Cap Rate in Detroit, MI

2026 Market Overview for Real Estate Investors

Last updated: March 2026 • Sources: Census ACS, Zillow, Redfin, county assessor

Avg Cap Rate

11.2%

#1 of 50 markets

Median Home Price

$85,000

Purchase price

Median Monthly Rent

$1,050

$12,600/yr gross

Rent-to-Price Ratio

1.24%

Strong (1% rule range)

Cap Rate Rating

Excellent (verify risk)

Unusually high. Double-check the numbers — high cap rates can signal higher vacancy, crime, or obsolescence risk.

Market Snapshot

Population	633,218
5-Year Population Growth	-2.8%
Median Household Income	$34,000
Vacancy Rate	12.5%
Property Tax Rate	2.76%($2,346/yr)

Investor Takeaway

Detroit offers the highest cap rates in the country, but higher vacancy and property taxes require careful neighborhood selection. Focus on renovated properties in stabilizing areas like Corktown and Midtown.

Top Neighborhoods for Investors

Where to focus your search in Detroit, MI:

Corktown

BRRRR

Detroit's oldest neighborhood, rapidly gentrifying with new restaurants and Ford's mobility campus. Renovated properties command premium rents with strong appreciation.

Midtown

Cash Flow

Anchored by Wayne State University and the Detroit Medical Center. Lowest vacancy in the city with consistent tenant demand from students and medical professionals.

Grandmont-Rosedale

Cash Flow

Stable residential neighborhood with well-maintained housing stock. Lower entry prices than Corktown/Midtown with solid long-term tenant base.

Woodbridge

BRRRR

Historic district adjacent to Midtown with strong renovation activity. Victorian-era homes offer excellent BRRRR potential with rising ARVs.

Quick Math

Estimated annual numbers for a median-priced property in Detroit, MI before financing:

Annual Gross Rent$12,600

Less Vacancy (12.5%)($1,575)

Less Property Tax (2.76%)($2,346)

Less Est. Insurance + Maintenance($1,700)

Estimated NOI$6,979

Implied Cap Rate8.2%

Estimates based on median values. Insurance + maintenance estimated at 2% of home value. Actual results vary by property condition, neighborhood, and management.