If you had to guess, which state would you say has the fastest growing multifamily rental market in the US? Would you believe it to be North Dakota? If so, good guess.
That’s according to the latest report from REALTOR® magazine, the official magazine of the National Association of Realtors. North Dakota leads the top 10 states as the fastest growing rental market in the US.
Similar to Texas, North Dakota has a booming energy business, which is credited, in large part, for the state’s 13.4% GDP growth. It is also home to a strong agriculture market as well, however, which certainly has done its fair share of contributing to the state’s bottom-line. North Dakota is doing so well, it has a budget surplus, and it recently decided to reduce individual income taxes and property taxes by a combined $400 million.
Are people flocking? You bet they are. So it’s easy to understand the 2.7% population growth over the last calendar year. And, of course, property owners, investors, and managers are reaping the rewards.
Top Rental Markets in North Dakota
Bismarck Rental Market
Renters comprise 35.40% of Bismarck’s population and are credited for keeping the vacancy rate low, at around 5%. The market has a lot to offer, which is why it is consistently touted as one of the most attractive cities in the state of North Dakota, and even places it on CNN Money’s 2012 list of the 100 Best Places to Live (#74).
It is safe, has a low crime rate, and offers a wealth of job opportunities. In fact, Bismarck can proudly tout a 2.3% jobless rate, which is almost unheard of. It also has amazing views and parklands, plenty of recreation space and golf courses, and state-of-the-art healthcare.
Minot Rental Market
Much like Bismarck, the city of Minot also has an extremely large rental market at 38%, and a vacancy rate right at 5%. What is likely to be equally interesting to investors and managers is the fact that 32% of households have lived in the same spot for more than 5 years, demonstrating loyalty and a preference for long-term living situations.
According to one real estate agent’s promotional site, some of the most popular reasons Minot is so appealing include:
- An unemployment rate around 3%
- There is a housing shortage, yet 17,545 job openings in North Dakota, so the opportunity for continued rental market growth is great
- Prides itself on being the cultural and corporate center
- Is home to an Air Force base, which means several hundred airmen and their families call Minot home
- Minot State University makes the city a hot bed for students seeking rentals
Fargo Rental Market
As the largest city in the state, it shouldn’t be too surprising that Fargo has an appeal to the rental market and is rated #1 on the list of best places to rent in the state of North Dakota. In fact, a whopping 46% of the households in the city are rentals. Fargo ranks well on the scale of affordability with a onebedroom unit going for only 8% of the monthly median income for the area.
A large part of the attraction to this metropolis is North Dakota State University, which obviously brings quite a bit of demand from college students. Residents who aren’t averse to the harsh winters feel it’s worth living in Fargo just to experience its sprawling landscapes, rivers and lakes, and many wooded parks.
Also Making the List…
Ready to go to North Dakota to become a multi-family property investor in that market, or want to take your management company on the road? Wait till you see what the other nine markets on the Top 10 list have to boast. Texas, Oregon, Washington, Minnesota, California, Utah, Indiana, Tennessee, and West Virginia all made the list.
Stay tuned to this 10-part series as we continue the glimpse inside each of these markets.Read more on Real Estate Markets