Best Places To Buy Rental Property In Minnesota For 2025

Most people don’t think of the Minnesota real estate market as a top-tier destination for real estate investing, but that’s exactly what makes it such an exciting opportunity. Whether you’re brand new to the game or you’re a seasoned out-of-state investor looking to expand, Minnesota offers something rare: a smart mix of affordability, steady rental demand, and long-term appreciation potential that flies under the radar.

From thriving metros like Minneapolis and St. Paul to college towns and hidden gems throughout the state, there are markets in Minnesota where the rent-to-price ratios actually make sense, and where strong tenants are waiting for good homes. That’s why more beginner real estate investors in Minnesota are jumping in right now, and why more experienced pros are quietly scooping up deals before the spotlight gets brighter.

If you’ve ever wondered where to invest in Minnesota real estate for real cash flow and future growth, you’re in the right place. This guide breaks down the Best Places To Buy Rental Property In Minnesota for 2025, what makes the state a landlord-friendly choice, and which markets stand out for ROI potential, even if you’re just starting out.

Here’s what we’ll cover:

• Why Minnesota Is One of The Best Places To Buy Rental Property
• Top 15 Best Places To Buy Rental Property In Minnesota
• The Best Places To Buy Rental Property In Minnesota: FAQ

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Why Minnesota Is One of The Best Places To Buy Rental Property

When most people think of real estate investing, their minds go straight to states like Florida, Texas, or California. But savvy investors are looking beyond what everyone else sees, and Minnesota is quietly becoming one of the Best Places To Buy Rental Property In Minnesota for 2025 and beyond.

Why? Because it checks all the boxes. The state offers a strong, diversified economy with consistent job growth across sectors like healthcare, education, tech, and manufacturing. The population is stable, and cities like Minneapolis, Rochester, and Duluth continue to see steady rental demand thanks to universities, regional employers, and a solid middle-class workforce.

Unlike coastal markets where entry costs are sky-high, affordable housing in Minnesota is still accessible to everyday investors. That means more potential for cash-flowing rental properties in Minnesota, especially in smaller towns and suburbs where the numbers just make more sense.

Plus, Minnesota offers a healthy mix of urban opportunity, suburban stability, and small-town charm. Whether you're looking to invest in a bustling college town, a blue-collar workforce hub, or a family-friendly neighborhood, this state has a little something for every strategy.

Here are three key reasons why Minnesota stands out as a top-tier rental market in 2025:

• Affordable Home Prices With Solid Rent Potential
• Strong Rental Demand In College & Workforce Hubs
• Investor-Friendly Local Laws

Affordable Home Prices With Solid Rent Potential

One of the most significant advantages of the Minnesota rental property market is its relative affordability, especially when you compare it to coastal states or booming Sunbelt metros where prices have skyrocketed. According to Redfin, the median home price in Minnesota is around $354,200. That’s well below the national average and provides a realistic entry point for many first-time investors.

Now combine that with the state's average rent, which sits at about $1,597 per month according to RentCafe. These numbers offer healthy rent-to-price ratios in many secondary markets—think Rochester, St. Cloud, or Mankato—making it possible to buy cash-flowing properties in Minnesota without needing a massive down payment.

This is a big deal for real estate investing in Minnesota for beginners. When your rental income covers your mortgage, taxes, insurance, and still leaves you with a monthly profit, you’ve got a winner. And unlike high-priced markets where breaking even is a victory, affordable housing in Minnesota allows you to aim higher.

That’s why smart investors are keeping their eyes on Minnesota: the numbers work, the prices are fair, and the path to passive income is within reach.

Strong Rental Demand In College & Workforce Hubs

One of the biggest advantages of investing in rental income properties in Minnesota is the steady demand created by college students and working-class tenants. Cities like Minneapolis (home to the University of Minnesota), Duluth, and Mankato all host major universities with thousands of students who need housing year-round. That kind of turnover isn’t a headache; it’s an opportunity to keep your units occupied and cash flowing.

