The Benefits of Real Estate Investing in Detroit, Michigan

[Hayley Beckman]

Detroit, Michigan, is experiencing a resurgence, making it an increasingly attractive destination for real estate investors. With its rich history and revitalizing economy, the city offers unique opportunities for long-term growth. The cost of real estate in Detroit remains significantly lower than many major cities in the U.S., allowing investors to purchase properties at a fraction of the cost compared to cities like New York, Los Angeles, or Chicago. This affordability gives investors the chance to acquire valuable assets while taking advantage of the potential for appreciation as Detroit continues its revitalization.

Another benefit of investing in Detroit real estate is the city's growing rental market. As more people flock to the city due to job opportunities, educational institutions, and an expanding arts and culture scene, the demand for rental properties has risen. Investors can benefit from steady rental income, especially in high-demand areas like Midtown, Corktown, and downtown Detroit. The city’s diverse workforce, combined with new developments and infrastructure projects, ensures that there is a consistent pool of renters, which can result in reliable cash flow for property owners.

Finally, the Detroit real estate market is supported by numerous incentives for investors. Michigan offers tax credits and breaks for development projects, especially in designated areas like Opportunity Zones. Additionally, the city is actively encouraging redevelopment and attracting businesses back to the area. As a result, investors can often tap into government resources that help offset some of the risks of real estate ventures. With ongoing improvements to public services, transportation, and commercial developments, Detroit is positioning itself as a thriving urban hub—making it a prime location for real estate investment!

[Travis Biziorek]

Detroit has a lot going for it—affordable prices, strong rent-to-price ratios, and an appreciation story that’s still unfolding. But the reality? It’s not for everyone.

I built a 12-door portfolio in Detroit, generating $16,000/month in gross rents, and I’ve seen the good, the bad, and the ugly. Most people will sell you on the upside—cheap properties, high cash flow, and a growing city—but they conveniently skip over the challenges.

Tenant risk is real. Late rents, evictions, and turnovers happen more frequently than in higher-end markets. If you’re not prepared for that, Detroit (and similar markets) might not be a fit.

Older housing stock means more maintenance. Many homes are pushing 100 years old. Plumbing issues, sewer line replacements, and unexpected rehab surprises are part of the game.

Break-ins and theft happen. Vacant properties are targets. If you leave a house unsecured, there’s a chance you’ll lose a furnace or water heater. It’s preventable with proper precautions, but still something to factor in.

Appraisal risk is a wildcard. If you're doing BRRRR, know that bad appraisals can and do happen in Detroit. If you don't have a backup plan, you're in for a rough time.

I don’t say any of this to scare people off—I’ve navigated all these challenges and built a great portfolio. But I do want people to go in with eyes wide open. The folks who struggle in Detroit are the ones who expect smooth sailing.

Happy to share more if anyone’s considering the market. Detroit can be a fantastic place to invest if you’re prepared for the realities that come with it.