Rental Property in Michigan: What the Numbers Actually Look Like

Michigan is the state in this set where the most important number is not on the listing.

The statewide median sale price is $299,900. Michigan rebuild cost runs about $230 per square foot. Multiply that out on a modest 1,500 square foot house and you get $345,000 — 15.04% more than the median house sells for. On an 1,800 square foot house it is $414,000, or 38.05% above the median price. In Wayne County, where the median is $224,327, that same 1,500 square foot rebuild is 53.79% above the purchase price.

For a landlord this is not a curiosity. It is the difference between a total loss being covered and a total loss being an unfunded liability. The purchase price does not set your dwelling limit. Rebuild cost does, and in Michigan the two have come apart.

The second Michigan-specific thing to know is that the tax bill on the listing is probably not the tax bill you will pay. Michigan caps annual growth in taxable value for a continuing owner, and that cap comes off the year after a transfer. Section 2 is about both.

A note before you start: this is general educational information about how rental property arithmetic works in Michigan. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Michigan property tax is administered by local assessing units with millage rates that vary sharply between neighboring jurisdictions, and insurance is priced per structure. Talk to a Michigan CPA about tax treatment, a licensed Michigan insurance agent about a real quote, and a Michigan real estate attorney about anything contractual.

1. What a rental costs to buy here

The statewide median sale price is $299,900 (Houzeo, live Realcomp MLS data, up 3.41% year over year).

County medians and carrying costs diverge sharply:

• Oakland County: $395,000, effective property tax rate 1.23%, average insurance $1,546
• Wayne County (Detroit): $224,327, effective property tax rate 1.51%, average insurance $4,252

Wayne County is 57% of Oakland's price and carries 2.75 times Oakland's insurance. That is the widest intra-state insurance ratio in this Midwest set, and Section 5 works out what it costs.

The cash you actually need

• Real estate transfer tax: 0.86% combined (state plus county, $4.30 per $500 of value), customarily paid by the seller though negotiable by contract. On the $299,900 median that is $2,579.14; on Oakland's median, $3,397.00; on Wayne's, $1,929.21. Counties and cities may add further local fees on top. Because it is large enough to matter and it is only a custom, get the allocation in writing rather than assuming.
• No mortgage recording tax and no intangible tax. Michigan's transfer tax applies to deeds, not to mortgage instruments. Nothing a Michigan buyer pays scales with the loan.
• Closing costs: 2% to 5%. This article uses a 3.5% midpoint.
• Closings are handled by title and escrow companies. Michigan is not an attorney-required state.

On the $299,900 statewide median at 25% down:

• Down payment: $299,900 x 0.25 = $74,975
• Loan amount: $224,925
• Closing costs: $299,900 x 3.5% = $10,496.50
• Buyer-side transfer tax: $0 by custom
• Total cash in: $85,471.50

On price growth: FHFA's 2026 Q1 Purchase-Only index put Michigan at +3.23% year over year, nineteenth among the states. Ordinary, and not a number that rescues a cash-flow problem.

2. The two expenses that decide whether it works

Property tax: modest on paper, and it moves the year after you buy

The Tax Foundation reads Michigan's effective rate at 1.19% on owner-occupied housing value; SmartAsset separately reads about 1.18%. The two are tightly consistent, and this article uses 1.19%.

On the $299,900 example: $299,900 x 1.19% = $3,568.81 a year, or $297.40 a month.

That is a genuinely moderate figure — below Iowa, Wisconsin, and Kansas, and far below Illinois. But Michigan has two mechanics that make the statewide effective rate a worse guide than usual.

The Principal Residence Exemption does not apply to a rental. Michigan's PRE exempts a qualifying primary residence from the local school district's operating millage — typically up to 18 mills, or $18 per $1,000 of taxable value — while county, city or township, and other non-school-operating millages still apply. On a home with $200,000 of taxable value, that is roughly $3,600 a year of difference between a homestead and a non-homestead property. The PRE is not automatic: owners file a PRE affidavit (Form 2368) with the local assessor.

A rental is non-homestead. So if you are buying from an owner-occupant, the tax figure on the listing reflects an exemption you will not have. This is the single largest underwriting error available in Michigan, and it is worth thousands of dollars a year.