But it’s not just about college towns. Many Minnesota cities with rental demand also serve as healthcare, manufacturing, and logistics hubs. For example, Rochester draws in healthcare professionals from around the world thanks to the Mayo Clinic, while Duluth’s shipping and industrial economy provides jobs for long-term renters. This blend of stable employment and educational institutions creates consistent leasing activity and low vacancy rates.

That’s why college towns' rental demand in Minnesota is so appealing. These areas offer built-in renter populations—students, faculty, medical staff, and blue-collar workers—all looking for clean, affordable places to live. New investors love these markets because leasing is easier, turnover is predictable, and the tenant pool rarely runs dry.

Whether you’re eyeing workforce housing in Minnesota or targeting student rentals, these hubs are ideal for building a resilient, profitable portfolio.

Investor-Friendly Local Laws

When it comes to landlord-tenant laws in Minnesota, there’s a healthy balance between protecting renters and respecting the rights of property owners. While larger cities like Minneapolis have introduced stricter regulations, such as the Rent Stabilization Charter Amendment and Tenant Protection Ordinances, many smaller markets across the state are still considered investor-friendly markets in Minnesota.

For example, counties outside the Twin Cities, like Stearns (St. Cloud) and Olmsted (Rochester), follow the Minnesota Statutes Chapter 504B, which governs rental housing statewide. These laws provide landlords with clear and enforceable rules for handling nonpayment, lease violations, and evictions. In fact, Minnesota allows landlords to file for eviction as early as the day after rent is due (if unpaid), and hearings are typically scheduled within 7–14 days, making the process fairly efficient by national standards. You can view more eviction details in the Minnesota Judicial Branch’s Eviction Process guide.

Why does this matter? Landlord rights in Minnesota can have a direct impact on your ability to protect your investment and maintain profitability. In markets where rental laws for property owners in Minnesota are clearly defined and fairly enforced, you gain peace of mind and more control over your business.

Read Also: How To Buy Your First Rental Property: A Step By Step Guide

Top 15 Best Places To Buy Rental Property In Minnesota

To identify the Best Places To Buy Rental Property In Minnesota, we looked at what really matters to real estate investors, especially those just getting started or exploring new markets. We analyzed affordability, rent-to-price ratios, population trends, job growth, and consistent rental demand across the state.

These aren’t just cities that look good on paper. These are places where real investors are closing real deals, collecting rent, and building long-term wealth. Whether you’re an out-of-state investor looking for high ROI rental markets in Minnesota or a local ready to start building your portfolio, this list has something for you.

The Minnesota housing market trends reveal that opportunities exist well beyond Minneapolis and St. Paul. So if you’re wondering where to invest in Minnesota real estate, here are 15 cities worth a closer look:

1. Minneapolis, MN
2. St. Paul, MN
3. Rochester, MN
4. Duluth, MN
5. Mankato, MN
6. St. Cloud, MN
7. Bloomington, MN
8. Eden Prairie, MN
9. Maple Grove, MN
10. Moorhead, MN
11. Burnsville, MN
12. Woodbury, MN
13. Lakeville, MN
14. Bemidji, MN
15. Brainerd, MN

Minneapolis, MN

Minneapolis is a great location for rental property investment in Minnesota, offering a balanced mix of affordability and rental demand. The median home price in Minneapolis is approximately $340,000, reflecting a 10.1% increase from the previous year, according to Redfin. Concurrently, the average rent for an apartment is about $1,669 per month, via RentCafe, indicating a healthy rent-to-price ratio conducive to cash flow.

The city's diverse economy, encompassing sectors like healthcare, education, and technology, ensures a steady influx of tenants. Neighborhoods such as Uptown and Northeast Minneapolis are particularly popular among renters, offering vibrant communities and amenities. For beginner real estate investors in Minnesota, Minneapolis provides a stable market with promising returns.

St. Paul, MN

St. Paul, Minnesota's capital, presents a compelling case for investors seeking cash-flowing rental properties in Minnesota. The median home price in St. Paul is around $296,000 as of February 2025, marking a 5.5% year-over-year increase, according to Redfin. RentCafe says the average rent stands at approximately $1,499 per month, offering investors a favorable rent-to-price ratio.

