Your Roadmap to Real Estate Success in
Des Moines, IA

Author:
Rentastic Media
Aug 15, 2023
Des Moines, Iowa

Why Invest in
Des Moines?

Des Moines, Iowa, offers an increasingly attractive landscape for real estate investors seeking strong returns, diverse opportunities, and a favorable business environment. Known for its solid economic foundation, affordable living, and growing population, Des Moines provides a range of possibilities for both residential and commercial investments. With its blend of urban charm, low cost of living, and robust job market, the city’s real estate market is gaining momentum, positioning it as a top choice for savvy investors.

Promising Investment Opportunities in Des Moines Real Estate

Overall

Median Home Price

$800,000

Projected annual sales

$8,057

-18.42%
from last year

Borrowing coastal

7%

Des Moines’ real estate market is primed for impressive growth, supported by ongoing economic advancements and the city's reputation as a thriving center for business and culture. With a strong rental market, a range of affordable investment opportunities, and continued urban revitalization, Des Moines stands out as a promising destination for real estate investors. Here’s a closer look at the trends shaping the future of Des Moines' real estate market:
Regional
Downtown Des Moines
East Village
Ingersoll Park
West Des Moines
Median Sold Price
$220,000
Price MTM Change
+1.2%
Price YTY Change
+5.1%
Median Sold Price
$180,000
Price MTM Change
+1.5%
Price YTY Change
+6.3%
Median Sold Price
$235,000
Price MTM Change
+1.0%
Price YTY Change
+4.2%
Median Sold Price
$300,000

The California Market Is Volatile But Is Still Attractive

In conclusion, while the California housing market presents challenges, it also offers potential opportunities for investors who approach it with careful consideration and strategic planning. Despite the current hurdles, such as declining sales and limited housing supply, the strong demand and market competition indicate resilience and potential for growth. By staying informed, conducting thorough research, and seeking guidance from professionals, investors can navigate the market dynamics and position themselves for success. With its diverse regions and evolving market conditions, California continues to be an attractive destination for real estate investment. By adapting to the changing landscape and taking a long-term perspective, investors can find promising prospects and contribute to the vibrant housing market in the Golden State.

Forecast and Analysis of Des Moines Real Estate Market

Des Moines' real estate market continues to show strong growth, driven by population increases, economic expansion, and new developments. Below is an in-depth look at the key trends influencing the market:

Development in Emerging Neighborhoods

Emerging neighborhoods like the Ingersoll Avenue district and Meredith Drive area are witnessing revitalization and development projects. The growth in these neighborhoods is expected to drive up property values and attract both residential and commercial investments. Investors in these areas can expect substantial returns as new restaurants, retail, and housing developments enhance the appeal of these locales.

Suburban Growth

The suburban markets surrounding Des Moines are seeing a surge in demand as people flock to quieter areas while still being within easy reach of the city center. Suburbs like West Des Moines, Urbandale, and Ankeny are expected to continue their growth, with increased housing construction and a rising population. Suburban real estate offers a lucrative opportunity for investors, especially for single-family homes and townhomes targeting families.

Rental Market Performance

The rental market in Des Moines is thriving, driven by demand from young professionals, university students, and healthcare workers. Rental properties—particularly multi-family homes and apartments—see strong demand and can offer a competitive cap rate of 6%-8%. Areas like the East Village and Downtown Des Moines are seeing increasing interest from renters due to proximity to employment hubs and cultural amenities.

Commercial Real Estate Potential

Des Moines' downtown core has been undergoing significant transformation, with commercial real estate seeing positive growth. As the city diversifies its economy, there is growing demand for office space, retail, and mixed-use developments. With many major companies in the insurance and financial services sectors headquartered in Des Moines, the commercial real estate market is projected to expand, particularly in the tech, healthcare, and corporate sectors.

