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Cap Rate Analysis: Duluth, MN

Investment metrics, interactive calculators, and data-driven analysis for Duluth rental properties.

Challenging for pure cash flow
Based on $225,000 median price and $1,100/mo median rent
Est. Cap Rate
3.69%
1% Rule
0.49%
Fails
GRM
17.0x
Price / Income
4.6x

Market Data

Median Home Price$225,000
Median Monthly Rent$1,100
Property Tax Rate1.08%
Population92,000
Population Growth0.2% / yr
Median Household Income$48,600
Vacancy Rate5%
Annual Appreciation2.3%

Cap Rate Calculator — Duluth

Pre-filled with Duluth medians. Adjust to match a specific property.

Property Details
$
$
3–8% typical
%
Monthly Expenses
1.08% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.03%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$6,828
net operating income
Gross Rent Multiplier
17.0x
High (>15)
1% Rule
0.49%
✗ Fails
Monthly Cash Flow
$569
before debt service
Annual Breakdown
Gross Rental Income$13,200
Less Vacancy−$660
Effective Income$12,540
Less Operating Expenses−$5,712
Net Operating Income$6,828

Cash-on-Cash Return — Duluth

Factor in financing to see your actual return on invested capital in Duluth.

$
$56,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-8.80%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$63,000
$56,250 down + $6,750 closing
Monthly Mortgage
$1,100
on $169K loan
Monthly Cash Flow
$-462
after all expenses
Annual Cash Flow
$-5,545
before taxes
Cash Flow Breakdown
Monthly Rent$1,100
Less Expenses−$462
Less Mortgage−$1,100
Monthly Cash Flow$-462

Is Duluth a Good Place to Invest in Rental Property?

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 $225,000 paired with median rents of $1,100/mo produces an estimated cap rate of 3.69%.

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 4.6x, homes cost about 4.6 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: At current median prices, Duluth is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.

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