Looks like investors from the whole country and even the whole world have Cleveland and suburbs of Greater Cleveland on their shopping list. I don't blame them. Cleveland is beautiful!
As a Real Estate professional and a resident of Greater Cleveland I am very glad that people invest in Cleveland Real Estate. I am glad even more that people buy houses and condos not for a future profit but for today's living. I am happy that there are buyers with a strong purchasing power and a very good holding power.
The reason I mention a Holding power is simple. Cleveland Real Estate market circa 2009 offers incredible opportunities for the buyers of all levels of income and life styles due to a big inventory of foreclosures and short sales. Buyers should remember however that holding Real Estate means not only ability to make mortgage payments. It also means having a financial power to pay Real Estate taxes, insurance, to make necessary maintenance, repairs, and to keep up with the neighborhood life style.
Quick example. You can buy today a very decent all brick single family home in Shaker Heights for $35,00 - $55,000. Sounds tempting, doesn't it? Looks like you can easily afford this house if you have any permanent job. You can afford it but CAN YOU HOLD IT?
Shaker Heights has one of the highest property taxes in Cuyahoga County. More likely, the assessed value of the house which you have a chance to buy for under $50,000 is over $150,000 - remember, you've got a great deal! That means that your Real Estate property taxes will be about $5,500 per year. Sounds tough, huh?
Shaker Heights has Point of Sale inspection and very strict escrow rules in case if City inspector identified the violations. Escrow account should be 150% of estimate cost of repairs. Let's say that you are lucky enough to get the house with a very modest list of violations. Even if your contractor, who should be registered with the City od Shaker Heights gives you an estimate for $10,000 you will hold in escrow $15,000 until the job is completed and property reinspected by the City.
Work with a reliable Real Estate expert who will help you define your buying and holding power, who will guide you through the whole process, who will negotiate strongly on your behalf, who will give you a solid advise on first-time buyers tax credit.
Buy smart, buy responsibly, and buy now. It may be your life-time opportunity. Don't miss it but don't overestimate your holding power.
Few simple rules of investment in Cleveland Real Estate
Are all Foreclosure "Deals" equally great?
Need a good home in Shaker Heights?
Want to buy with confidence?
Please call Svetlana 216-548-4663 or e-mail to: Realty@Local-n-Global.com.
Hi Svetlana. Wow, that rule of assessing it higher than the current market value in Year One is a tough one to get through. Something to consider in being affordable to "hold."
Does the County ever let anyone petition to have their property value lowered? In Franklin county a homeowner can petition for this. They don't always work, but sometimes they do. I have sold some real estate in other counties that go off of the new sales price for their valuation.
Hi Gary - overassessment of our RealEstate is a big problem for many homeowners. For the Year One of new homeownership it might be a huge challenge. Problem is that all these Deals in reality cost more than buyers pay for them. That's how tax asessors see it, too. Even if you are lucky enough to steal this property for nothing that does not mean that true market value is what YOU paid for it.
Michael - sure we in Cuyahoga County can contest the true market value of our properties in order to lower the taxes. Board of revision accepts the complaints between December 1 and March 31 of each year. Many homeowners successfully lowered the property taxes. However, the point is that if you are fortunate to buy the house worth of $150K for $50K, you should be prepared to hold all expenses related to ownership of $150K property.
Svetlana, Very good and timely post. I did talk recently to a want to be investor who purchased a property at a tax sale. They thought was a home only to find out that it was only a vacant lot because the homes had be torn down. Maybe she was luck because if she had been the owner of record before the homes were demolished, I believe she would have been libel for the demolition costs.
Tim - this investor was lucky. You are right, he could've ended up by being liable for demolition and God knows what other costs including former liens, penalties, unpaid water bills, etc.
We had too many people with not enough holding power - isn't it why we have all these tax auctions, foreclosures, etc.?
Thanks for your comment.