Top 5 Best Real Estate Investment Markets in Michigan

Kristine Cameron

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Kristine Cameron

January 4th, 2023
Updated January 4th, 2023

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Michigan is a beautiful Midwest destination that offers several affordable opportunities for new real estate investors. With a relatively low cost of living, thousands of lakefront properties, and four distinct seasons to enjoy, Michigan is an excellent place for students, families, and retirees alike.

Discover the best real estate investment markets in the Wolverine State with this helpful guide!

Overview of Michigan real estate trends

Michigan can be overlooked by investors, but the state has strong real estate opportunities. The median sale price for a home is around $256,500, making it an affordable state for beginner investors.

Although Michigan was one of the slowest growing states in the nation between 2010 and 2020, there are some markets attracting a lot of attention. To help you narrow down a good place to reach your investment goals, we researched markets around the state to reveal the top five.

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Top 5 Michigan real estate markets in 2022

🏆 Best overall
🌴 Best for vacation rentals
💸 Best for house hacking
🏡 Best for flipping
📅 Best for landlords

Ultimately, the best investment market for you depends on your personal goals. If you want to flip a home, you probably won't be looking for the same criteria as a vacation property investor.

Some investors focus on appreciation to avoid paying capital gains every year, whereas others like the steady stream of income that comes from long-term rentals. We've identified some of the best investment markets for multiple strategies below, but you can also use our rental property calculator to evaluate individual properties.

To find the best real estate investment market in Michigan, we compiled data across the state. We evaluated property appreciation rates, affordability based on average income, and profitability based on the costs of renting versus buying a home. Learn more about our methodology.

» LEARN: Real Estate Investing — A Complete Guide To Getting Started

Best overall: Lansing

🏡 Median home value
$220,375
📈 Property appreciation rate
12.24%
💰 Median household income
$60,278
🔑 Median gross rent
$884
🏦 Median mortgage cost
$1,290

The capital of Michigan is a bustling city with opportunities for multiple kinds of real estate investment.

The homeownership rate is 56% in Lansing, showing that the market is equally viable for house flippers and rental property owners.

Homes remain relatively affordable at a median price of $220,375, and they're increasing in value by about 12.24% year-over-year. Additionally, Lansing has a below-average cost of living compared to similar metro areas.

Lansing's consistent stream of visitors also makes the city a great option for vacation property investors. The city is full of museums, performing arts centers, farmers markets, and the Potter Park Zoo. Known as "Michigan's Festival Capital," Lansing hosts all kinds of events around the year, including the Lansing Bourbon Fest, the Summer Solstice Jazz Festival, the Common Ground Festival, and the Michigan Pride festival.

Whether you prefer house flipping, long-term rentals, or vacation homes, Lansing has something that will fit your investment portfolio.

Best for vacation rentals: Ann Arbor

🏡 Median home value
$379,472
📈 Property appreciation rate
11.8%
💰 Median household income
$75,730
🔑 Median gross rent
$1,161
🏦 Median mortgage cost
$1,807

For the past few years, Destination Ann Arbor has been rebranding the city as an outstanding tourist attraction, and it has definitely paid off. The greater Ann Arbor area brought in $832 million from tourism alone in 2019. The city was also listed as the #1 best place to live in Michigan in 2022.

Ann Arbor is a beloved tourist destination year-round, but it draws its biggest crowds during the summer and fall months. For instance, the annual Ann Arbor Art Fair attracts nearly half a million people each July for an exciting three-day event.

Ann Arbor is also home to Michigan Stadium, colloquially called "The Big House" by University of Michigan students and fans. With room for over 107,000 spectators, it's the largest sports stadium in the nation and hosts a wide variety of popular athletic competitions year-round.

With the area's strong focus on boosting its tourism industry and its plethora of things to do, now is an excellent time to invest in vacation rental properties in Ann Arbor.

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Best for house hacking: Holland

🏡 Median home value
$297,104
📈 Property appreciation rate
17.36%
💰 Median household income
$65,071
🔑 Median gross rent
$838
🏦 Median mortgage cost
$1,248

If you want to live in a scenic lakefront town for free, Holland is your best option for house hacking.

While the city's population growth has been small in the last decade, its housing market is competitive. Average homes sell within just 6 days of listing, and they appreciate at a rate of 17.36% year-over-year. Additionally, the city's median home value of $297,104 is far below the national average.

The idyllic scenery and relatively small population of around 34,000 residents make Holland a lovely place to call home. It's located on Lake Macatawa — which connects to Lake Huron via a small waterway — and home to Holland State Park and Windmill Island Gardens. Each May, the town celebrates its Dutch heritage with its annual Tulip Time Festival.

Another viable house hacking strategy is to rent out your property to college students in the area. Each year, about 3,000 students attend Holland's Hope College, a private university located within the city limits.

» LEARN: House Hacking — How To Live For Free With Real Estate Investing

Best for house flippers: Bay City

🏡 Median home value
$154,806
📈 Property appreciation rate
14.04%
💰 Median household income
$48,290
🔑 Median gross rent
$679
🏦 Median mortgage cost
$1,061

The best markets for house flippers are cities with relatively inexpensive home prices and high year-over-year property appreciation rates. If you're interested in flipping houses, Bay City is a great place to start. On average, Bay City real estate properties increase in value by about 14.04% year-over-year, and the median home value is fairly affordable at $154,806.

