This is the story of an investor looking for condos in Detroit. The budget was around $100,000. There were many listings. The problem was the age of the buildings. Most were built in the 1970s, and when requesting the management documents, some lacked structural inspection records. Each listing required a personal visit. Some had complete documents, while others did not. The real estate agent also did not have all the management documents. Ultimately, direct contact with the management office was necessary. A few phone calls and emails determined the outcome of the contract.

The median home price in Detroit as of August 2026 is $99,800. This is a 5% decrease from the previous month and a 4% decrease from the previous year. As of April, the median condo management fee was $350 per month, with some luxury buildings exceeding $1,000. Across Michigan, one in five households pays condo and HOA fees, with a median of $125 per month. This indicates that management fees in Detroit are significantly higher than the state average. The reason is simple. Most Detroit condos are renovated from older buildings. New constructions are rare, leading to numerous maintenance issues.

The high management fees are closely related to the age of the buildings. Low management fees can quickly become a burden when it's time to replace roofs, perform waterproofing, or repair elevators. Especially for condos, shared structural costs can result in management fees being 25% to 60% higher than those for single-family home HOAs.

Michigan's condo law requires that reserve funds be maintained at a minimum of 10% of the budget, on a non-cumulative basis. This includes structural repairs, roof replacements, parking lot repaving, exterior work, and HVAC systems. However, the bill HB 5019, which mandates professional reserve studies, is still under review. This means that for older buildings, it becomes crucial whether the management has voluntarily conducted reserve studies. Following the Surfside condo collapse, there has been a trend towards stricter structural inspections and reserve fund regulations, particularly in Florida, which is also affecting Michigan. Although not yet legislated, more management groups are preparing in advance.

The investor mentioned earlier ultimately chose another building with structural inspection records. The management fees were slightly higher, but there was also a reserve fund in place. The assessment was that the likelihood of special assessments within a few years was low. In hindsight, the presence of documents was more important than a few dozen dollars difference in management fees.

Loan verification is also essential. If the reserve fund is less than 10% of the budget or if delinquent units exceed 15%, it becomes a non-warrantable condo. In this case, conventional loans are unavailable, leaving only high-interest portfolio loans. The 2026 Fannie Mae guidelines raised the reserve fund requirement to 15% of the budget. Older buildings are at greater risk of not meeting this standard. If loans are blocked, only cash buyers remain. This means fewer potential buyers. The same issue may arise when reselling later.

• Check the year of construction and recent structural inspection records
• Verify that the reserve fund is more than 10% of the budget
• Review meeting minutes for discussions on roofs, plumbing, and elevators
• Check the ratio of delinquent units and loan eligibility

If planning to rent, it's necessary to recalculate the actual yield excluding management fees and property taxes. A lower purchase price does not always guarantee a high yield. If management fees are higher than expected, the calculations change. Just checking the structural inspection records and reserve fund can help avoid significant mistakes. In short, don't just look at the price tag; request the documents first.

Detroit's low prices may make rental yield calculations seem attractive. However, the age of the buildings presents risks that are not immediately apparent. If coming from another state, it's also important to check Michigan's property tax system, as it may differ. This article is not investment advice. Consulting a professional before signing a contract is recommended.