Real Estate Investing in Cottonwood, Minnesota (56229)
Everything the listing leaves out — vacancy, rent trend, cap rate, landlord climate. All free.
Should you buy in 56229 (Cottonwood, MN)? Our answer, based on the numbers below.
Solid choice — values are growing steadily and the market is stable enough to buy with confidence.
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 Cottonwood, MN (56229)?
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Market Analysis: 56229 Cottonwood
This part of Lyon County is not an easy win. The 56229 ZIP comes in at softness in key indicators, and the playbook that works in cleaner markets often stalls here.
Rent of $873/mo on a $256K basis reads well until vacancy, delinquency, and capex enter the model. The honest cap rate in 56229 sits below the stated 0.0% once reality is priced in.
In the broader MN picture, 56229 is a reminder that not every low-priced ZIP is a value-add opportunity — some are simply distressed, and the difference matters.
Demographically, 56229 is a market where tenant selection matters more than unit finishes. Operators who understand that tend to do fine; those who do not tend to learn why the ZIP trades at a discount.
Strategically, 56229 can be a high-return sleeve of a diversified portfolio — but it should not be the whole portfolio, and it should not be someone's first deal.
Here's what matters if you're considering buying a home in Cottonwood:
Market Trends
Home Value History (with trend line)
📊 How Does 56229 Compare?
| Metric | 56229 | Cottonwood | Marshall, MN | Minnesota |
|---|---|---|---|---|
| Home Value | $256,415 | $256,415 | N/A | $340,597 |
| 5-Year CAGR | 6.4% | 6.4% | N/A | 4.9% |
| Avg Rent | $873 | $873 | N/A | - |
| Cap Rate | 2.7% | 2.7% | - | - |
Similar ZIPs Within 25 Miles
Compare other nearby markets to see if a neighbor offers a better fit.
Landlord Ground Truth
Real numbers from people who own or manage rentals in ZIP 56229 (Cottonwood, MN). Anonymous, moderated, never written by AI.
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📊 Market Snapshot
| Home Value | $256,415 |
| Monthly Rent | $873 |
| Price-to-Rent | 24.5:1 |
| 1% Rule | ✗ Fails |
💰 Return Metrics
| Gross Yield | 4.1% |
| Cap Rate | 2.7% |
| 5-Year IRR | 9.0% |
📈 Home Appreciation
| 1-Year | +10.2% ▲ |
| 3-Year CAGR | +5.2% ▲ |
| 5-Year CAGR | +6.4% ▲ |
| 10-Year CAGR | +4.2% ▲ |
🏠 Rent Trends
| 1-Year | N/A |
| 3-Year CAGR | N/A |
| 5-Year CAGR | N/A |
The current 30-yr mortgage rate (7.0%) exceeds the estimated cap rate (2.7%). 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 56229
Population: 1,729
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 56229
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
Investor Insight: With 563 students living off-campus nearby, this area has strong rental demand from the college population.
Frequently Asked Questions
What is the typical home price in Cottonwood, MN?
Median home price in Cottonwood, MN is near $256K, with a 5-year CAGR of 0.0%. Prices have been even-keeled and supportive of buy-and-hold strategies.
Can I live-in-and-rent in Cottonwood, MN?
Cottonwood, MN is a a challenging market for house hackers. FHA or conventional owner-occupant buyers find the $256K price point reasonable to enter.
What is the tenant pool like in Cottonwood, MN?
Working renters make up the core of the Cottonwood, MN tenant base. The pool is reasonable for investors targeting long-term holds.
Are rents high in Cottonwood, MN?
Average rent in Cottonwood, MN is approximately $873/mo per month. Against $256K home values that yields a reasonable rent-to-price ratio.
How strict are landlord regulations in Cottonwood, MN?
Cottonwood, MN falls under MN landlord-tenant law, which is balanced. That backdrop makes day-to-day property management reasonable.
You know 56229 now. You don’t know where it ranks.
This page stays free — all of it. What one page can’t tell you is how 56229 compares to every other market. Investor ($19/mo) screens every U.S. ZIP by cap rate, the 1% rule, vacancy and landlord climate, and exports your shortlist.
How 56229 ranks in Marshall, MN
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