Faro Labs / Markets / Detroit, MI
Detroit real estate investment market
What a typical rental in Detroit, Michigan costs, rents for, and returns: underwritten by Faro's own engine, not a scraped summary.
Returns assume 20% down at 6.75% over 30 years, 7% vacancy, and standard operating costs: Faro's default assumptions, the same ones every report starts from. Home value and rent trends as of 2026-05-31.
Cash-flow market
A typical Detroit rental covers itself: $76,466 at $1,346 a month leaves $550 after the mortgage and operating costs. The return here is money arriving monthly, which you can verify, rather than a bet on prices.
The price a deal actually works at
Faro models five price points for Detroit, from a weak buy to a strong one. The market-rate deal is $76,466; a good buy is $68,819 and a great one $61,173 roughly 20% below market value. Those are the bars a specific listing gets measured against when you run it.
How Detroit compares
Of the 210 markets Faro publishes, Detroit is the 210th most expensive to buy into: 81% below the median covered market, and the 1st strongest on rent-to-price. Within Michigan it's the 3rd priciest of 3 markets we cover. On the last year of home-value change it ranks 209th.
A typical property here clears $550 a month at market rent, so it could absorb a rent drop to about $667 before it stopped covering itself.
What each tier costs in Detroit
Faro models five price points per market. A listing gets measured against these bars, not against a national average.
| Tier | Purchase price | Market rent | vs. market rate |
|---|---|---|---|
| Weak buy | $84,113 | $1,279/mo | +10% |
| Fair buy | $80,289 | $1,319/mo | +5% |
| Market rate | $76,466 | $1,346/mo | — |
| Good buy | $68,819 | $1,413/mo | -10% |
| Great buy | $61,173 | $1,481/mo | -20% |
A typical Detroit deal, underwritten
The market-rate property above, run through the same engine every Faro report uses.
| Purchase price | $76,466 |
|---|---|
| Monthly rent | $1,346 |
| Cash required (20% down + 3% closing) | $17,587 |
| Net operating income | $11,365/yr |
| Monthly cash flow | $550 |
| Cap rate | 14.9% |
| Cash-on-cash return | 37.5% |
| DSCR | 2.39 |
Values are falling here
Home values in Detroit moved 7.4% DOWN over the last year, measured as the median across 26 ZIP codes. That reverses the usual argument for a low-cash-flow buy: there's no appreciation currently carrying the deal, so a property here has to earn its keep on rent, and a typical one produces $550 a month. Falling values also mean today's comp-supported price is a moving target. The discount you negotiate matters more than usual.
Rents are climbing faster than prices
Rents rose 3.1% over the last year while home values moved down 7.4%: a 10.5-point gap. When rent growth outruns price growth, yields improve without you doing anything: the same $76,466 property collects more each year against a price that hasn't moved to match. It's the rarer of the two directions and it's what turns a marginal market into a workable one over a hold.
One of the cheapest ways in
At $76,466, a typical Detroit property costs 80.7% less than the median market Faro covers: 210th most expensive of 210. Cash required at 20% down plus closing is about $17,587, which is what makes markets like this the usual starting point for a first rental. The trade is management: a cheap property is not a cheap property to run, and the fixed costs, a roof, a furnace, a turnover, are the same dollars against a much smaller rent.
Detroit investor questions
Is Detroit a good place to buy rental property?
A typical Detroit rental at $76,466 renting for $1,346 a month returns 14.9% on a cap-rate basis and clears $550 a month at 20% down. Individual deals vary far more than markets do, which is the whole reason to underwrite a specific address.
How much cash flow can you get in Detroit?
About $550 a month on a typical property at market rent, on roughly $17,587 of cash invested: a 37.5% cash-on-cash return before appreciation or loan paydown.
Are Detroit home prices dropping?
Yes: values moved down 7.4% over the last year, taken as the median across 26 ZIP codes in the city. That makes the price you negotiate matter more than usual, since the comp-supported value you're measuring against is itself moving.
How much do you need to buy a rental in Detroit?
About $17,587 at 20% down plus 3% closing on a typical $76,466 property: one of the lower entry points among the 210 markets covered here.
Other Michigan markets
Run the numbers yourself
A market average is not a deal.
Paste a real Detroit listing and Faro underwrites that specific property from its own comps, with a target price you can actually offer.
Estimates for analysis and educational use only: not financial, investment, tax, or legal advice. Verify every number independently before making a purchase decision.