Buying Investment Property in Minnesota, Numbers First
Buy rental and investment property in Minnesota with the numbers worked out before you make an offer.
A good investment starts with the math
Real estate can build wealth over time, and it rewards buyers who do the math before they fall for a property. The right purchase depends on what it costs, what it can earn, and what it takes to own.
I'm Lesley, a REALTOR® with Bridge Realty, and we help Minnesota buyers evaluate rental and investment property with clear eyes.
How do I buy a rental property in Minnesota? Start with your financing, since investment loans usually require a larger down payment than a primary home. Then compare each property's price, expected rent, and expenses, and confirm the city's rental licensing rules before you make an offer.
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The numbers to run before you make an offer
- Purchase costs. Down payment, closing costs, and any repairs needed before a tenant can move in.
- Expected rent. What similar homes nearby rent for today.
- Operating expenses. Property taxes, insurance, maintenance, utilities you cover, and association dues.
- Vacancy and repairs. Time between tenants and the roof, furnace, and appliances that will need replacing one day.
- Management. Your own time, or the fee for a property manager.
We help you gather these numbers for each property so you can compare them side by side. We are not financial or tax advisors, so we also encourage you to review the plan with your accountant.
Minnesota rules every landlord should know
Buying the property is only part of the work. Many Minnesota cities require a rental license and periodic inspections, and the requirements differ from city to city. Some properties also have association rules that limit or prohibit rentals.
We check these before you write an offer, because a home you cannot legally rent is not an investment. As a landlord you will also be responsible for following fair housing laws and Minnesota's landlord and tenant laws. An attorney can advise you on leases and your obligations.
Which type of property fits your goals?
- Single-family homes. Easier to finance and to sell later, with one tenant to manage.
- Townhomes and condominiums. Lower upkeep, with association dues and rental rules to review.
- Duplexes and small multi-family. More than one rent from one property. Some buyers live in one unit and rent the other.
- Land and farmland. A different kind of investment with its own questions. See our farmland page.
If you plan to sell one investment property and buy another, ask your tax professional about a 1031 exchange before you list. The timelines are strict, and the planning has to happen first.
Investment property across Minnesota
Rental demand and prices vary widely by community. We help investors compare areas such as Brooklyn Park, Brooklyn Center, Bloomington, and Cottage Grove, using recent sales and current rents in each one. For the steps of the purchase itself, see our buying a home page and how we help buyers.
Let's look at the numbers together
Whether this is your first rental or your next one, tell us your budget and your goals. We will help you find properties worth a closer look. No pressure and no obligation.
Send us a message or call (651) 661-4770. What questions do you have?
Frequently Asked Questions
How much do I need for a down payment on an investment property?
Investment property loans usually require a larger down payment than a primary home, and the amount depends on the loan and the property type. A lender can tell you what applies to you.
Do I need a rental license in Minnesota?
Many Minnesota cities require a rental license and inspections, and the rules vary by city. Always confirm the requirements for the specific property before you buy.
Is a duplex a good first investment?
It can be. A duplex produces two rents from one property, and some owners live in one unit while renting the other. Whether it fits depends on the numbers and your goals.
What is a 1031 exchange?
It is a way to defer tax on the sale of an investment property by buying another one under strict rules and deadlines. Speak with a tax professional before you sell.
What credit score do I need to buy a rental property?
Lenders generally look for stronger credit on investment loans than on a primary home, and requirements vary. A lender can review your credit and give you a plan if it needs work.
Investment Property by neighborhood
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In their own words, from clients across Minnesota.
★★★★★
“If you're looking for a realtor who never gets tired of driving anywhere and at anytime to show you housing options, then call Lesley. I had a lot of questions as it was my first time buying a home. She always took her time to explain everything. She responded even at midnight and was never angry even when I called her at odd hours. She was so patient and I am glad she helped me bought my first home. I will recommend her over and over.”
★★★★★
“Working with our realtor, Lesley, was a great experience from start to finish. She was very knowledgeable, helpful, and always made sure we understood every step of the process. She answered our questions and truly looked out for our best interests when negotiating and reviewing details. Buying a home can be stressful, but they made the process smooth and much easier for us. I would definitely recommend them to anyone looking to buy or sell a home.”
★★★★★
“Lesley is an amazing and experienced realtor. I have worked with different realtors in the past and I'll confidently say Lesley is top notch! You can count on her truly fighting and representing you through the whole process. She makes the process almost seem effortless due to her knowledge and expertise. Hire Lesley and you won't regret!”
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