Taxable value uncaps the year after a transfer. Under Michigan's Proposal A framework, a property's taxable value grows for a continuing owner at a capped rate, while its state equalized value tracks the market. On transfer, the cap comes off and taxable value resets to state equalized value for the following tax year. A house owned by the same family for fifteen years in an appreciating township can carry a taxable value far below its market-based figure — and that gap closes on you, not on the seller.

Put those together and the correct Michigan procedure is unambiguous: get the state equalized value from the assessor, get the total millage for the parcel including the 18 school operating mills you will now pay, and compute the bill yourself. Never underwrite a Michigan rental from the seller's current bill.

Here is the same house with only the effective rate changed, so you can see what the county spread and the uncapping risk are worth:

The realistic Michigan tax range across these two counties is worth 0.32 points of cap rate. The PRE gap and an uncapping reset can each be larger than that on a specific parcel, which is why the parcel matters more than the state average here.

Insurance: higher than a no-coastline state has any right to be

The reference figure is $2,766 a year at $300,000 of dwelling coverage with a $1,000 typical all-perils deductible — the average of three independent sources that each state $300,000 coverage explicitly: Insurance.com at $3,071, Insure.com at $2,924, and Insurify at $2,304.

Michigan is the state in this research batch where the sources disagree most in dollar terms. Two land near $3,000, one lands 21% lower. Treat $2,766 as a midpoint, not a precise number. (This site's mortgage-side dataset separately carries a $2,415 NerdWallet figure at a different coverage tier; that is not a contradiction, it is a different product.)

At $2,766 the premium is $230.50 a month and 11.53% of gross rent on Section 3's example — meaningfully below the property tax line. Michigan's driver is hail and severe convective storm frequency plus construction cost, not wind or water.

Insurify projects +3% for 2026, slightly below its national +4%.

Here is the same house with only the premium changed:

Insurance is worth 0.90 points of cap rate across the county range, against 0.32 points for tax. In Michigan, insurance has roughly three times the leverage of property tax — and note that the disagreement between two published Michigan averages ($2,304 to $3,071) is worth 0.26 points on its own.

The catastrophe deductible: what Michigan actually has, stated carefully

This site records Michigan's catastrophe deductible as not applying statewide, and that conclusion was checked against three separate lists rather than assumed:

• Michigan is correctly absent from the Insurance Information Institute's list of nineteen states plus DC that use hurricane deductibles. It has no coastal or hurricane exposure.
• It is absent from the standard enumeration of states where percentage wind/hail deductibles are the market convention (Texas, Oklahoma, Kansas, Nebraska, Colorado, South Dakota, North Dakota, Minnesota, Iowa, Missouri).
• It is absent from United Policyholders' tornado-alley list.

What is true anyway, and worth a landlord's attention: Michigan does have real hail and severe-thunderstorm exposure, and Michigan agency guidance describes separate percentage wind/hail deductibles — typically 1% or 2% of the dwelling limit, so $3,000 to $6,000 on a $300,000 home — appearing on many Michigan policies as a carrier-by-carrier option. No Michigan statute or DIFS rule governs it, and no Michigan-specific prevalence figure exists to justify modeling it as the norm.

So the honest instruction is neither "you have one" nor "you don't." It is: read the deductible section of your declarations page and look specifically for a separate wind/hail line. If it is there, convert it to dollars. Section 3 works out that this rental produces $11,137.19 of net operating income in a good year, so:

• A 1% wind/hail deductible ($3,000) would be 26.94% of a full year's NOI
• A 2% deductible ($6,000) would be 53.87% of a full year's NOI

You cannot pass any of it to a tenant. It is not a lease obligation and it is not billable.

Roof settlement, where Michigan caselaw runs the insurer's way

Michigan has no matching statute or regulation, and no Michigan law fixes whether a roof claim settles at replacement cost or actual cash value. The caselaw is worse for owners than in many states. In Bernert v. State Farm Fire & Cas. Co., 2012 WL 1060089 (E.D. Mich. Mar. 29, 2012), the court enforced a "Common Construction" policy provision and held the insurer was not required to match antique teak flooring and plaster ceiling, paying only the cost of modern equivalents. Applied to a roof, that reasoning means a Michigan carrier can generally repair the damaged slope with reasonably similar shingles rather than replacing the whole roof for appearance, unless the policy says otherwise.

