Duluth is a mid-range market in the Midwest with a smaller market with 92,000 residents. At a 5.78% estimated cap rate, this is a solid market where rents of $1,680/mo lag behind home prices. With a median home price of $250,000 and population is roughly stable, Duluth stands out as a market worth serious analysis for rental investors.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Duluth's 0.7% rent-to-price ratio is well below the 1% rule. At median prices of $250,000, the $1,680/mo rent produces only $1,204/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 ($50K at 7%) would result in approximately $-126/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 12.4x gross rent multiplier and 5% vacancy rate position Duluth as a value-oriented market. With annual appreciation at 2.3%, total returns (cash flow + equity growth) run approximately 8.1% before financing leverage.
Pre-filled with Duluth medians. Adjust to match a specific property.
Factor in financing to see your actual return on invested capital in Duluth.
Duluth, MN has a population of 92,000 and has been growing at 0.2% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $250,000 paired with median rents of $1,680/mo produces an estimated cap rate of 5.78%.
Property taxes at 1.08% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 5.1x, homes cost about 5.1 times the local median income of $48,600. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 2.3% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Duluth presents moderate opportunities. Cap rates near 5.78% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.