Bay City is located on the shores of Lake Huron and home to the beautiful Bay City State Park. With picturesque views of Saginaw Bay and dozens of walking trails to explore, residents have plenty of reasons to enjoy the great outdoors.

Although its population decreased slightly between 2010 and 2020, Bay City's real estate market remains very competitive. Average homes stay on the market for just 12 days. These figures indicate that house flippers can buy a property at a low price and resell it without having to tackle major renovations.

Best for landlords: Grand Rapids

🏡 Median home value
$309,920
📈 Property appreciation rate
14.7%
💰 Median household income
$66,297
🔑 Median gross rent
$910
🏦 Median mortgage cost
$1,305

Cities with a high number of renters, average home prices, and healthy rent-to-income ratios are great for landlords or long-term rentals property owners.

In 2022, Grand Rapids was named the 6th most competitive rental market in the nation. U.S. News & World Report named Grand Rapids as Michigan's second-best city to live in due to its affordability and overall desirability to prospective residents.

The city's population increased by 5.78% between 2010 and 2020, and rental units only stay vacant for an average of 32 days. Additionally, reports show that around 18 people compete for each new rental unit that becomes available. New landlords who purchase or build properties to rent here are almost guaranteed to have consistent tenants.

Student housing is another viable option in Grand Rapids. There are seven colleges sprinkled across the city, including Aquinas College, Calvin University, Davenport University, and Grand Rapids Community College.

How to find undervalued Michigan properties

The best deals in Michigan are homes that only need cosmetic repairs or have motivated sellers. Types of homes that make good flips often include foreclosures, pre-forecloses, short sales, and abandoned or neglected properties. Here's how to find them.

1. Use real estate investment software

One of the biggest challenges of flipping homes or finding rental properties in Michigan is finding great deals. Here's where the DealMachine app can be highly valuable.

DealMachine's real estate software helps Michigan investors find distressed homes (such as pre-foreclosures, foreclosures, or short sales) and get in touch with owners quickly by using batch skip tracing and direct mail campaigns.

DealMachine's driving for dollars app is fast and easy to use. When you're driving around town and spot a home that could be a great deal (maybe it's been abandoned or neglected), you can send the owner direct mail through the app.

Download the DealMachine app to find undervalued Michigan properties as you drive. DealMachine offers a 7-day free trial and $15 in free credits that can be used towards marketing (like sending out direct mail to homeowners).

Other popular real estate software or websites for flippers to consider include:

  • Flipster: Primarily targeting house flippers, this app helps users find motivated seller leads, while also providing valuable comparable property information to help you estimate a home's fair market value before making an offer.
  • Flipperforce: The Flipperforce app helps BRRRR method investors analyze home values to calculate the maximum purchase price to offer on a property before making a purchase.
  • Stessa: Stessa's software allows you to easily track the performance and financial status of all your properties in one easy-to-use app. It provides regular reports on how profitable your properties are and can be linked to your financial accounts for automatic updates.

2. Look for FSBO homes

Investing in a FSBO (for sale by owner) property may get you a better deal since you'll be negotiating directly with the seller instead of a listing agent. Many FSBO sellers are more concerned about selling quickly than earning the highest possible profit, which can help you keep more money in your pocket.

Zillow's foreclosure center is one great resource for finding foreclosed and bank-owned properties in your area. However, unlike off-market properties you'd find on DealMachine and other software, most of Zillow's properties are publicly listed — meaning you'll likely face stiff competition from other investors.

3. Partner with an investor-friendly agent

Using an experienced realtor is the best way to ensure a favorable, easy home purchase.

Great agents understand Michigan's different investment markets, are familiar with real estate laws, and can provide access to lesser-known neighborhoods to help you discover your dream investment property.

Clever's real estate agents can guide you through Michigan's real estate market and make your house hunting journey a breeze. Eligible buyers can even get cash back on their home's purchase price after closing, which could help you save thousands.

👋 Start your real estate investing journey now!

Buy your investment property with a top local realtor who specializes in helping real estate investors find great deals. Clever can connect you with investing pros at trusted brands like Keller Williams and RE/MAX.

Enter your zip code to get personalized agent matches sent straight to your inbox. Compare your options until you find the perfect fit, or walk away with no obligation. Try Clever's free service today!

Methodology

We used data from the U.S. Census Bureau to determine which cities offer the greatest investment opportunities. For each city, we considered the median mortgage cost, average rent prices, median household income, and annual property appreciation statistics.

We also considered how successful different types of investments — such as house flipping, vacation rentals, and traditional single-family homes — may be in each market to help investors reach their goals.

Frequently asked questions

Our top five picks for investors include Lansing, Ann Arbor, Holland, Bay City, and Grand Rapids. Each of these cities have unique investment opportunities available to specific investors.

We recommend using specialized real estate investment software — such as DealMachine — or partnering with a knowledgeable local real estate agent.

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