Bemidji, MN Cap Rate 4.44%
Bemidji is a mid-range market in the Midwest with a small but investable metro of 50,000. At a 4.44% estimated cap rate, this is a moderate market where rents of $1,420/mo lag behind home prices. With a median home price of $255,000 and population is roughly stable, Bemidji offers opportunities for investors who source deals carefully.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Market Data
2026 Market Update: Bemidji
Bemidji's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $255,000, the $1,420/mo rent produces only $944/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
At current rates, a 20% down conventional loan ($51K at 7%) would result in approximately $-413/mo cash flow — negative at median prices. Larger down payments, seller financing, or buying 15–25% below median are strategies to turn the numbers positive.
The 15.0x gross rent multiplier and 4.8% vacancy rate position Bemidji as a balanced market. With annual appreciation at 2.6%, total returns (cash flow + equity growth) run approximately 7.0% before financing leverage.
Deal Modeling & Scenarios for Bemidji
All figures below are computed from Bemidji's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 1.12% effective rate on the $255,000 median price, the annual tax bill is $2,856 — that's near national average (+6% vs the national average of ~1.06%). Verify the actual assessed value before purchase; sale-triggered reassessments can push the bill higher than the seller's current statement.
5-Year Cap Rate Trajectory
If Bemidji continues appreciating at 2.6%/yr while rents grow at a conservative 3%/yr, cap rate holds roughly steady as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $255K | $1,420 | 4.4% |
| Year 1 | $262K | $1,463 | 4.5% |
| Year 2 | $268K | $1,506 | 4.5% |
| Year 3 | $275K | $1,552 | 4.5% |
| Year 4 | $283K | $1,598 | 4.5% |
| Year 5 | $290K | $1,646 | 4.5% |
Three Financing Scenarios
Same median-priced Bemidji property — different capital structures. All-cash maximizes cap rate. Leverage trades cash flow for higher cash-on-cash return when the spread between cap rate and borrowing cost is positive.
| Scenario | Cash Invested | Monthly Cash Flow | Annual CF | Cash-on-Cash |
|---|---|---|---|---|
| All cash | $255K | $944 | $11,326 | 4.4% |
| 20% down conventional @ 7% | $59K | $-413 | $-4,953 | -8.4% |
| 25% down DSCR @ 8.5% | $74K | $-527 | $-6,322 | -8.5% |
Three Price Tiers: Below, At, and Above the Median
Properties don't always trade at the median. Lower-priced units typically offer higher cap rates but harder operations; higher-priced properties tend to compress cap rates while attracting better tenants. All-cash assumptions below:
| Tier | Price | Rent/Mo | NOI/Yr | Cap Rate | Monthly CF |
|---|---|---|---|---|---|
| Below median (~75% price) | $191K | $1,207 | $8,564 | 4.5% | $714 |
| At median | $255K | $1,420 | $9,620 | 3.8% | $802 |
| Above median (~125% price) | $319K | $1,633 | $10,675 | 3.3% | $890 |
Total Return Over a 5-Year Hold
Cap rate is just one piece. Real estate returns come from four sources: cash flow, appreciation, principal paydown, and tax benefits. Assuming 20% down conventional financing at 7% and a 5-year hold at Bemidji's historical appreciation rate of 2.6%:
On a $51K down payment, that's a 49.9% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Bemidji
Automated checks against the underlying data — surface only the risks that actually apply to Bemidji, not generic boilerplate:
Cap Rate Calculator — Bemidji
Pre-filled with Bemidji medians. Adjust to match a specific property.
Cash-on-Cash Return — Bemidji
Factor in financing to see your actual return on invested capital in Bemidji.
Is Bemidji a Good Place to Invest in Rental Property?
Bemidji, MN has a population of 50,000 and has been growing at 0.5% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $255,000 paired with median rents of $1,420/mo produces an estimated cap rate of 4.44%.
Property taxes at 1.12% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 4.8% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.
At a price-to-income ratio of 4.2x, homes cost about 4.2 times the local median income of $60,800. This relatively affordable ratio suggests a deep pool of renters who find buying out of reach, supporting rental demand. Home values have appreciated at roughly 2.6% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Bemidji presents moderate opportunities. Cap rates near 4.44% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.