Hinckley is home to the best residential real estate investment market in Minnesota.
The 55037 zip code in Hinckley presents the greatest opportunity for the best real estate investments among the 3,836 individual real estate markets in Minnesota we evaluated. We looked at property values, population trends, and six other metrics for each market. We used that data to calculate each market's InvestScore.
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Data sources
Most of the data in this article comes from the Zillow Home Value Index and the U.S. Census American Community Survey.
We update our data when the original sources update their data, usually monthly. Sometimes we'll update data more frequently.
Clever also performs regular quality checks to identify outdated data, broken data connections, and other data issues that may arise.
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5 best places to invest in Minnesota
| Rank | City | InvestScore | Affordability | Property value appreciation |
|---|---|---|---|---|
| 1 | Hinckley | 100 | 2.7 | 45% |
| 2 | Saint James | 98.8 | 2.4 | 92% |
| 3 | Austin | 96.2 | 2.6 | 42% |
| 4 | Duluth | 92.1 | 3.2 | 41% |
| 5 | Wadena | 91.8 | 3.2 | 41% |
🚨 This article is for informational purposes only. It isn't intended to convey financial or legal advice. We recommend you talk to a real estate agent or real estate attorney when buying a home in Minnesota.
1. Hinckley
We've identified the 55037 zip code in Hinckley as Minnesota's best real estate investment market. Here's why.
🔎 Key data about Hinckley (55037)
| Data point | Value | Rank in state (of 3,836 markets) |
|---|---|---|
| InvestScore | 100 | Highest |
| Typical property value | $182,364[1] | 13th lowest |
| Five-year appreciation | 45%[2] | 3rd highest |
| Household income | $68,380[3] | 204th highest |
| Affordability ratio | 2.7 | 13th most affordable |
| Five-year population growth | 2.7%[4] | 30th highest |
| Unemployment rate | 3.2%[5] | 5th lowest |
| Property taxes | $1,834[6] | 12th lowest |
| Educational attainment | 14%[7] | 185th highest |
Hinckley (zip code 55037) is the best residential real estate investment market in Minnesota. It has the 3rd highest property value appreciation among markets we evaluated, with a 45% appreciation of the typical property over the last five years.
Hinckley is the 13th most affordable market among the 3,836 Minnesota markets we evaluated, with an affordability ratio of 2.7.
2. Saint James
The 56081 zip code in Saint James is the runner-up spot for the best real estate investments in Minnesota.
🔎 Key data about Saint James (56081)
| Data point | Value | Rank in state (of 3,836 markets) |
|---|---|---|
| InvestScore | 98.8 | 2nd highest |
| Typical property value | $160,952[1] | 7th lowest |
| Five-year appreciation | 92%[2] | highest |
| Household income | $67,337[3] | 206th highest |
| Affordability ratio | 2.4 | 4th most affordable |
| Five-year population growth | 1.3%[4] | 72nd highest |
| Unemployment rate | 3.2%[5] | 5th lowest |
| Property taxes | $1,863[6] | 14th lowest |
| Educational attainment | 17%[7] | 184th highest |
The 56081 zip code in Saint James features a typical property value of $160,952, the 7th lowest in the state.
Property values have appreciated 92% over the past five years, the highest increase among evaluated markets in the state. Saint James homes have an affordability ratio of 2.4, the 4th most affordable in the state.
3. Austin
The 55912 zip code in Austin comes in at No. 3 in our ranking of the best residential real estate investment markets in Minnesota.
🔎 Key data about Austin (55912)
| Data point | Value | Rank in state (of 3,836 markets) |
|---|---|---|
| InvestScore | 96.2 | 3rd highest |
| Typical property value | $181,411[1] | 12th lowest |
| Five-year appreciation | 42%[2] | 12th highest |
| Household income | $70,177[3] | 196th highest |
| Affordability ratio | 2.6 | 10th most affordable |
| Five-year population growth | 0.7%[4] | 97th highest |
| Unemployment rate | 3.2%[5] | 5th lowest |
| Property taxes | $1,737[6] | 8th lowest |
| Educational attainment | 24%[7] | 156th highest |
With a typical property value of $181,411, Austin's 55912 zip code features the 12th lowest property values in the state.
Austin homes have an affordability ratio of 2.6, the 10th most affordable among the markets we evaluated.
4. Duluth
The 55807 zip code in Duluth ranks No. 4 among Minnesota's residential real estate investment markets.
