your money would be better invested in the bank - even at a 2% return
Not hardly. A major national bank is currently offering savings account holders a whopping 0.2% on tradional savings accounts. At that rate, a deposit of $7,000 would earn you 7,000 x .2= $14.00 in capital gains annually. Unfortunately, over the course of that year the real value of your account would decrease due to inflation; at the 2006 rate (3.39%) the value of your $7000.00 would have decreased to $6762.70 by year's end. Add in the $14.00 you made in interest over the same period and that brings the net value of your $7000.00 deposit to $6776.70. That's right — with a savings account, you pay the bank to hold your money!
And other forms of bank investments aren't much better. Take certificates of deposit for example; the best rate of return I could find for a 1-year CD was 5.27% annually. If you dumped $7000.00 into that CD, it would earn you $369.00 by year's end. Less inflation, your total account value of the certificate at surrender would be $7,131.70, for a net gain of $131.70. Pathetic.
From what little I've seen of the house in question on the internet, it's not worth $7,000. I figure it would take between $25,000 and $50,000 to gut it, renovate it, bring it up to current code, and install the necessary security to protect it from local feral humans. However, it would only cost a few thousand bucks to bulldoze it flat and fence it, and the taxes on an empty lot can't be more than a thousand or so a year. Therefore, the property would be a good investment provided that all you wanted to do is squat the land. Detroit is in an excellent location; sooner or later, some government or another (and not necessarily the ones we have now) is going to come, drive the vermin out (or kill them off), and rebuild the city. At the point — provided that records still exist and deeds are still honored by the new government — the property will once again become valuable ("location, location, location") and can be sold at a handsome profit.