Market Wrap-Up in Los Angeles :

  • The Los Angeles housing market has experienced mixed trends, with some regions showing price increases while others have seen decreases.
  • Home sales have declined across most regions, indicating a slowdown in the market.
  • The Central Coast region experienced a decrease in median sold price and sales, while the Central Valley saw a slight increase in prices and a decrease in sales.
  • Far North region witnessed an increase in median sold price, but a decline in sales.
  • The San Francisco Bay Area reported a slight increase in prices and sales.
  • Southern Los Angeles saw a moderate increase in prices but a decline in sales.
  • The California Association of Realtors (C.A.R.) revised its housing market forecast, projecting a decline in home sales and median prices compared to the previous year.
  • Factors contributing to the market conditions include mortgage rates, inventory levels, buyer demand, and economic conditions.
  • The forecast indicates a challenging market environment, but there are positive signs of stability and potential growth in certain areas.
  • It is important for potential investors to carefully analyze market trends, consider regional variations, and seek guidance from real estate professionals before making investment decisions.
Mortgage calculator creative image

Strategies for Conquering the Des Moines
Real Estate Market

Successfully navigating Des Moines real estate market requires strategic planning and market insights. Here are effective strategies to maximize your investment returns:

Look Into Land Development and Urban Sprawl

As Des Moines continues to grow, land development opportunities are becoming increasingly valuable. Suburban sprawl is driving the need for new residential and commercial developments. Raw land investments in expanding areas, especially near major highways and new infrastructure projects, can be lucrative. Whether for single-family homes, townhomes, or larger commercial projects, buying land now can offer substantial returns as the city expands outward. Look for areas that are close to transportation corridors or where major employers are planning to expand.
magnifying glass on a chart and laptop
A man pointing to a graph chart

Consider Real Estate Syndications or REITs

For investors looking to diversify their portfolio without directly owning properties, real estate syndications or Real Estate Investment Trusts (REITs) are an attractive option. These investment vehicles allow individuals to pool capital to invest in large-scale commercial or residential properties, such as multi-family units, office buildings, or industrial parks. This allows investors to benefit from real estate market growth without taking on the risks or responsibilities of direct ownership.

Build Relationships with Local Developers and Builders

Networking and establishing relationships with local developers, builders, and real estate agents can provide early access to off-market properties, development opportunities, and insider knowledge about upcoming trends in Des Moines. By fostering these relationships, investors can secure better deals, gain insights into market shifts, and potentially access new developments or properties before they hit the public market.
couple talking to a consultant
Woman in front of board of sticky notes planning

Target Properties Near New or Expanding Infrastructure Projects

Des Moines is continually improving its infrastructure, with new highways, public transportation routes, and utilities being built or upgraded. Properties near upcoming or ongoing infrastructure projects can see significant appreciation in value. Investors should monitor construction projects that could increase accessibility or connectivity to key areas of the city, ensuring they target properties with future growth potential

Invest in Properties with High Potential for Value-Add Improvements

Look for properties that have value-add potential—properties that may be underperforming or outdated but have the potential to increase in value through strategic renovations or upgrades. This could include cosmetic updates, structural repairs, or improving the overall functionality of the property. By investing in these types of properties, investors can significantly increase their return on investment through renovations and enhancements.
cashbag next to mini house next to coin bank
Man in suit playing jenga with house on top

Invest in Eco-Friendly and Sustainable Properties

Sustainability is becoming a key consideration for both homeowners and renters. Investing in eco-friendly, sustainable properties can attract tenants or buyers who prioritize green living. Properties with energy-efficient features, such as solar panels, energy-efficient appliances, and green building certifications, can appeal to the growing market of environmentally-conscious consumers. Des Moines is becoming more progressive in terms of sustainability, so eco-friendly developments can set you apart in the marketplace and command higher rents or sale prices.

Invest in Affordable Housing

As housing prices rise, there is a growing demand for affordable housing in Des Moines, especially in suburban areas. Many individuals and families are searching for more budget-friendly options, making this an ideal market segment for investors. Focusing on properties that can be renovated or built as affordable units can be a profitable venture, especially if they are located near schools, transportation, and shopping centers. Additionally, affordable housing often comes with potential government incentives, such as low-income housing tax credits, which can improve returns.
Coins stacking in an upward trend shape next to mini house

Other Investment Opportunities in Iowa

When it comes to real estate investment opportunities in Iowa, Des Moines is not the only city worth considering. Here are a few reasons why you might want to explore investment in Ankeny, Davenport, or Sioux City:

Ankeny

Ankeny, Iowa, is one of the fastest-growing suburbs in the Midwest, presenting real estate investors with a unique opportunity to capitalize on a robust market characterized by strong economic growth, family-friendly amenities, and increasing housing demand. Strategically located between Des Moines and Ames, Ankeny attracts both young professionals and families, driving up the demand for residential and multi-family housing. With a high quality of life, low crime rates, and excellent schools, Ankeny is an ideal place for long-term real estate investment.