Beyond that, settlement basis is set by roof age and the endorsement attached: replacement cost is standard on newer roofs, while Michigan's wind, hail, and ice-load exposure has pushed carriers toward roof surface payment schedules and actual-cash-value roof endorsements past roughly 15 years, often paired with cosmetic-damage exclusions. A depreciated payout on a 15-year-old architectural shingle roof can land near 40 to 60 cents on the dollar before the deductible. Michigan has no state roof mitigation grant program and no mandated hardening discount.

Nationally, in March 2026 the Federal Housing Finance Agency relaxed Fannie Mae and Freddie Mac requirements so that ACV roof coverage can satisfy a lender rather than replacement cost being required. That removed a constraint that had been protecting borrowers by default. Nobody will now insist on your behalf.

The coverage gap, which is the Michigan story

Michigan rebuild cost runs about $230 per square foot — the midpoint of a published $170 to $290 band shared with Indiana and Maine, so read it as a regional range rather than a Michigan-specific survey. Set against sale prices:

An 1,800 square foot house rebuilds for $414,000, which is 38.05% above the statewide median and 84.5% above Wayne County's. A $300,000 dwelling limit buys roughly 1,304 square feet of rebuild in Michigan.

This is the number that should change what a Michigan landlord does. In Detroit and much of Wayne County, a house that sells for $224,327 costs materially more than that to rebuild, and a buyer who sets the dwelling limit at the purchase price — or worse, at the loan amount — is deliberately underinsured on a total loss. It also means:

• Your premium will look high relative to the price of the house, and that is correct rather than a mispricing. Wayne County's $4,252 average against a $224,327 median is 1.90% of purchase price a year. Oakland's $1,546 against $395,000 is 0.39%. Same state.
• An 80% coinsurance or insurance-to-value requirement is measured against replacement cost, not price. Underinsuring can reduce recovery on a partial loss too, not only a total one.
• Ask the agent for the carrier's replacement cost estimator output, not a limit derived from your purchase price, and read the square footage and construction class it used.

3. A full worked example

The property. A single-family house at the Michigan statewide median of $299,900.

The rent — read this carefully. This site does not carry rent data. The $2,000 a month used below is an assumption chosen to be plausible for a house at that price. It is not a market observation. Pull three to five real comparable listings for the specific neighborhood and substitute the actual number, because Section 4 shows how sensitive the answer is to it.

The other assumptions:

• Vacancy: 8% of gross rent (roughly one month of turnover a year)
• Property management: 10% of collected rent
• Repairs and maintenance: 5% of gross scheduled rent
• Capital reserve: 5% of gross scheduled rent
• Financing: 25% down, 30-year fixed at 7.00% — the rate is an assumption, not a quote
• No HOA
• Property tax computed at the statewide 1.19% effective rate. On a real parcel, see Section 2 — use the uncapped, non-PRE figure

Step 1 — income

• Gross scheduled rent: $2,000 x 12 = $24,000
• Vacancy loss: $24,000 x 8% = $1,920
• Effective gross income: $24,000 - $1,920 = $22,080

Step 2 — operating expenses

Management is charged on rent actually collected, not scheduled rent:

• Management: $22,080 x 10% = $2,208
• Property tax: $299,900 x 1.19% = $3,568.81
• Insurance: $2,766
• Maintenance: $24,000 x 5% = $1,200
• Capital reserve: $24,000 x 5% = $1,200
• Total operating expenses: $10,942.81

Expense ratio: $10,942.81 / $22,080 = 49.56% of collected rent — inside the 35% to 55% band most rentals land in.

Step 3 — net operating income and cap rate

• NOI = $22,080 - $10,942.81 = $11,137.19
• Cap rate = $11,137.19 / $299,900 = 3.71%

The mortgage is deliberately absent from that figure. Cap rate exists to compare properties independently of how they are financed; putting debt service into it is the most common error in this whole exercise, and it makes two identical houses look like different investments because one buyer put more down.

Step 4 — debt service and cash flow

Loan: $299,900 x 75% = $224,925. At 7.00% over 30 years, principal and interest is $1,496.43 a month, or $17,957.16 a year.

• Annual cash flow = $11,137.19 - $17,957.16 = -$6,819.97
• Monthly cash flow = -$568.33
• Debt service coverage ratio = $11,137.19 / $17,957.16 = 0.62

Step 5 — cash-on-cash return

• Cash invested: $85,471.50 (Section 1)
• Cash-on-cash = -$6,819.97 / $85,471.50 = -7.98%

Rate sensitivity, since 7.00% was an assumption

• At 6.50%: P&I $1,421.68/mo, annual cash flow -$5,922.97
• At 7.00%: P&I $1,496.43/mo, annual cash flow -$6,819.97
• At 7.50%: P&I $1,572.71/mo, annual cash flow -$7,735.33

A full point of rate is worth about $1,812.36 a year.

