Detroit, MI — Rental Investment Analysis
🟢STRONG— excellent cash flow marketData: HUD FMR FY2024 + Zillow ZHVI April 2026 + Freddie Mac rates. Last updated June 2026.
Investment Summary
As of 2026, Detroit, MI has a median cap rate of 14.4%, making it one of the top cash-flowing rental markets in the United States.
Detroit is one of the strongest cash flow markets in the data. With a median home price of $89,148, entry costs are low — making it accessible for beginning investors or those buying multiple properties. With 3-bedroom rents around $1,400/month, the 14.4% cap rate tells the story. A typical rental here cash flows +$604/month after all expenses — strong passive income from day one.
The market passes the 1% rule (1.63%), which is increasingly rare and signals strong rent-to-price fundamentals. DSCR of 2.25 means the property's income comfortably covers debt service — DSCR loans should be easy to qualify for here.
Bottom line: Buy here if you want reliable monthly income. Detroit is a cash flow market — don't expect rapid appreciation, but the checks come in every month.
Data sources: HUD Fair Market Rents (FY2024), Zillow Home Value Index (April 2026), Freddie Mac Primary Mortgage Market Survey.
Cap Rate
14.4%
Above average
Monthly Cash Flow
+$604
After all expenses
Price-to-Rent
5.1
Investor-friendly
DSCR
2.25
Passes lender test
Key Metrics
- Median Home Price
- $89,148
- Average Rent (3BR)
- $1,400/mo
- Price-to-Rent Ratio
- 5.1(good)
- 1% Rule
- 1.63%(passes)
- Cash-on-Cash Return
- 34.8%
- Vacancy Rate
- 8.0%
Market Strength
- Unemployment Rate
- 5%(+0.7% vs national)
- Rent Growth (YoY)
- +2.9%(national avg)
- Population Growth
- +0.7% YoY
Property Tax Rate
1.38%
of assessed value (MI avg)
Median Income
$63,202
household (MI avg)
Rent-to-Income
26.6%
Affordable
Section 8 Max Rent
$1,400/mo
3BR voucher payment
MI Investor Climate
Landlord Friendly
6/10
State Income Tax
Has state tax
Property Tax
1.38% effective
Population Trend
+0.7% (3yr)
Population Movement (Tax Year 2021→2022)
Net Migration
-2,629 households
SHRINKING
Total Inflow
6,269
households moved in
Avg Income (New Residents)
$64,440
per household
Where they're coming from:
Where residents are leaving to:
Net outflow may indicate weakening demand — but can mean lower prices and higher cap rates.
Best Zip Codes in Detroit for Investors
All Zip Codes in Detroit
| Zip | Cap Rate | Cash Flow | Home Price | Rent (3BR) | DSCR |
|---|---|---|---|---|---|
| 48213 | 27.0% | +$801 | $46,663 | $1,360/mo | 4.22 |
| 48205 | 25.6% | +$843 | $52,542 | $1,460/mo | 4.01 |
| 48234 | 23.7% | +$789 | $54,528 | $1,410/mo | 3.72 |
| 48204 | 23.4% | +$756 | $53,352 | $1,360/mo | 3.66 |
| 48217 | 23.3% | +$843 | $59,888 | $1,520/mo | 3.64 |
| 48238 | 23.2% | +$754 | $53,661 | $1,360/mo | 3.64 |
| 48211 | 21.8% | +$732 | $56,860 | $1,360/mo | 3.42 |
| 48203 | 20.8% | +$714 | $59,497 | $1,360/mo | 3.26 |
| 48227 | 17.8% | +$652 | $68,707 | $1,360/mo | 2.78 |
| 48228 | 17.6% | +$647 | $69,494 | $1,360/mo | 2.75 |
| 48210 | 17.4% | +$643 | $70,089 | $1,360/mo | 2.72 |
| 48224 | 15.9% | +$656 | $82,764 | $1,480/mo | 2.49 |
| 48219 | 14.8% | +$631 | $90,152 | $1,510/mo | 2.31 |
| 48223 | 14.4% | +$591 | $88,710 | $1,450/mo | 2.25 |
| 48235 | 14.2% | +$604 | $92,918 | $1,500/mo | 2.22 |
| 48214 | 13.9% | +$555 | $89,148 | $1,410/mo | 2.17 |
| 48209 | 13.2% | +$510 | $89,818 | $1,360/mo | 2.07 |
| 48206 | 13.2% | +$509 | $89,916 | $1,360/mo | 2.06 |
| 48215 | 12.4% | +$491 | $97,498 | $1,400/mo | 1.95 |
| 48207 | 8.9% | +$310 | $147,426 | $1,590/mo | 1.40 |
| 48221 | 8.8% | +$275 | $135,591 | $1,450/mo | 1.38 |
| 48208 | 8.5% | +$232 | $131,031 | $1,360/mo | 1.33 |
| 48202 | 6.2% | -$29 | $178,276 | $1,430/mo | 0.97 |
| 48226 | 5.7% | -$171 | $317,406 | $2,400/mo | 0.90 |
| 48216 | 5.2% | -$191 | $193,844 | $1,360/mo | 0.81 |
| 48028 | 2.9% | -$914 | $318,199 | $1,500/mo | 0.46 |
| 48201 | 1.5% | -$1,691 | $418,805 | $1,380/mo | 0.24 |