Relatively cheap Detroit homes and dreams of making money on them has lured investors from around the world, sometimes with nightmarish results.
John Gallagher of the Detroit Free Press writes:
Danny Kwanten, a factory manager in Hoeselt, Belgium, is one of dozens, perhaps hundreds, of Belgian citizens who bought single-family houses in Detroit over the last few years with expectations of 10% to 15% annual returns renting out the houses to Detroit residents.
Only after he had plunged more than $80,000 into his two houses did the problems start to crop up — tenants who didn't pay the rent, costly repairs to bring the supposedly perfect houses up to code and, of course, high property taxes.
One of Kwanten's houses, at 3250 Webb on the northwest side, today sits empty and dilapidated, with a damaged porch roof and a broken front window. It is one of many houses on the block that appear blighted and abandoned. The Trulia online real estate service lists median asking prices in the neighborhood at $18,000, among the lowest in the city.
Kwanten reckons that he's out about $60,000 on his investment by now, once he nets out the small amount of rent he collected versus his expenses. He would like to recoup some of his cash by selling his two houses and is exploring options.
Gallagher notes that Belgiums aren't the only ones buying up homes. Investors from as far away as Australia and China have done the same, as well as California, without ever actually seeing more than just a photo.
