 pcm. I also note that on the report in capitals it says "THERE IS NO RENTAL HISTORY FOR THE SUBJECT PROPERTY FOR THE PAST 3 YEARS THROUGH THE REALCOMP MLS SYSTEM"
I have spoken to the Appraiser and he says that the property is in "fair overall condition" the condition list being poor, fair, average, good. He said that if this was an appraisal for a mortgage it would have been refused. This is for a property that has been recently updated. The valuation of the property of $19000 is for the current market value and has been judged against other recent equivalent properties sold in the local area (not foreclosures etc) He thinks that this would be the value whether it is tenanted or not. The reason it has not been easy to tenant is because the rent is too high and the area is not very good.
Over all it would seem to me that the property was misrepresented as an investment. What do you think? Any suggestions on where I go from here would be gratefully received?
I really am at a loss as to how to proceed. When I bought the property I knew that there were risks involved with this type of investment but I never for one moment expected 7 months with no tenant and a bill for $2500. Being a non US citizen living on the other side of the Atlantic also poses significant problems, ignorance of the laws in the US and distance being the two main ones
I have had a property appraisal and a rent schedule done. I bought the property for $51,500 which I thought was reasonable (I am used to European prices that are much higher). The Appraiser has given it a market value of $19,000. That's $32,500 less!!!!
Then we get to the rental schedule. On the property sales details the rent the tenant was paying was $1000 per month but only paid 2 months before disappearing. The Appraiser has given the rent to be $750 pcm. I also note that on the report in capitals it says "THERE IS NO RENTAL HISTORY FOR THE SUBJECT PROPERTY FOR THE PAST 3 YEARS THROUGH THE REALCOMP MLS SYSTEM"
I have spoken to the Appraiser and he says that the property is in "fair overall condition" the condition list being poor, fair, average, good. He said that if this was an appraisal for a mortgage it would have been refused. This is for a property that has been recently updated. The valuation of the property of $19000 is for the current market value and has been judged against other recent equivalent properties sold in the local area (not foreclosures etc) He thinks that this would be the value whether it is tenanted or not. The reason it has not been easy to tenant is because the rent is too high and the area is not very good.
Over all it would seem to me that the property was misrepresented as an investment. What do you think? Any suggestions on where I go from here would be gratefully received?
