Best College Towns for Rental Investments in Michigan: Where Landlords See the Biggest Returns

Picture this: It’s late August in Ann Arbor. The streets are buzzing, moving trucks line the curbs, and coffee shops are packed with students and parents. If you own a rental here, you know your phone will ring off the hook with inquiries.

Michigan’s college towns have a unique magic — consistent demand, seasonal turnover, and an almost built-in tenant base. For landlords, this translates into fewer vacancies and predictable income. And in a market where some areas slow down in winter, college towns often keep moving, even when the snow piles up.

In this post, we’ll explore the best college towns for rental investments in Michigan, why they perform so well, and how to leverage local programs like MI Home Loan, MSHDA Assistance, and city-specific grants to make your purchase easier.

Table of Contents

1. Why College Town Rentals Work in Michigan
2. Top College Towns for Rental Investments
   • Ann Arbor – University of Michigan
   • East Lansing – Michigan State University
   • Kalamazoo – Western Michigan University
   • Grand Rapids – Multiple Colleges
   • Marquette – Northern Michigan University
3. Seasonal and Weather Considerations
4. Local Resources for Michigan Real Estate Investors
5. Tips & Warnings
6. Conclusion
7. FAQs

Why College Town Rentals Work in Michigan

College towns create steady rental demand. Students, faculty, and staff all need housing, which means you’re rarely scrambling to find tenants. Unlike traditional rentals that may sit empty during Michigan’s slow winter season, college rentals follow the academic calendar, making occupancy more predictable.

Another advantage? Higher rental yields. College tenants often pay per room, which can outperform standard lease rates. Plus, if your property is near campus, transportation hubs, or coffee shops, you can charge a premium.

Top College Towns for Rental Investments

Ann Arbor – University of Michigan

Ann Arbor isn’t just a college town — it’s a vibrant, artsy community with strong property values. While home prices are higher here, rental demand is rock solid.

• Median Rent (2025): Around $1,700 for a 2-bedroom apartment.
• Key Rental Drivers: High student enrollment, medical professionals from Michigan Medicine, year-round events.
• Investor Tip: Focus on smaller multi-family homes near Kerrytown or the Old West Side for both student and young professional tenants.

📍 Use here an image of Real Estate Market Trending in Ann Arbor

East Lansing – Michigan State University

East Lansing offers a lower entry price than Ann Arbor with similar high occupancy rates. MSU’s massive student body means landlords can fill units easily, even in winter.

• Median Rent (2025): Around $1,300 for a 2-bedroom unit.
• Key Rental Drivers: Over 50,000 students, athletic events, research staff.
• Investor Tip: Homes within walking distance to Grand River Avenue command higher rent.

📍 Use here an image of East Lansing downtown with students

Kalamazoo – Western Michigan University

Kalamazoo’s cost-to-rent ratio is one of the most appealing in Michigan. It’s also home to Kalamazoo College and offers a tuition-free scholarship program for local students, which draws families to the area.

• Median Rent (2025): Around $1,200 for a 2-bedroom.
• Key Rental Drivers: Multiple schools, growing craft beer industry, walkable downtown.
• Investor Tip: Duplexes and triplexes near WMU campus are prime investments.

📍 Use here an image of Kalamazoo campus housing

Grand Rapids – Multiple Colleges

Grand Rapids isn’t tied to just one university. With Grand Valley State University’s downtown campus, Calvin University, and Aquinas College, the rental pool is diverse.

• Median Rent (2025): Around $1,500 for a 2-bedroom.
• Key Rental Drivers: Strong economy, booming arts scene, steady job growth.
• Investor Tip: Look in Heritage Hill for historic properties that appeal to grad students and young professionals.

📍 Use here an image of Grand Rapids skyline with college buildings

Marquette – Northern Michigan University

For investors looking north, Marquette offers a unique market. NMU’s student base plus outdoor recreation tourism keeps rentals competitive.

• Median Rent (2025): Around $1,100 for a 2-bedroom.
• Key Rental Drivers: Lake Superior views, year-round outdoor activities, steady campus population.
• Investor Tip: Winter maintenance costs are higher here — factor in snow removal when calculating returns.

📍 Use here an image of Marquette waterfront in winter

Seasonal and Weather Considerations

Michigan’s winters can be brutal, especially in the Upper Peninsula. This impacts maintenance costs and tenant turnover timing. Most leases in college towns align with the school year (August–May), but savvy landlords offer summer sublets to keep cash flow consistent.

Snow removal, heating costs, and insulation should be part of your annual budgeting. A property that’s poorly winterized can quickly eat into profits.

Local Resources for Michigan Real Estate Investors

• MI Home Loan Program – State-backed mortgage program for qualified buyers (Michigan.gov/MIHomeLoan).
• MSHDA Down Payment Assistance – Up to $10,000 for first-time buyers in certain cities (Michigan.gov/MSHDA).
• Detroit Down Payment Assistance Program – Grants for buying in eligible Detroit neighborhoods (DetroitMI.gov).
• Local Credit Unions – MSU Federal Credit Union, Lake Michigan Credit Union.
• City Rental Licensing Programs – Ann Arbor, East Lansing, and Kalamazoo require rental licensing — check each city’s website for details.

Tips & Warnings

Do:

• Target properties within walking distance to campus.
• Factor in seasonal maintenance costs.
• Screen tenants carefully — student rentals can mean higher wear and tear.
• Explore multi-unit properties for better cash flow.

Don’t:

• Ignore local zoning and rental licensing laws.
• Assume every student will stay a full lease term — turnover is high.
• Underestimate furnishing costs if offering fully furnished units.

Conclusion

Michigan’s college towns offer some of the most stable and profitable rental opportunities in the state. From Ann Arbor’s prestige to Kalamazoo’s affordability, there’s a market for every investor type. The key is knowing each city’s unique tenant base, seasonal challenges, and local regulations.

If you’re ready to explore your next investment in a Michigan college town, Brick By Brick Investments can help you find the right property, connect you with local programs, and guide you through the process from start to finish.

FAQs

1. Which Michigan college town has the highest rental yield?
East Lansing often offers the best yield due to lower property prices and high student demand.

2. Are Michigan college town rentals seasonal?
Yes, leases typically follow the academic year, but demand remains high year-round in larger towns.

3. What is the best loan program for Michigan rental investors?
The MI Home Loan and MSHDA Assistance programs are strong options for qualified buyers.

4. Do I need a rental license in Ann Arbor?
Yes, the city requires all rental properties to be licensed and inspected regularly.

5. Are winter costs higher for rentals in the Upper Peninsula?
Yes, snow removal, heating, and weatherproofing add extra expenses in places like Marquette.

6. Is Grand Rapids considered a college town?
Yes, though it has multiple schools, it also has a strong job market that supports rental demand.

7. Can I charge per room instead of a flat rent?
In many college towns, yes — this can boost your returns, but check your lease laws.

8. Are furnished rentals more popular with students?
Yes, especially for out-of-state or international students.

9. Do Detroit’s college areas have strong rental markets?
Wayne State University’s Midtown location drives steady demand in surrounding neighborhoods.

10. What’s the best time to buy in a Michigan college town?
Spring and early summer allow you to prepare for the August move-in rush.