Should I Buy Residential Property in Detroit as an Investment?

Detroit’s residential market is a smart investment due to the area’s exceptional cap rates of about 9-14%, as well as the city’s growing rental demand, driven by traveling nurses, tech employees, and trade workers.

That said, the proper investment strategy is crucial here.

For first-time homeowners and flippers alike, Detroit offers a rare balance between affordability and growth, with programs such as the Detroit Home Mortgage and the Detroit Land Bank Authority Auction providing the funds needed for full-scale restorations of the city’s most blighted properties. 

Detroit’s Residential Property Trends

With residential renovations averaging in the $40,000-$80,000 range in Detroit’s most sought-after fix-and-flip zip codes, many local and outside investors are realizing six-figure resale profit potential for the first time in decades.  

In fact, appreciation in Detroit’s most stable neighborhoods has far outpaced projections, with a 8-12% year-over-year growth in some areas that is expected to further increase due to widespread corporate relocation and multiple big-ticket construction projects currently unfolding downtown and elsewhere. 

Final Verdict 

In summary, if your investment horizon is anywhere between 2 and 10 years out, buying up residential property in Detroit is a solid move. 

With patience, local partnerships, and the right strategy, the returns are expected to rival those of other major U.S. markets – at a fraction of the cost.