6 Tips: Setting Up Your Minneapolis-St Paul Condo & Loft Investments
1. Buying a condo? Be Sure the HOA Allows Rentals.
Most Twin Cities homeowners’ associations limit the number of rental condos. Most require that a certain ratio be owner-occupied. Often, this is to qualify for FHA pre-approval as well as to satisfy the board and current owners. Speak with the property manager to learn the rules and the current situation.
2. Buy Low—or Transfer a Current Lease Agreement.
With money up front, you can obtain a low-priced unoccupied condo or fixer-upper.
The alternative is to obtain condo or loft that already has a tenant lease, and transferring the agreement at closing.
3. Get the Closing Month’s Rent Transferred to You.
If a lease is already in place, confirm the rent. Say a condo’s rent is listed at $1,200 a month. Request bank statements to be sure that’s the actual income. Factor in the HOA fee for a condo property. For the closing month, the seller should pay a pro-rated “credit” which you’ll see on your closing statement. This way, you will receive any paid rent covering the period from the date of the property transfer. Security deposits should be remitted to you. Ultimately, you will be the one to return the deposit to the tenant.
4. Charge Rent at Market Rate for Comparable Units.
If the owner hasn’t raised the rent in some time, you can—when the current lease expires.
How much is fair-market rent in the Twin Cities? Rent Jungle gives you the breakdown by unit type and location.
5. Study Minnesota’s Landlord & Tenant Rights.
Additionally, learn the specific St Paul or Minneapolis requirements to license your rental property, and get a copy of the HOA’s rental regulations if applicable. Considering Airbnb? Contact the city for guidelines. For example, St. Paul rental hosts must pay one $40 annual licensing fee per rental unit, and caps the total number of visitors allowed at a time.
6. Build Your Investment Portfolio.
Given the fabulous revitalization investments made by the Twin Cities, many areas of St Paul and Minneapolis are rising in value. This is how a good real estate investment can be the first of a successful portfolio.
Thinking of a Condo or Loft Investment in the Twin Cities?
I look forward to hearing from you, and guiding you to a satisfying transaction.
Shannon Lindstrom, REALTOR®, AHWD, GREEN
748 Grand Avenue
St. Paul, MN 55105