Real Estate Investing in Watertown, Minnesota (55388)
Everything the listing leaves out — vacancy, rent trend, cap rate, landlord climate. All free.
Should you buy in 55388 (Watertown, MN)? Our answer, based on the numbers below.
Mixed signals — some positives, some negatives. Worth considering but not a slam-dunk.
A middle-of-the-road market. Workable, but the best opportunities may be nearby ZIPs rather than this one.
No major risk flags on the data we track.
• Modeled rent — no observed market rent for this ZIP; the figure is estimated from HUD fair-market rent.
What’s happening in Watertown, MN (55388)?
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Market Analysis: 55388 Watertown
ZIP 55388 in Watertown, MN carries a solid set of headwinds. Home values near $389K and rents of $1,368/mo sit inside a market where underwriting has to be tight.
Distressed does not mean uninvestable. It means the margin for error is thinner. ZIP 55388 rewards the prepared, punishes the overconfident, and leaves the math unchanged either way.
The gap between 55388 and stronger Watertown ZIPs is not closing quickly. Investors should weight long-horizon assumptions accordingly.
The demographic picture in 55388 includes headwinds that any investor should price in. Income distribution skews lower than Watertown averages, and tenant stability requires active management.
The 55388 ZIP fits a narrow investor profile — hands-on, patient, and willing to accept that the cap rate on paper is not the cap rate in reality.
Here's what matters if you're considering buying a home in Watertown:
Property Strategy for 55388
Which property type performs best in this market?
📊 Compare All Property Types →
| Type | Median Value | Est. Rent | Cap Rate | 5yr CAGR | $/Bedroom |
|---|---|---|---|---|---|
| 2BR | $290,314 | $1,520 | 3.8% | +3.5% | $145,157 |
| 3BR | $356,603 | $2,020 | 4.1% | +4.4% | $118,868 |
| 4BR | $407,829 | $2,270 | 4.0% | +4.7% | $101,957 |
| 5BR | $467,110 | — | — | +4.8% | $93,422 |
Market Trends
Home Value History (with trend line)
📊 How Does 55388 Compare?
| Metric | 55388 | Watertown | Minnesota |
|---|---|---|---|
| Home Value | $388,700 | $388,700 | $340,597 |
| 5-Year CAGR | 2.7% | 2.7% | 4.9% |
| Avg Rent | $1,368 | $1,368 | - |
| Cap Rate | 2.8% | 2.8% | - |
Similar ZIPs Within 25 Miles
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Landlord Ground Truth
Real numbers from people who own or manage rentals in ZIP 55388 (Watertown, MN). Anonymous, moderated, never written by AI.
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📊 Market Snapshot
| Home Value | $388,700 |
| Monthly Rent | $1,368 |
| Price-to-Rent | 23.7:1 |
| 1% Rule | ✗ Fails |
💰 Return Metrics
| Gross Yield | 4.2% |
| Cap Rate | 2.8% |
| 5-Year IRR | 5.4% |
📈 Home Appreciation
| 1-Year | +4.1% ▲ |
| 3-Year CAGR | +1.8% ▲ |
| 5-Year CAGR | +2.7% ▲ |
| 10-Year CAGR | +4.9% ▲ |
🏠 Rent Trends
| 1-Year | N/A |
| 3-Year CAGR | N/A |
| 5-Year CAGR | N/A |
The current 30-yr mortgage rate (6.8%) exceeds the estimated cap rate (2.8%). Financing reduces your cash-on-cash return below the cap rate. Markets like this may still make sense as IRR plays — factoring in appreciation, depreciation, and a future refinance when rates drop.
Run an IRR Analysis →⚠️ Risk Signals
Composite view of factors that can impact a ZIP's stability and your downside risk.
Demographics in 55388
Population: 5,974
Crime & Safety
Crime & Safety Data Coming Soon
We're integrating comprehensive crime statistics including violent crime rates, property crime, and safety scores to help you make informed investment decisions.
Expected: Q1 2025
🎓 Schools in 55388
Schools in This ZIP Code
About Repit School Scores
Traditional school ratings rely heavily on standardized test scores, which often reflect family income more than school quality. Repit takes a different approach.
We evaluate schools based on factors that research shows actually impact educational outcomes:
- Class Size — Smaller classes mean more individual attention
- School Funding — Resources available for programs, staff, and facilities
- Community Factors — Neighborhood characteristics that influence student success
- School Environment — Size, type, and structure
Scores are updated annually using federal education data.
🎓 Nearby Colleges & Universities
Frequently Asked Questions
What type of investing works in Watertown, MN?
Watertown, MN investors pursuing careful cash-flow rentals with hands-on management. The underlying economics ($389K prices, $1,368/mo rents) make it a reasonable choice.
What is the median home value in Watertown, MN?
The median home value in Watertown, MN is roughly $389K. That puts it reasonable relative to the MN statewide average.
How does Watertown, MN rate as a rental market?
Yes - Watertown, MN a 3.0/5 investability score. With $389K home prices against $1,368/mo monthly rent, the market delivers a reasonable entry point for new investors.
Is Watertown, MN good for landlords?
Landlord-friendliness in Watertown, MN is balanced. Eviction timelines and lease enforcement are considered reasonable by most property managers.
How high is vacancy risk in Watertown, MN?
Occupancy in Watertown, MN runs measured with elevated vacancy. Well-priced units at $1,368/mo lease on reasonable timelines.
You know 55388 now. You don’t know where it ranks.
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How 55388 ranks in Minneapolis-St. Paul-Bloomington, MN-WI
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