With a robust job market and a mix of urban and suburban neighborhoods, St. Paul attracts a diverse tenant base. Areas like Highland and Macalester-Groveland are known for their strong rental demand. St. Paul offers a blend of stability and growth potential for those looking to invest in Minnesota real estate.

Rochester, MN

Rochester is a standout city in the Minnesota housing market, largely due to its status as home to the renowned Mayo Clinic. The median home price in Rochester reached $335,000 in February 2025, a significant 13.6% increase from the previous year. Average rent in the city is approximately $1,612 per month, indicating strong rental demand.

The city's economy is bolstered by the healthcare and education sectors, attracting professionals and students alike. Neighborhoods near the downtown area and around the clinic are particularly sought after by renters. Rochester offers both appreciation and steady cash flow for investors aiming for high ROI rental markets in Minnesota.

Duluth, MN

Duluth offers a unique opportunity in the rental property investment landscape of Minnesota. The median home price in Duluth is approximately $273,000 as of February 2025, with a modest 1.6% year-over-year increase. While specific average rent data is limited, two-bedroom apartments range between $1,295 and $2,786 per month, suggesting a healthy rental market.

As a port city with a strong presence in shipping and education, Duluth attracts a consistent tenant base. Areas like East Hillside and Canal Park are popular among renters. For those seeking affordable housing in Minnesota with growth potential, Duluth is a city to consider.

Mankato, MN

Mankato is emerging as a promising location for real estate investing in Minnesota for beginners. The median home price in Mankato is around $274,000, reflecting an 11.8% decrease from the previous year. The average rent is approximately $1,362 per month, offering a favorable entry point for investors.

Home to Minnesota State University, Mankato benefits from a steady influx of students and faculty seeking rental accommodations. The city's diverse economy and growing population make it an attractive option for those looking to buy rental property in Minnesota with long-term appreciation potential.

St. Cloud, MN

St. Cloud is gaining traction among investors seeking cash-flowing rental properties in Minnesota. As of February 2025, the median home price in St. Cloud is approximately $270,000, reflecting a 12.7% increase from the previous year. Concurrently, the average rent for an apartment is about $1,114 per month, indicating a healthy rent-to-price ratio conducive to cash flow.

The city's economy is bolstered by sectors like healthcare, education, and manufacturing, attracting a steady influx of tenants. Neighborhoods such as Southeast St. Cloud and Pantown are particularly popular among renters, offering vibrant communities and amenities. For beginner real estate investors in Minnesota, St. Cloud provides a stable market with promising returns.

Bloomington, MN

Bloomington stands out as a prime location for rental property investment in Minnesota, offering a balanced mix of affordability and rental demand. In February 2025, the median home price in Bloomington is approximately $369,000, reflecting a 4.4% increase from the previous year. Concurrently, the average rent for an apartment is about $1,627 per month, indicating a healthy rent-to-price ratio conducive to cash flow.

The city's diverse economy, encompassing sectors like healthcare, education, and technology, ensures a steady influx of tenants. Neighborhoods such as West Bloomington and East Bloomington are particularly popular among renters, offering vibrant communities and amenities. For beginner real estate investors in Minnesota, Bloomington provides a stable market with promising returns.

Eden Prairie, MN

Eden Prairie offers a compelling opportunity for investors seeking high ROI rental markets in Minnesota. As of February 2025, the median home price in Eden Prairie is approximately $390,500, reflecting an 8.1% decrease from the previous year. Concurrently, the average rent for an apartment is about $1,744 per month, indicating a favorable rent-to-price ratio conducive to cash flow.

The city's robust job market, coupled with its proximity to Minneapolis, attracts a diverse tenant base. Neighborhoods such as Edenvale and The Bluffs at Nine Mile Creek are particularly popular among renters, offering vibrant communities and amenities. For real estate investing in Minnesota for beginners, Eden Prairie provides a stable market with promising returns.

Maple Grove, MN

Maple Grove is emerging as a top contender among investor-friendly cities in Minnesota. As of February 2025, the median home price in Maple Grove is approximately $404,495, reflecting a 6.4% increase from the previous year. Concurrently, the average rent for an apartment is about $2,036 per month, indicating a healthy rent-to-price ratio conducive to cash flow.

