Appreciation Expectations / Exit Strategies
Economic and real estate outlook
Despite some initial signs of recovery, the economic forecast for the Detroit area does not point to the economy returning to pre-2007 levels immediately. While some sectors (tourism, the film industry, construction, for example) appear to be growing, the automobile industry - the heart of Detroit business and therefore Detroit's economy, remains no longer in danger of dying, but decimated.
The news for real estate investment, however, is considerably better. The banks still have a large inventory of foreclosed homes to sell at hugely reduced prices and initial investors, such as Smart Homes, are providing further opportunities to participate.
Detroit residents whose homes were foreclosed are turning to the rental market. Homes in Smart Homes Investments' current inventory that have been rehabbed and rented are bringing in gross monthly rents in the $600 - $1,250 range.
As with any investment, there are no ironclad guarantees. However, there is general agreement that real estate prices have bottomed and can only recover in the months and perhaps years ahead. The fact that real estate sales volume increased 23% from April/08 to April/09 is a positive indicator.
Selling your investment property
Because we buy so well, we anticipate double to triple digit gains in your investment over time. When you decide to sell your investment home, Smart Homes Investments Ltd. can assist you to find a buyer.
The taxes on the gain you have received will depend on the specific tax regulations applying to your sale - both in the U.S. and your country. Smart Homes Investments Ltd. employs tax accountants fully versed in both U.S. and foreign law as it applies to real estate sales and their professional knowledge can be made available to you.
The first step in this option is to strike an agreed selling price (value) of the house between you, the owner, and the rent-to-own owner. The rent-to-own owner pays a deposit up front (usually $3,000).
The rent-to-own owner pays an agreed monthly rent, usually $600 to $800, for a 6-10 year period until the full purchase price is paid. The rent-to-own owner is responsible for all taxes and house repair and maintenance.
Advantage to you:
You receive a lump sum in addition to rental income. The rent-to-own owner pays 100% of the taxes and maintenance costs. In the case of default on the part of the renter, he can be evicted and the owners retain any monies the renter has paid.
Disadvantage to you:
Monthly rental rates are lower than those of a full renter. When the tenant has made the final rent-to-own payment, ownership transfers to tenant and revenue flow ceases.