Scams, ignorance burn foreign buyers of Detroit properties
By Megan Davies
DETROIT (Reuters) - Buying a property in Detroit a few years ago seemed like a steal for overseas investors – as little as a few thousand dollars would get them a house in a city that had hit rock bottom and could only see better times.
Yet the promise turned into a nightmare for many and stories of properties vandalized, ransacked, left untended and un-rentable have sapped the interest from overseas buyers, real estate brokers say.
"The bottom has fallen out of the speculative market," said Darin McLeskey, co-founder of Denovo Real Estate, who said he had received a lot of "cries for help" from investors.
For a city that only emerged from bankruptcy a year ago on Thursday, any setback in the real estate market's recovery could hurt prospects of a sustainable rebound by depressing property tax revenues and making Detroit less appealing to live.
Property tax revenues fell to $100 million in 2014 compared with $183 million in 2006 as a result of population loss and the aftermath of the 2008 credit crisis, according to data from the Citizens Research Council of Michigan. Continued...