2 Bedroom / 1 Bath Rent Prices in Northeast Minneapolis

[Jack Gardner]

Hello all - 

I am in the process of purchasing a duplex in Northeast Minneapolis and wanted to see if anyone had information on rents in Northeast. Are they going up? Going down? What's the median? Expectations for increases or decreases in the future? I've seen a lot of positive feedback about Northeast, though I have not spent any time there myself. Any info on the area would be appreciated. 

[Bryon Andrews]

Hey @Jack Gardner I have helped a handful of clients purchase duplexes in NE. In my experience, it depends on which part of NE you are located. Like any neighborhood, some areas bring in more rent than others. Also, some areas call for higher quality finishes than other. Lots of investors utilize rentometer.com. I also like to cross-reference that data with Facebook marketplace, craigslist, Zillow and apartments.com listings to get a really good idea of expectations for rent in a specific area.

[Tim Swierczek]

@Jack Gardner I like @Bryon Andrews's answer. I have owned several duplexes in the Windom area of NE. A nice but rental quality unit gets 1500-1650 regularly in that area depending on the size and finishes. Other areas near the arts area get more and large units can easily be 1800. You will need to compare your unit to the competition. The problem is this time of the year does not have much turn and the units available are not representative of your true competition.  NE Minneapolis has strong rental demand, but no area is hot in the Winter. You will likely need to sit on the unit for a long time or reduce initial rent below the market for that unit to rent during the Winter. account for this by either offering a Winter special that will increase to market in the Spring or doing a short lease that ends in the Summer. Either way, do not sign a 12-month lease. I would recommend a custom term that is about 18 months.  Good luck and reach out if you want to talk.

[Jack Gardner]

Thanks to both of you for the replies. I was getting worried because I saw the rents in the winter were super low compared to what Rentometer spits out. I'm understanding now that the winter is just not a good time to have an open unit. I plan to sign a six month contract and see what happens from there. 

The property I purchased is in Logan Park neighborhood, west of the railroad tracks. I'm hoping to get $1600 for my 2bed/1bath units, but would be happy with $1500. 

[Matt Vohnoutka]

Hey @Jack Gardner, congrats on the property in Northeast! I have an up-down duplex a few blocks to the west in the Sheridan neighborhood - both units are 1+Den/1BA apartments. I fully renovated the upper unit with well-above-average finishes, and it's been averaging ~$2,850/month in gross rental income over the past 12 months as an STR on Airbnb. If I wanted to transition it to an LTR in the future, my best guess is that I could probably find a tenant for around $1,700-1,800/month without too much issue. It's an 860sf unit, so it would be right around the $2.00/sf mark as a LTR, if not a bit higher.

I inherited an existing long-term tenant in the first floor apartment, so that unit isn't in nearly as good shape as the fully renovated upstairs unit.  For an unrenovated 1+Den/1BA LTR in our section of Northeast though, $1,300-1,400/month is certainly in the ballpark of what I could comfortably get with some very minor improvements to the space between tenants.

So all that being said, I think your target of $1,500-1,600/month for your 2BR units would be more than doable.  @Bryon Andrews was spot on in his advice too - do some Zillow and FB Marketplace surfing every few weeks to see what rents in the blocks near your property have been renting for recently, and track how those fluctuate over time for a few months.  Aside from the standard BR/BA count and square footage, I always focus heavily on the listing pictures for any comps I pull in my area - finding a comp that's as close to your property's condition and finishes will give you the best apples-to-apples comparison possible.

I also wanted to second @Tim Swierczek's input: nobody in Minnesota likes moving in the middle of winter.  Demand for February/March move-ins should see a notable uptick sometime in January, but you'll for sure see your strongest rental demand in late spring/summer.

Your most recent post mentioned that you were going to look for someone for a 6-month lease - I think this is a great way to approach it to minimize vacancy loss while biding your time until we get into the higher demand summer months.

Getting creative with your lease term and credits/concessions could also be a good way to solve a few potential problems in one shot.  For example, instead of an initial 6-month lease at $1,200/month, and then re-renting it in the summer with a higher rental rate, you could market it as a 16-18 month lease term (again, great suggestion by Tim) at $1,600/month with a "1 Month of Free Rent" special which you could either divide evenly across just the first 4-6 months of the lease, or prorate over the entirety of their lease term.  Structuring your lease in this way would benefit you by 1) locking in a longer term contract to avoid turnover costs and vacancy loss; 2) it moves your lease end date out of the winter season and into spring/summer of 2026 so it can be more easily marketed and re-rented to match the seasonal demand cycle; and 3) it avoids any upset/angry tenants who may have been incorrectly assuming their rent was going to stay in the $1,200 range after their first 6-month lease term.

Would love to hear any updates you have on how this one shakes out for you though!