The check that almost passes

Add up the three bills a lender escrows:

• Principal and interest: $1,496.43
• Property tax: $3,568.81 / 12 = $297.40
• Insurance: $2,766 / 12 = $230.50
• Total: $2,024.33 a month

Against $2,000 of assumed rent, that is -$24.33 a month — close enough to zero that most people call it even and move on.

That is the trap. The honest analysis in Step 4 loses $568.33 a month. The gap between the two numbers is $544.00 a month, and every dollar of it is Section 4.

4. The expenses people leave out

Vacancy, management, and capital reserves do not arrive as invoices. Nobody bills you for the month the house sits empty, or for the roof you will need in nine years, or — if you self-manage — for your own weekends. So they fall out of the mental model, and the property looks better than it is.

Here is the same house with those three removed and everything else identical:

The three omissions are worth $5,328 a year — $1,920 of vacancy, $2,208 of management, $1,200 of reserve. They flatter the cap rate by 1.78 percentage points and hide 78.12% of the annual loss.

The left column is what an optimistic Michigan spreadsheet looks like: a 5.49% cap rate, a DSCR of 0.92, and a $124.33 monthly shortfall that reads as a rounding error. The right column is the same house at 3.71%, DSCR 0.62, losing $6,819.97 a year. Nothing about the property changed. Three lines were added.

The left column's expense ratio, 31.40%, is itself the tell: it sits below the 35% to 55% band that real rentals land in, which is the signal that something is missing rather than the signal of a good deal.

Vacancy. Eight percent is roughly one month a year, which is what a single clean turnover costs between move-out and the next tenant's first full month. Setting it to zero assumes the house is never empty, including between tenants.

Management. Set it to zero and the return is paying you for your own labor rather than for the property. Self-managing this house saves $2,208 a year, lifting NOI to $13,345.19 and the cap rate to 4.45%, with cash flow improving to -$384.33 a month. It is a real saving. It does not fix the deal, and it stops being free the moment you stop being available.

Capital reserves. Roofs, HVAC, water heaters, and flooring have known lives, and in Michigan the roof deserves particular respect for the reasons in Section 2: no matching requirement, unhelpful caselaw, ACV endorsements past roughly 15 years, and a rebuild cost per square foot that exceeds market price per square foot on a typical house. The 5%-of-rent convention used above is one option. A harsher and equally common convention is 1% of purchase price a year for maintenance and 1% for capital, which here is $2,999 each. Run that way: total operating expenses $14,540.81, expense ratio 65.86%, NOI $7,539.19, cap rate 2.51%, cash flow -$868.16 a month, DSCR 0.42.

So the honest cap-rate range for this property is 2.51% to 3.71% depending on which reserve convention you choose. Choose one deliberately — and note that in Michigan the price-based convention is arguably the more honest one, because it scales with the thing you actually have to rebuild rather than with the rent.

What would actually have to be true

The rent this property needs. For cash flow to reach zero at this price and this financing, gross scheduled rent must reach about $33,368.09 a year, or $2,780.67 a month — 0.93% of purchase price per month. That is close to the old "1% rule," which at 2026 financing costs is roughly the point at which a leveraged single-family rental stops bleeding. The assumed $2,000 rent is 0.67% of price.

The price this rent supports. Hold rent at $2,000 and solve for the price at which cash flow reaches zero with 25% down: about $204,884, or 68% of the statewide median. Notably, that is close to Wayne County's actual median of $224,327 — which is exactly why Detroit-area rentals attract cash-flow investors, and exactly why Section 5 has to talk about what Wayne County's insurance does to that arithmetic.

The down payment this price needs. Keep the $299,900 price and the $2,000 rent and solve for the loan the NOI can service: about $139,500 — which means roughly $160,400 down, or 53.48% of the price.

5. What actually varies by county here

Michigan's county variation is the widest in this Midwest set, and it runs on insurance more than tax.

Take the identical $299,900 house at $2,000 rent and apply each county's actual tax rate and average premium:

A $3,545.72 a year swing in NOI between Oakland and Wayne on the same house at the same rent, and 1.18 percentage points of cap rate. Property tax contributes $839.72 of that. Insurance contributes $2,706 — more than three times as much.

