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Updated about 2 years ago on . Most recent reply
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Minneapolis and Saint Paul pass rent control!
How will the newly passed rent control measures affect how you invest in the Minneapolis - Saint Paul area?
- Jordan Moorhead
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- 512-888-9122
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I smell opportunity for the well trained investor! Hopefully this super restrictive form of rent control passed in Saint Paul is only a short term headwind. Yes it has to be in place for minimum of a year, but the mayor has already stated while he is for rent control, he wishes to quickly make changes to this policy if it passes to still encourage outside investment and development which is needed in the city . That’s nothing to bank on though, as it isn't easy for him to do that.
While this is in place investors are obviously going to have to analyze deals in Saint Paul differently going forward. The typical value add strategy of rehabbing & increasing rents will need to be scrutinized as the renovation investment may not make sense if rents cannot be raised to account for the rehab. On that same note, investors will definitely need to be sure to check the leases in place on a property before offering. Owners who have kept their rents closer to market will likely be able to charge a premium for their properties at sale as the new owner won't have to worry about never catching the market rents with the 3% cap. This could also put more pressure in Minneapolis investments until things are more clear on what/if/how rent control will be implemented there.
Interesting times for sure. In any market there are ways to make money, things like this just make us as investors have to think about how we can do so with the current situation. Can't change the market, just what you do with it.
- Mike Moe
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