If you think real estate is a bad investment, consider this.
The median price for a duplex, triplex, or fourplex in the seven-county metro area in 2012 was $138,350. That means half of the properties sold that year went for more than that, half went for less.
In 2021, just under 10 years later, the median sales price for a small multi-family property in the Twin Cities shot up to $375,000.
That’s an increase of 275%!
If you’ve owned a duplex, triplex, or fourplex in the Twin Cities area for any length of time, that’s great news when it comes to your financial health.
But here’s something of us many of us forget; when property values go up, we need to call our insurance agent and increase our coverage to match.
Think, for a moment, if something catastrophic happened to your duplex. In the last four months, lumber prices alone have nearly tripled. It’s estimated that increase alone adds $18,600 to the cost of building a new single-family home, and $7300 to a new multi-family (in this case, think townhouse or condo) property. Since August, the cost of framing lumber alone has topped $1000 per board foot according to Random Lengths. This represents a 167% increase since August.
If you’d like to know what your duplex, triplex, or fourplex is worth, give me a call. I’d be happy to provide you with comps and an opinion value. Then you can call your insurance agent and make sure you’ve got the right amount of coverage.