Minneapolis, MN is one of the fastest-growing cities in the Midwest. With a state property tax rate at 1.17% (just under the national average) and a rapidly expanding population, Minneapolis is quickly becoming a bit of an unsung hero in the eyes of property investors.
For the enterprising investor looking to beef up their portfolio or even take their first step into the market, Minneapolis may very well be where you make your next move. Here’s a crash course covering all you need to know about the largest of the Twin Cities.
Become an Expert
Don’t live in Minneapolis? If you want to make your next investment venture in the City of Lakes, your priority should be to familiarize yourself with the details of this bustling metropolis. Keep an eye on vacancy rates, job growth statistics, which sectors are expanding and which are shrinking, and the capital growth potential for the property.
Can you name the fastest-growing neighbourhoods in Minneapolis? Recent trends suggest they’re not the areas that have traditionally seen steady growth but instead are formerly unpopular spots, like in the Warehouse District. And did you know there’s a higher market for renting vs homeownership in Minneapolis? All of this, combined with the city’s recent influx of millennial-aged professionals, will likely influence your decisions on where and what to invest in.
Once you know Minneapolis like a native and understand its demographic trends (along with ever-important details like local development laws and ordinances), you’ll be able to synthesize conclusions and make predictions on where your money will have the most effect. Go where the people are going and know who those people are.
Explore Your Options
It’s time to do a little networking. If you have any colleagues in Minneapolis or know anybody who’s already in the property market, start sending out some emails to get a general feel for the environment.
If you’re going in blind or just want a more in-depth look than what your connections are providing, tap into your other options. That means calling realtors, checking out developers in the area, and looking at government plans for infrastructure development. You can also use local tools like Roost Minneapolis to browse properties and connect with the people already in the thick of Minneapolis’ property market.
Don’t forget to keep an open mind. In a city as big and diverse as Minneapolis, you’ll have tons of investment opportunities in properties you’d never think to consider. Just be patient in your search and consult with the locals if you need a little insight.
Set Expectations – and Have a Sense of Scale
Real estate appreciation in Minneapolis is booming. But we all know appreciation rates are just estimates. In this day and age, it sometimes feels impossible to predict the next crash.
Your first step is to be prepared. Set aside the down payment you’ll need to obtain financing, keep a close eye on your cash flow, and make realistic expectations for your return on investment.
In other words, don’t expect Minneapolis to be the property investment unicorn you need to strike it big. In fact, Minneapolis is currently considered to be a seller’s market in the eyes of many, but that shouldn’t deter you. Values are still estimated to go up, so it’s best to get in now. As with all real estate ventures, results take time and hard work.
Be thorough and cautious with your market analysis, but don’t forget to act confidently and trust your instincts. Minneapolis has a bright future, so you should be thinking about your investment in the long-term.