Whether you’re buying a property to rent out, orchestrating a flip, or looking to take advantage of some creative financing, you’re probably wondering: What is the market telling us right now? We always have our fingers on the pulse of the Minnesota market, and we’re happy to confirm that it’s a fantastic time to invest! A lot of people think that it’s a good time to buy simply because interest rates are so low, but that’s not quite the full picture. About 50% of our investors are cash buyers, and they’re still making moves in this seller’s market.
If you’re looking to purchase a home for the purpose of renting it out, what factors indicate a strong rental market? Here in Minnesota, our price-to-rent ratio is at 13%. With the market being what it is, any ratio below 15% tells us that it’s probably more affordable to buy a home than it is to rent one; anything above 15% would tell us that the reverse is true. So, we’re still in a profitable market for investing.
Did you know that 55% of people living in this state currently rent a home? If you’re looking for a number to show you that there is ample demand in the rental market, then “over half the population of Minnesota” should suffice.
On the flip side (pardon the pun), if you’re looking to buy a property, fix it up, then put it back on the market in six months or so, you’ll see a return. The number of investors who are flipping properties has increased by 33% from 2020. They’re sensing opportunity in this year’s market—do you want to miss out on those enviable profits?
“It’s a fantastic time to invest!”
Since there is such a shortage of inventory, any home that has been completely renovated and made move-in ready will be flooded with offers after just one day on the market. There aren’t many homes to sell right now, so if you execute a flip properly and bring a great house to market, you’ll make some serious cash.
Here’s an important reminder: You don’t have to be a cash buyer to purchase an investment property. You just need 20% down, so talk to one of our go-to loan officers who know how to work these kinds of investments. While you’re at it, sit down with your trusted real estate professional to verify that your specific circumstances align with the current market such that an investment makes sense. We work with investors all the time, so we’d be happy to help you with that.
Hopefully, today’s message empowered you as an investor or at least piqued your curiosity. Stay tuned for our next discussion: Pulling off a purchase and a sale at the same time. Many would-be sellers are terrified that they’ll end up homeless if they sell now, and that’s a valid concern. Thankfully, we have proven strategies to share that will take the fear out of the equation.
As always, reach out to us by phone or email if you have questions about this or any other real estate topic. It’s our pleasure to act as your reliable real estate resource and assist with any buying, selling, or investing needs you may have. We look forward to hearing from you soon!
