You need to think about not just the potential income but also the potential problems such as city ordinances, state law, insurance, potential eviction issues, etc.

I have already shopped insurance, and the sellers are providing $5k towards prepaids/closing costs. 

The insurance would not be valid for two reasons:1) the insured “individual” is no longer the owner2) the insurance was for an owner occupant, not a rentalMost people DO change the insurance to reflect the llc as owner and as a rental.

@Nathan Frost uhm, not sure you understand Detroit market.Motion lights & cameras may work half the time at best.Too many insurance claims will get you cancelled and eventually black-balled.But, what do we know after 24 years in the Detroit market...

From what I saw for the most part the big names you typically hear in insurance typically performed well for people. 

I just have vacant home insurance along with regular home insurance, but no other professional liability insurance.

@Jinglei ShenThe insurance of $1,400 a year seems pretty high in my opinion.

The highest appreciating markets and those with the greatest rental demand/price- like those in Florida and Texas - also cost more to acquire and insure. 

I can guarantee you'll need documentation of lease, and rental insurance before closing on another home.

Does renters insurance cover something like this?