Why I'd Invest in the Midwest—Even If I Didn't Live Here

By: Skip Johnson

As a partner in a real estate fund, I see lots of investment opportunities; it's actually a bit wild.

Once you've allocated significant amounts of capital and have become a proven partner, the deals have a way of finding you. From development opportunities and value-add plays to overpriced stabilized properties pushed by zealous brokers. We get pitched daily. We see investment opportunities locally, regionally, and nationally. At this point, we've become incredibly picky.

Our role is to discern the right investment opportunities as we steward our investors' hard-earned dollars. Our team at Gratūs Funds spends much of its time diving into the numbers, vetting markets, and assessing the viability of various investment opportunities.

And, while it's true that I live in the Midwest, the data-driven investor in me would find this region compelling even if I resided on one of the coasts.

Here's why:

The Compelling Case for the Midwest

Diversified Economy

Being close to the action here in the Midwest, I've seen first-hand how diversified our economy is. We have everything from thriving healthcare sectors in Minnesota to burgeoning technology scenes and robust energy sectors in places like North Dakota. The sheer diversity of industries here offers a kind of economic resilience that's hard to ignore.

Steady Population Growth

We might not have the eye-popping growth numbers of some Sun Belt states, but what we lack in sizzle, we more than make up for in substance. The population in the Midwest grows steadily, and with that comes a constant and stable demand for housing.

Unbeatable Affordability

Living here, it's easy to forget how expensive the rest of the country can be. The cost of living in the Midwest is significantly lower than in most coastal cities. This affordability isn't just a boon for residents; it's a strong incentive for investors looking to enter the real estate market at a reasonable cost.

Lower Volatility

During the 2008 Great Recession, we noticed that while the Midwest was not entirely immune, it was far more resilient than many other regions. Rents returned to pre-recession levels relatively quickly, and property values saw less of a dip than in more volatile markets. This kind of stability is an investor's dream.

Balanced Regulatory Environment

The business-friendly atmosphere here is often overlooked, particularly in states like North Dakota and South Dakota. The regulations are crafted to be fair to both tenants and property owners, offering a more predictable investment landscape.

Personal Insights from the Twin Cities and Beyond

You've heard it said, "location, location, location." And that is so true. Real estate always has aspects that are hyper-local. Boots on the ground can take us beyond the broad swath of potential in the Midwest and help us identify the sub-markets and specific locations where the numbers tell a compelling story. In these areas, we've seen low vacancy rates, higher rent-to-cost ratios, and strong cash flows. If you're an investor who appreciates the fine details, the Midwest offers an array of markets where those details work in your favor.

Why You Should Consider Diversifying into the Midwest

So, even if I didn't call the Midwest home, the investor in me would be incredibly intrigued by the opportunities here. As someone deeply entrenched in this market, I can say the Midwest is a must-consider for any diversified portfolio. It offers a blend of stability, affordability, and growth potential that's tough to find elsewhere.

If you're interested in learning more about the Midwest's exciting opportunities, please feel free to reach out. We at Gratūs Funds are committed to finding and capitalizing on the best investment opportunities in these fundamentally strong yet often overlooked markets.

Note: Please conduct your own due diligence and consult with financial advisors before making any investment decisions. The data provided is for illustrative purposes and should be independently verified.

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