🔎 Key data about Duluth (55807)
| Data point | Value | Rank in state (of 3,836 markets) |
|---|---|---|
| InvestScore | 92.1 | 4th highest |
| Typical property value | $198,627[1] | 19th lowest |
| Five-year appreciation | 41%[2] | 14th highest |
| Household income | $62,067[3] | 14th highest |
| Affordability ratio | 3.2 | 44th most affordable |
| Five-year population growth | 2%[4] | 49th highest |
| Unemployment rate | 4.9%[5] | 9th lowest |
| Property taxes | $2,076[6] | 30th lowest |
| Educational attainment | 31%[7] | 121st highest |
Property values in Duluth's 55807 zip code have seen the 14th highest increase among evaluated markets in the state, with an appreciation of 41% over the past five years.
Duluth's affordability ratio of 3.2 makes it the 44th most affordable among the 3,836 markets we evaluated.
5. Wadena
The 56482 zip code in Wadena rounds out our top five residential real estate investment markets in Minnesota.
🔎 Key data about Wadena (56482)
| Data point | Value | Rank in state (of 3,836 markets) |
|---|---|---|
| InvestScore | 91.8 | 5th highest |
| Typical property value | $203,888[1] | 22nd lowest |
| Five-year appreciation | 41%[2] | 15th highest |
| Household income | $64,439[3] | 15th highest |
| Affordability ratio | 3.2 | 37th most affordable |
| Five-year population growth | 1.7%[4] | 60th highest |
| Unemployment rate | 3.2%[5] | 5th lowest |
| Property taxes | $1,683[6] | 6th lowest |
| Educational attainment | 18%[7] | 181st highest |
Property values in Wadena's 56482 zip code rose 41% over the last five years, ranking the city 15th highest among evaluated markets in Minnesota.
Wadena homes have an affordability ratio of 3.2, the 37th most affordable among the markets we evaluated.
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Frequently asked questions
See our article Steps to Buying Your First Rental Property to learn the basics of real estate investing for beginners.
You'll learn the importance of setting goals, picking the right market, and more.
Cash investors often use what's called the 70% rule, which suggests they should pay around 70% of a house's after-repair value minus the cost of renovations.
By buying for about 70% of the after-repair value, they're positioning themselves to pay for repairs and other costs, and to lock in a profit.
The 70% rule isn’t a hard-and-fast formula, but a quick guideline investors use to evaluate potential deals.
Investing in residential real estate can be one of the best passive real estate investments in Minnesota.
Residential real estate offers accessible passive income and the potential to compound your original investment.
Renting out residential units is the top way to invest in real estate. House hacking also offers a great opportunity for passive real estate investment income.
How we rank residential real estate markets in Minnesota
To determine the best real estate investments in Minnesota we evaluated 3,836 markets on eight metrics, and then assigned an InvestScore based on a proprietary weighting framework. Each market corresponds to a specific zip code in Minnesota.
What is InvestScore?
InvestScore is a score on a scale of 0 (worst in state) to 100 (best in state) that estimates the residential real estate investment potential of a given market. It takes into account a suite of key data points for each city.
- Typical property value: This measures the typical home value in this zip code, according to the Zillow Home Value Index. It reflects the typical value for homes in the 35th to 65th percentile range, including all homes, with the numbers smoothed and seasonally adjusted. We prefer lower property values, which indicate both more room for growth and a greater ease of purchase.
- Property value appreciation: This measures how much property values have increased in the area over the past five years, according to the Zillow Home Value Index. We prefer a higher appreciation, as it indicates better returns on housing. However, past performance isn't indicative of future results.
- Median household income: This is the inflation-adjusted median household income in the zip code, according to U.S. Census American Community Survey data. We prefer a higher household income, as it indicates local residents have more income to spend on housing.
- Affordability ratio: This is the ratio of the typical home value to the median household income in the area. A lower ratio is better because it means more households can afford a home, which indicates higher demand.
- Population growth: This is how much the area's population has grown over the past five years, according to U.S. Census estimates. Higher is better, as it indicates residents are moving into the area at a rapid clip.
- Unemployment rate: This is the unemployment rate in the area, according to U.S. Census data. We prefer a lower rate, as it indicates the availability of steady employment in the area, meaning residents will find it much easier to afford homes.
- Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates.
- Educational attainment: This is the percentage of residents in the area that have obtained a bachelor's degree or better, according to U.S. Census estimates. We prefer a higher rate because it indicates local residents who have higher earning potential and thus should be able to afford homes.
