Besides simply living in an apartment unit you own, have you ever considered leasing it out on a short-term basis? There are a lot of benefits to short-term rentals in the Twin Cities Metro area and depending on the value of your unit, as well as objective and subjective aspects of added-value, the potential returns-on-investment is something to seriously consider if you are debating leasing your unit out on a short-term versus a long-term basis.
In Minneapolis specifically, different unit value metrics will impact the amount of investment you will have returned to you overall if you take the route of STR. On average, a single bedroom apartment in Minneapolis will cost an investor about $188,000 a year, and about $254,000 for a two-room apartment, however, the average ROI is heavily impacted by several factors that can be objective, subjective, or even both at times.
On average, with objective factors in mind alone, a single-room apartment’s STR will come with an average daily rate (what you’d be charging per night of stay) around $188.33 in Minneapolis. With that, ROI would come to an aggregate $68,740.45 a year. Admittedly, it is safe to assume that you won’t have a tenant every single day of the year, so (for the sake of example) let’s assume you successfully rent out your apartment for 2/3 of the year, or (more specifically) 240 days a year – That would still yield about $45,369 on average.
Subjective factors are hard to measure with a calculator but must be considered as well. For example, geography to events and social venues can either increase or decrease the ROI for a short-term leased unit – As they say: “location, location, location.” If there’s a concert venue or sports arena next door – the demand will be inherently higher than if the apartment complex is a mile’s walk away from the nearest taproom. Additionally, things like the time of year as well as the reputation of the neighborhood therein can all come into play. In Minneapolis, for example, things like snow plowing and shoveling must be considered during the winter season, as well as sports teams that are in-season and have facilities near your apartment. To get a better idea of how these factors may impact your investment in a unit within the Minneapolis area, check out THIS link to see what values are listed and investigate what is in the area or events and social trends that are potentially in-place to deduce what kind of ROI you might be tapping into.
Here are a few examples of apartments for sale in Minneapolis, as well as some units that are living examples of short-term leasing byway of Airbnb to give you a better idea of what is out there, and whether or not you might want to take the next steps towards investing in an STL apartment in the Twin Cities.
Apartments For Sale
1821 1st Ave S #106 || $88,900
“Quaint and historic (1915) condo in the heart of Minneapolis 2 blocks from Franklin (Uptown) and a few blocks to downtown. Tall ceilings, oak, and maple flooring. Great location, there is a park nearby, bus lines, plenty of restaurants and shops. In-building laundry and storage unit. Cat or small dog (under 40 pounds) OK. Located on the first floor but the way they built these it’s actually above ground a half-floor. Has been rented for 3 years, the lease is up to end of June 2020. HOA $400. Great rental investment in an up and coming area.”
929 Portland Ave || $380,000
Live at Skyscape in this 2BR, 2BA corner unit w/panoramic views of Downtown Minneapolis. Enjoy the open floor plan & large balcony! The unit is upgraded throughout! Full amenity building 2 include 24hr door person, fitness center, outdoor 6th flr rooftop courtyard
700 Washington Ave N || $300,000
Two underground heated parking spaces. 1920 warehouse converted into 140 condos with huge walls of windows, 13 ft ceilings, designer kitchens & baths. Great views of the river and Minneapolis skyline.
Airbnb Listings
Most Desired Location in Uptown || $55 / Night
“You have the full condo to your self. It’s half a block from lake street. All the best restaurants are within walking distance. Bryant lake bowl is across the street. Prieto, Blue Door, Mucci’s and Morrissey’s and Up Down are one block from the condo. Famous Dave is also across the street. Moto-I and Jungle theaters are a block and a half. Lagos Tacos and Muddy Waters are blocks and a half.”
Stylish + Modern 2BR Apt in Downtown East || $69 / Night\
“Our Downtown East stay in Minneapolis is your perfect home away from home. The updated and modern suite includes amenities that make you feel like you’re traveling in style. The large windows that let in natural light, the hardwood floors, and trendy decor is just what you need to make your visit a top stay. The building is conveniently located near entertainment, delicious dining, and up and coming bars. You’re also located right by the Mississippi River, allowing for outdoor adventure.”