Duluth Minnesota MultiFamily Rental Properties

[James Sauser Denesia]

Hello! I am looking at purchasing my first rental property in Duluth Minnesota (multi-family preferably) and I am looking for resources related to duplex/triplex landlord ordinances, rental property licenses, and other good to know information for a 1st time purchaser in this area!

[Michael Schraepfer]

Hey James!

Happy to help a bit here.  Most of this information is on the city of Duluth website but being every city is organized differently at first glance it might seem a bit discombobulated. Also - there is a TON of mis-information out there in our market on licensure in Duluth.  Literally half of the landlords and realtors out there have some part of what is required or allowed wrong.  The reason why is - from 2008-2016 the city council changed the rules literally yearly and there were a LOT of variations through that time period. Here's my best stab at how licensure works in Duluth:

1.  Any property can get a long term rental license in Duluth.  You'll still hear comments like, "well isn't there something about it needing parking", "or if it is too close to another rental", or "in some neighborhoods they are not allowed".  All of those were true at one point or another - but not anymore.  It has settled down the last 5 years with no changes and appears to remain so (they've focused on reinventing vacation rentals every year as of late - lol).  

2. A license costs $250 dollars plus $25/bedroom in the property.  

3. If the property is a single family or duplex and does not have an active license there is an additional $1500 "conversion" fee.  If it is a triplex or larger the conversion fee does not apply.

4.  Licenses are 3 years long, and at every consecutive renewal you pay $250 plus $25/bedroom.  

5. If it is a single family or duplex, the property needs to have 1 less parking spaces than there are bedrooms in the unit.  With a minimum of 2 spaces.  I.E. if it is a 4 bedroom house, it needs 3 spaces.  If it is a 1 bedroom house it needs 2 spaces. If you do not have the required parking, at every 3 year renewal you will need to pay an additional $100 per missing spot (which is pretty minor concession to allow any property to be a rental).  If the property is a triplex or larger - the parking requirements do not apply except in new construction.

6. A unit can only be licensed up to 5 bedrooms unless it is over 2500 SQFT, unless already previously licensed for more.  (don't let those licenses lapse).  

I hope this run-down helps.  Many rentals for sale will obviously come with a current license.  It costs $25 to transfer that license upon sale - that is very easy.  

Maybe in another post I'll go through what is a legal bedroom and the process for adding them! That often comes up when looking at new properties.  

Cheers!