Now run each county at its own real median price and a rent assumption scaled to it, which is where the Michigan trap closes:

• Oakland County at $395,000 with a $2,600 assumed rent, 1.23% tax ($4,858.50) and $1,546 insurance: cash in $112,575, NOI $16,309.10, cap rate 4.13%, cash flow -$611.87 a month, cash-on-cash -6.52%, DSCR 0.69, rent-to-price 0.66%.
• Wayne County at $224,327 with a $1,600 assumed rent, 1.51% tax ($3,387.34) and $4,252 insurance: cash in $63,933.20, NOI $6,338.26, cap rate 2.83%, cash flow -$591.15 a month, cash-on-cash -11.10%, DSCR 0.47, rent-to-price 0.71%.

Read that pair carefully, because it is the most counterintuitive result in the Michigan article. Wayne County has the better rent-to-price ratio (0.71% vs 0.66%), needs 43% less cash to enter ($63,933.20 vs $112,575), and produces a cash-on-cash return 4.58 points worse. The cheap market is the expensive one.

Three reasons, all of them in the data above:

1. Insurance is 1.90% of purchase price a year in Wayne County ($4,252 on a $224,327 median) against 0.39% in Oakland ($1,546 on $395,000). That single ratio is the whole story.
2. The tax rate is higher too — 1.51% against 1.23% — so the cheaper county is worse on both fixed lines.
3. Rebuild cost does not fall with price. The $224,327 house still costs roughly $345,000 to rebuild at 1,500 square feet, so the dwelling limit — and therefore the premium — is set by a number that has nothing to do with what you paid.

Two further county-level facts to check for a specific address, neither of which is in a county average:

Millage varies enormously between adjacent local units. Michigan property tax is levied by city or township and school district, not by county. Two houses a mile apart across a municipal boundary can have materially different total millage, and a county effective rate averages all of it away. Get the parcel's actual millage from the local assessor.

Rental licensing and inspection are municipal. Detroit, Grand Rapids, Ann Arbor, and many other Michigan cities operate rental registration and certificate-of-compliance regimes with real teeth — including, in some cities, restrictions on collecting rent while a property is unregistered. Check the specific city before you underwrite, not after you close.

6. Financing a rental is not financing a home

These are the standard mechanisms across the mortgage market. Any specific rate or overlay is your lender's, not this article's.

Down payment. Conventional financing on a non-owner-occupied one-unit property generally requires more equity than an owner-occupied purchase — 20% is usually the floor and 25% the common expectation, which is why this article models 25%. FHA and VA are not available for a property you do not occupy. The genuine exception is house hacking: a two-to-four-unit property you live in one unit of qualifies for owner-occupied programs.

Rate. Investment-property loans price above owner-occupied loans. Fannie Mae and Freddie Mac apply loan-level price adjustments for investment occupancy that scale with loan-to-value and credit score; lenders pass those through as rate or points. The 7.00% modeled above is an assumption. Get a real quote.

Reserves. Lenders typically require post-closing reserves — months of principal, interest, taxes, and insurance held in liquid assets — scaling with the number of financed properties you own.

Rental income counting. Lenders credit a portion of market or lease rent toward qualifying, not all of it. Ask what percentage yours uses and whether they need an appraiser's rent schedule.

DSCR loans. A debt service coverage ratio loan qualifies the property rather than the borrower, comparing property income to debt service and largely skipping personal income documentation. The trade is a higher rate, a larger down payment, frequent prepayment penalties, and a minimum DSCR — commonly stated at or above 1.0 and often above 1.2.

Look at Section 3. This property's DSCR is 0.62, and even with vacancy, management, and reserves stripped out it is 0.92. It does not qualify at 75% loan-to-value on either version — and the stripped-out version's proximity to 1.0 is precisely the illusion Section 4 exists to break.

Two Michigan-specific financing points:

The tax escrow will be wrong if the lender uses the seller's bill. Because taxable value uncaps after transfer and the PRE comes off, a first-year escrow built on the seller's number will be short, and you will absorb the shortfall in year two as an escrow adjustment on top of the higher bill itself. Ask the lender in writing which figure they escrowed.

Low-value properties can be hard to finance at all. Many lenders apply minimum loan amounts, and in parts of Wayne County a purchase price below that floor pushes a buyer to cash, a portfolio lender, or a local credit union. That is a financing constraint, not a property defect, but it changes who your competition is.

