Home to the Minnesota Vikings and the world-famous Mall of America and Mayo Clinic, the Minneapolis metropolitan area is home to far more than just polite Midwesterners and a low crime rate. Boasting exceptional artistic and cultural institutions, Minneapolis has made a name for itself as an excellent place to live, work and play. Although the Minneapolis cost of living is higher than the national average, its low unemployment rate and strong job growth makes it an excellent choice for those looking for a new place to call home.
Minneapolis was recently named the healthiest city in America by Liveability.com, and was designated the most literate city in America by a 2015 Central Connecticut State University study.
Q2 2015 Minneapolis Rental Market Update
In Q2 2015, Minneapolis was the ninth-best Midwestern housing market to own rental properties in and 42nd-best in the country as a whole. Since Q1 2015, Minneapolis fell eight spots in the Rental Ranking Report's regional rankings for the Midwest and a whopping 34 spots in the national rankings.
Admittedly, conditions in the Minneapolis rental real estate market are far from ideal. Its low Q2 2015 annual rental price appreciation of just 2.03 percent is hardly inspiring (the average during that time period was 4.98 percent), as was its poor year-over-year property value appreciation rate of 3.60 percent (compared to the average of 5.08 percent). Minneapolis's below-average job growth seems to indicate that demand for housing is unlikely to spike there anytime soon.
Regardless, Minneapolis rental real estate can still be a lucrative investment. The capitalization rate, which compares annual rents and property values, was 6.69 percent for Minneapolis rental real estate in Q2 2015. While slightly below the national average of 6.82 percent, Minneapolis's "cap rate" is hardly unimpressive and should be enough to convince any rental property investor that rentals in the Twin Cities are a good investment. Minneapolis's low median age of inventory (51 days, almost two weeks under the national average) and middling vacancy rate should do the same.
Q1 2015 Minneapolis Rental Market Update
It shouldn't come as a surprise that the Minneapolis rental market is currently quite hot. The Q1 2015 Rental Ranking Report found Minneapolis to be the best city for rental property investment in the the Midwest and eighth-best in the U.S. as a whole. These high rankings are largely due to the fact that Minneapolis rents jumped 5.36 percent over the year ending in Q1 2015, an increase almost twice as high as the national average rental price appreciation of 2.71 percent. A fairly strong regional job market (Minneapolis experienced 2.10 percent annual job growth last quarter) contributed to the demand responsible for these steep rental price increases.
Broader housing market stats also indicate that demand for Minneapolis housing is exceptionally high. Vacancy rates there are just 4.40 percent, almost 40 percent lower than the national average of 7.12 percent. Homes for sale only stay on the market for a median of 43 days, the sixth-lowest median days of inventory in the entire U.S.
What data is this Rental Ranking Report based on?
To calculate the statistics found in the Q2 2015 Rental Ranking Report, All Property Management gathered data, including the most recent government housing and jobs data, for 75 metros across the United States. Specifically, we looked at home vacancy, capitalization, home value appreciation and job growth rates, changes in rental prices, and the average number of days properties have been on the market to determine which U.S. metros will give investors the highest returns on rental investments. Click here to learn more about the Rental Ranking metrics.
Should I invest in Minneapolis rental property?
Thinking about renting out a property in Minneapolis? Save time, avoid hassle and maximize your rental income by having a professional property management company operate your rental property for you. Click here to get a free quote from a local property manager or call 877-780-4510 to have the All Property Management staff get quotes for you.
All Property Management specializes in connecting rental property owners with professional property managers in communities across the United States. These property managers help set rental rates, advertise properties, screen and manage tenants, collect rent, manage vendor relationships and ensure compliance with local, state and federal housing regulations. They take the hassle and worry out of managing rental properties - all while maximizing rental property owners' rental incomes.