Michigan Rental Property ROI Calculator
Free Michigan rental property ROI calculator. Analyze cash flow, cap rate, and cash-on-cash return using Michigan's 1.54% property tax rate.
How This Calculator Works
Calculation methodology and assumptions
This calculator uses standard real estate investment analysis to determine the return on a rental property in Michigan. It factors in the mortgage payment (using a standard amortization formula), property taxes at Michigan's effective rate of 1.54%, insurance, vacancy loss, maintenance reserves, and property management fees. The cap rate is calculated as Net Operating Income divided by purchase price. Cash-on-cash return measures annual cash flow relative to total cash invested (down payment + estimated closing costs). The 10-year projection assumes 3% annual appreciation and 2% annual rent increases.
Key State Information
Michigan has an effective property tax rate of 1.54%, which is above the national average of 1.10%. Michigan has a flat 4.25% state income tax that applies to rental income.
Frequently Asked Questions
What is the average property tax rate in Michigan?
Michigan's effective property tax rate is 1.54%, which means on a $235,000 home, you'd pay approximately $3,619 per year in property taxes.
Is Michigan a good state for rental property investment?
Michigan offers a median home price of $235,000 with 2BR rents averaging $1020/month. The higher property tax rate reduces net cash flow but may be offset by strong rental demand. Use this calculator with your specific numbers to determine the actual ROI.
What is a good cap rate for rental property in Michigan?
A cap rate of 5-8% is generally considered good for rental properties. In Michigan, cap rates vary significantly by market. Urban areas tend to have lower cap rates (3-5%) but more consistent appreciation, while rural areas may offer higher cap rates (7-10%) with less growth potential.
How much do I need to invest in a rental property in Michigan?
For a median-priced home in Michigan ($235,000), a 20% down payment would be $47,000. Including estimated closing costs of $7,050, you'd need approximately $54,050 in cash.
Does Michigan have landlord-friendly laws?
Michigan has moderate landlord-tenant laws. Research specific local regulations before investing.
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