DSCR Loans in Michigan

Last updated: May 2026

Michigan's deeply discounted housing stock, particularly in Detroit and its inner-ring suburbs, has made the state a national hotspot for cash-flow-focused DSCR investors. Grand Rapids and the western side of the state offer a different profile: appreciating markets with tighter inventory and higher-quality tenant pools.

Property Taxes in Michigan

Michigan's Proposal A caps assessed-value increases at 5% or inflation per year, whichever is less, but values reset to market upon sale (uncapping). Wayne County (Detroit) effective rates average about 2.50% after uncapping, Oakland County runs near 1.60%, and Kent County (Grand Rapids) sits around 1.30%. The uncapping effect is critical: an investor buying a long-held property may face a significant jump in the first post-acquisition tax bill.

Insurance Costs

Typical investment property insurance in Michigan runs $1,600/yr. Michigan's Great Lakes climate brings heavy snow loads and ice-dam risks that can increase roof and structure claims. Detroit-area properties may face higher premiums due to age of housing stock, vacancy rates in surrounding blocks, and fire-risk scoring.

Landlord-Tenant Laws

Michigan has no rent control and state law preempts local ordinances from enacting it. Evictions proceed through district court, but Detroit's 36th District Court has significant backlogs that can stretch timelines to eight weeks or more. Outside Wayne County, timelines are typically shorter. There is no statutory cap on security deposits.

Top Investment Markets in Michigan

DSCR Considerations in Michigan

Michigan's property-tax uncapping rule is the single most important underwriting detail for DSCR investors. Always calculate taxes based on the post-sale assessed value, not the seller's current bill. Detroit properties can show misleadingly high DSCR ratios on paper; factor in realistic vacancy, maintenance reserves, and property management costs to avoid surprises.