7. What to check before you buy in this state

Property tax, from the parcel rather than the listing — this is first in Michigan.

1. Get the state equalized value and the taxable value from the local assessor, and understand that taxable value uncaps to SEV the year after transfer.
2. Get the total millage for the parcel's local unit and school district, and add back the school operating millage (up to 18 mills) that the Principal Residence Exemption was removing for the current owner. Your rental does not get the PRE.
3. Compute the bill yourself from those two figures. A statewide 1.19% is for articles.
4. Check for special assessments on the tax bill — road, sewer, and lighting districts are common in Michigan townships and are invisible in an effective-rate average.

Insurance, and specifically the coverage limit rather than only the premium.

1. Get a bindable landlord policy quote for the specific address — a dwelling fire form with loss-of-rents coverage, not a homeowners quote and not a statewide average.
2. Ask for the carrier's replacement cost estimator output and check the square footage and construction class it used. At roughly $230 per square foot, a 1,500 square foot Michigan house rebuilds for about $345,000 — which is above the statewide median sale price and 53.79% above Wayne County's median.
3. Do not set the dwelling limit from the purchase price or the loan amount. Check any insurance-to-value or coinsurance requirement, which is measured against replacement cost and can reduce recovery on partial losses too.
4. Read the deductible section and look specifically for a separate wind/hail line. Michigan does not have one as a statewide norm, but many policies carry one at 1% or 2% — $3,000 to $6,000 on a $300,000 limit.
5. Get the roof age in writing and ask whether the roof settles at replacement cost or actual cash value, and whether a cosmetic damage exclusion is attached. Fifteen years is the threshold that matters, and Michigan caselaw does not require matching.
6. Confirm the policy carries loss of rents and find out how many months it pays.
7. Flood and sewer backup are separate. No property policy covers flood, and water/sewer backup is an endorsement — relevant in older Michigan housing stock with basements, and the Detroit metro has had large-scale basement flooding events.

The rent, from the market.

1. Pull three to five genuine comparable rentals for the specific neighborhood and note how long they sat.
2. Divide monthly rent by purchase price. Section 4's breakeven for this example was 0.93%.

The law, from the statute rather than from an article.

1. Do not take eviction timelines, notice periods, security-deposit handling, or late-fee rules from a blog — including this one. Michigan landlord-tenant obligations sit across several acts, including the Landlord-Tenant Relationships Act (Act 348 of 1972), the Truth in Renting Act (Act 454 of 1978), and the summary proceedings provisions at MCL 600.5701 and following. Read them at the Michigan Legislature's own site, https://www.legislature.mi.gov/, or have a Michigan real estate attorney walk you through them.
2. Check the city separately, and do it before you make the offer. Michigan rental registration and inspection regimes are municipal, and some cities restrict what an unregistered landlord may do.

The money and the tax treatment.

1. Size your cash reserves against a roof replacement at Michigan rebuild cost, not against a month of mortgage payments.
2. Ask a Michigan CPA how the property will be taxed, including depreciation, passive activity loss rules, Michigan's flat state income tax, and treatment on sale.

What to do next

Every figure above came from a data file or was computed in front of you. Re-run all of it with your own numbers.

The Michigan rental analysis calculator does exactly the work in Sections 3 and 4 — enter your price, your real local rent, and your own vacancy, management, and reserve assumptions, and it produces NOI, cap rate, cash flow, cash-on-cash, and DSCR. It also warns you when you have left out the expenses Section 4 is about, rather than letting them pass silently. Given that Michigan's naive PITI check misses by only $24.33 while the honest analysis loses $568.33 a month, that warning is the whole point here.

The Michigan insurance premium estimator will get you closer to a real figure than the $2,766 statewide average, and — more importantly in this state — it works from a dwelling limit rather than a purchase price, which is the distinction Section 2 is about.

The Michigan mortgage payment calculator gives you the principal and interest figure for the rate you are actually quoted, which Section 3 shows is worth about $1,812 a year per point.

This article is general educational information about rental property arithmetic in Michigan, based on figures current as of August 2026. It is not investment, tax, insurance, or legal advice. The rent figures in the worked examples are stated assumptions, not market data. Insurance premiums, property tax assessments, and mortgage rates change and vary by property. Consult a Michigan CPA, a licensed Michigan insurance agent, and a Michigan real estate attorney before buying.