The city's strong economy, bolstered by sectors like healthcare, education, and retail, ensures a steady influx of tenants. Neighborhoods such as Rice Lake North and Brooklyn Park-Maple Grove are particularly popular among renters, offering vibrant communities and amenities. For rental property investment in Minnesota, Maple Grove provides a stable market with promising returns.

Moorhead, MN

Moorhead presents a unique opportunity for investors seeking affordable housing in Minnesota. As of February 2025, the median home price in Moorhead is approximately $115,000, reflecting a significant increase from the previous year. Concurrently, the average rent for an apartment is about $1,089 per month, indicating a favorable rent-to-price ratio conducive to cash flow.

The city's economy, supported by sectors like education, healthcare, and manufacturing, attracts a diverse tenant base. Neighborhoods such as Stone Mill Villas and South Moorhead are particularly popular among renters, offering vibrant communities and amenities. For real estate investing in Minnesota for beginners, Moorhead provides a stable market with promising returns.

Burnsville, MN

Burnsville offers a compelling opportunity for investors seeking cash-flowing rental properties in Minnesota. As of February 2025, the median home price in Burnsville is approximately $350,000, reflecting a 1.2% increase from the previous year. Concurrently, the average rent for an apartment is about $1,544 per month, indicating a healthy rent-to-price ratio conducive to cash flow.

The city's diverse economy, encompassing sectors like healthcare, education, and retail, ensures a steady influx of tenants. Neighborhoods such as Southcross and River Hills are particularly popular among renters, offering vibrant communities and amenities. For beginner real estate investors in Minnesota, Burnsville provides a stable market with promising returns.

Woodbury, MN

Woodbury stands out as a prime location for rental property investment in Minnesota, offering a balanced mix of affordability and rental demand. In February 2025, the median home price in Woodbury is approximately $450,000, reflecting a 1.1% increase from the previous year. Concurrently, the average rent for an apartment is about $2,014 per month, indicating a healthy rent-to-price ratio conducive to cash flow.

The city's robust job market, coupled with its proximity to St. Paul, attracts a diverse tenant base. Neighborhoods such as Bailey's Arbor and Stonemill Farms are particularly popular among renters, offering vibrant communities and amenities. Woodbury provides a stable market with promising returns for real estate investing in Minnesota for beginners.

Lakeville, MN

Lakeville offers a compelling opportunity for investors seeking high ROI rental markets in Minnesota. As of February 2025, the median home price in Lakeville is approximately $485,000, reflecting a 2.0% decrease from the previous year. Concurrently, the average rent for an apartment is about $1,850 per month, indicating a favorable rent-to-price ratio conducive to cash flow.

The city's strong economy, bolstered by sectors like manufacturing and healthcare, ensures a steady influx of tenants. Neighborhoods such as Crossroads and Lakeville Estates are particularly popular among renters, offering vibrant communities and amenities. Lakeville provides a stable market with promising returns for rental property investment in Minnesota.

Bemidji, MN

Bemidji presents a unique opportunity for investors seeking affordable housing in Minnesota. As of February 2025, the median home price in Bemidji is approximately $255,000, reflecting a significant 17.3% increase from the previous year. While specific average rent data is limited, the city's growing economy and status as a regional hub suggest a healthy rental market.

The city's economy, supported by sectors like education, healthcare, and manufacturing, attracts a diverse tenant base. Neighborhoods such as Nymore and Lincoln Park are particularly popular among renters, offering vibrant communities and amenities. Bemidji provides a stable market with promising returns for real estate investing in Minnesota for beginners.

Brainerd, MN

Brainerd offers a compelling opportunity for investors seeking cash-flowing rental properties in Minnesota. As of February 2025, the median home price in Brainerd is approximately $163,000, reflecting a 22.3% decrease from the previous year. Concurrently, the average rent for a 2-bedroom apartment ranges between $905 and $1,925 per month, indicating a favorable rent-to-price ratio conducive to cash flow.

