Redwood County

Redwood County scores 94 on appreciation and 0 on cash flow, which tells you almost everything you need to know about how this market is priced right now. At a median home price of $188,530 and 7.52% year-over-year price growth, values are moving fast for a rural Minnesota county with a population of 15,428. The appreciation score of 94 out of 100 is the headline, but the zeroed-out cash flow and cap rate fields are equally instructive: at current prices and a 6.85% financing rate, the numbers don't pencil for a buy-and-hold investor expecting meaningful monthly income. This is a market sitting firmly on the appreciation end of the spectrum, not a cash-flow play.

Given that profile, Redwood suits an appreciation buyer or a long-term hold investor who can tolerate flat or slightly negative monthly cash flow in exchange for price gains running north of 7.5% annually. It does not suit a cash-flow buyer. An investor who needs a specific monthly net income to cover debt service and reserves should look elsewhere, because the combination of a $188,530 purchase price, a 6.85% interest rate on the remaining $150,824 after a 20% down payment, and typical rural operating costs does not produce a cushion. The affordability index of 90 and the affordability score of 90 suggest the local population can still access homeownership, which historically compresses the rental pool and puts a ceiling on how high rents can rise relative to prices, further pressuring cash flow. A value-add operator who can manufacture equity through renovation and refinance into better terms has more of a case here than a straight-buy landlord.

The economic context is not provided in the data, so employer-level demand drivers can't be assessed here. What the population figure of 15,428 does communicate is that this is a small, concentrated market. Tenant demand is thin by definition, and a handful of employer layoffs or demographic outflows could shift vacancy meaningfully. The stability score of 50 out of 100 reflects that fragility. High appreciation in a small-population county can reflect a compressed supply of listings rather than surging demand, and those two dynamics have very different long-term implications for a landlord's ability to find and retain tenants.

On the carry-cost side, property taxes and insurance add $233 per month to your underwrite at a combined state-average effective tax rate of 1.13% and an insurance rate of 0.35%. Minnesota's 1.13% state-average rate falls in the normal range, so it doesn't warrant a red flag on its own, but it's not a tailwind either. The caveat matters: that 1.13% is a state-average estimate from Tax Foundation 2024, and actual county and township rates in Redwood can differ, sometimes materially. Before closing, get the actual mill rate applied to comparable parcels in the specific township you're underwriting, not the state average. At $188,530, the $2,130 annual tax estimate is already baked into that $233 monthly figure alongside $660 in estimated insurance, both of which need to be stress-tested against local actuals.

The concentration risk here is real and data-supported. A county of 15,428 people in rural southwest Minnesota has limited economic diversification by geography alone. The stability score of 50 confirms this is not a market insulated from shocks. Regulatory risk for landlords is not flagged in the data, but small rural markets often have thin property management infrastructure, which means self-management or accepting a management fee that takes a larger percentage bite out of already-thin returns. Demographic risk is implicit in the population size: any sustained outmigration, which is a common pattern in rural Minnesota counties, could erode both rents and the resale market simultaneously.

Against its neighbors, Redwood holds the highest overall score at 79, compared to Watonwan at 78, Martin at 76, Renville and Pipestone both at 75, and Rock at 74. Its median price of $188,530 sits in the middle of the peer group: cheaper than Martin ($209,481) and substantially cheaper than Rock ($260,804), but slightly more expensive than Renville ($187,350) and Watonwan ($171,215). Pipestone is nearly identical at $189,757 with a score of 75, making Redwood the better-scoring option at nearly the same price point. The case for choosing Redwood over a neighbor comes down to that appreciation score of 94 and the national ranking of 13th out of 1,000 counties at the 98th percentile. If your thesis is capital appreciation in rural Minnesota and you're comparing counties at similar price points, Redwood's score advantage is meaningful. If your thesis is cash flow, Watonwan at $171,215 is worth modeling first, even though its overall score is one point lower.