The city's economy, bolstered by sectors like tourism, healthcare, and education, ensures a steady influx of tenants. Neighborhoods such as North Brainerd and South Brainerd are particularly popular among renters, offering vibrant communities and amenities. For beginner real estate investors in Minnesota, Brainerd provides a stable market with promising returns.

Read Also: How To Buy A Rental Property With No Money

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Read Also: Best Places To Buy Rental Property In 2025 For Investors

The Best Places To Buy Rental Property In Minnesota: FAQ

If you’re exploring real estate investing in Minnesota, here are some of the most commonly asked questions answered simply and clearly. These quick-hit responses are designed to give you clarity fast, whether you're new to the game or planning your next move. Let’s clear up the top queries about buying rental property in Minnesota and where the smart money is going in 2025.

What is the best city in Minnesota to buy rental property?

Minneapolis and Rochester are two of the Best Places To Buy Rental Property In Minnesota, offering strong rent demand and long-term growth potential.

Is Minnesota a good place to invest in real estate?

Yes, Minnesota has stable population growth, a diverse economy, and several investor-friendly cities with strong cash flow potential.

What cities in Minnesota have strong rental demand?

Cities like Minneapolis, St. Paul, Mankato, and Duluth consistently rank among the top rental markets in Minnesota due to colleges and major employers.

Where can I cash flow with rental properties in Minnesota?

Thanks to low home prices and steady rents, St. Cloud, Brainerd, and Moorhead are excellent places to find cash-flowing rental properties in Minnesota.

How are property taxes for landlords in Minnesota?

Property taxes for landlords in Minnesota vary by county but generally fall in the moderate range compared to national averages.

Are there landlord-friendly cities in Minnesota?

Yes, many areas outside the Twin Cities, like Rochester and Bemidji, offer landlord-friendly policies and efficient eviction processes.

Can out-of-state investors buy property in Minnesota?

Absolutely. There are no restrictions on out-of-state investors buying rental property in Minnesota, and local property managers make it easy to invest remotely.

What areas in Minnesota are best for appreciation?

Rochester, Woodbury, and Lakeville are known for strong job markets and long-term real estate appreciation.

Is real estate investing in Minnesota beginner-friendly?

Yes, thanks to affordable prices and diverse markets, real estate investing in Minnesota for beginners is both achievable and profitable.

What are the rent-to-price ratios like in Minnesota?

Rent-to-price ratios in Minnesota are especially favorable in smaller cities like Brainerd, Mankato, and Duluth, where monthly rents stack well against home prices.

Final Thoughts On The Best Places To Buy Rental Property In Minnesota

Minnesota may not always make the national headlines for real estate investing, but that’s exactly why it deserves your attention. With a blend of affordable home prices, strong rent-to-price ratios, a diverse economy, and consistent rental demand across both metro and regional markets, it offers opportunities that many investors overlook. Whether you're interested in steady cash flow, long-term appreciation, or building a beginner-friendly portfolio, this state has options to match nearly every strategy.

From college towns like Mankato to workforce hubs like Rochester and affordable gems like Brainerd, the best places to buy rental property in Minnesota are varied, accessible, and full of potential. And with clear landlord-tenant laws and plenty of investor-friendly cities, Minnesota is one of the most practical and promising states in the Midwest to grow your rental portfolio in 2025 and beyond.

Ready to Take the Next Step in Real Estate Investing? Join our FREE live webinar and discover the proven strategies to build lasting wealth through real estate.

Whether you're just getting started or ready to scale, we'll show you how to take action today. Don't miss this opportunity to learn the insider tips and tools that have helped thousands of investors succeed! Seats are limited—Reserve Your Spot Now!

*Disclosure: Real Estate Skills is not a law firm, and the information contained here does not constitute legal advice. You should consult with an attorney before making any legal conclusions. The information presented here is educational in nature. All investments involve risks, and the past performance of an investment, industry, sector, and/or market does not guarantee future returns or results. Investors are responsible for any investment decision they make. Such decisions should be based on an evaluation of their financial situation, investment objectives, risk tolerance, and liquidity needs.