Davenport

Davenport, Iowa, is an evolving city that offers real estate investors opportunities in both residential and commercial markets. As one of the Quad Cities, Davenport has seen a resurgence in growth, bolstered by a dynamic local economy, revitalized urban spaces, and a well-positioned location along the Mississippi River. With its relatively low cost of living, a strong job market, and growing infrastructure, Davenport provides great potential for savvy investors looking for steady growth and income.

Sioux City

Sioux City, Iowa, often referred to as the "Gateway to the West," is rapidly growing as an attractive market for real estate investors. With a strong local economy, a central location in the Midwest, and affordable housing prices compared to larger urban centers, Sioux City offers a unique set of opportunities for both new and seasoned investors. As the city expands, its combination of industrial growth, diversified economic base, and relatively low cost of living positions it as a prime area for residential and commercial property investments.

Rentastic Verdict

Cedar Rapids presents a dynamic and diverse real estate market that is ideal for investors seeking stable returns in both residential and commercial sectors. The combination of a revitalizing urban core, a growing tech and healthcare industry, and a steady stream of new residents makes Cedar Rapids a promising market for real estate investment. With affordable property prices compared to larger cities and a focus on sustainable development, investors can find significant opportunities for long-term growth, especially in areas undergoing revitalization like NewBo City Market and Czech Village.
In addition to the economic growth and development, Cedar Rapids offers a favorable environment for both seasoned and new investors, with government incentives, tax programs, and incentives that help reduce upfront costs. Whether it's focusing on multi-family housing, short-term rental properties, or green investments, Cedar Rapids provides a wealth of opportunities for diversified portfolios. With a population that continues to grow and evolve, investing in Cedar Rapids offers not only financial returns but the chance to contribute to the continued transformation of this vibrant city.
‍
Ultimately, Cedar Rapids is well-positioned for future real estate growth, providing a strong foundation for both short-term and long-term investments. By staying informed about local trends and leveraging the city’s ongoing revitalization efforts, investors can maximize their returns while being a part of Cedar Rapids’ exciting economic and cultural renaissance.

Empowering Investors in the Iowa Real Estate Market

Rentastic provides a comprehensive suite of tools designed to empower investors in navigating the dynamic Iowa real estate market. These tools offer unique functionalities that cater to the specific needs of investors, enabling them to make informed decisions and maximize their investment potential.

Rent Estimator

The Rent Estimator tool equips investors with valuable insights into the rental market. By analyzing market data and property-specific factors, it accurately estimates the potential rental income of a property. This tool enables investors to set competitive rental rates, project cash flows, and evaluate the profitability of their investments.
Learn More
Rentastic Rent Estimator
Deal Analyzer preview

Deal Analyzer

With the Deal Analyzer tool, investors can perform comprehensive financial analyses of potential real estate deals in Iowa. By inputting essential financial information such as purchase price, rental income, expenses, and financing details, investors gain a deeper understanding of the investment's profitability. This tool assists in identifying lucrative opportunities and mitigating risks by providing reliable calculations and insights.
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Mortgage Calculator

Rentastic’s Mortgage Calculator offers investors the ability to estimate monthly mortgage payments based on loan parameters, interest rates, and loan terms. This tool helps investors evaluate different financing options, determine affordability, and understand the impact of financing on their investment’s cash flow. By making informed decisions about mortgage options, investors can optimize their financial strategies.
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Expense Tracking

Successful real estate investing requires efficient expense management, and Rentastic’s Expense Tracking tool simplifies this process. It allows investors to track and monitor property-related expenses, such as maintenance, repairs, insurance, and property management fees. By maintaining accurate records and gaining visibility into their expenses, investors can effectively budget, analyze profitability, and make informed financial decisions.
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Rentastic's suite of tools combines data-driven insights and user-friendly interfaces to empower investors in the Iowa real estate market. These tools provide a competitive edge by enabling investors to accurately estimate rental income, analyze deal profitability, evaluate financing options, and manage expenses. By leveraging Rentastic's tools, investors can confidently navigate the Iowa market, identify lucrative investment opportunities, and optimize their returns.
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Glossary

  1. Appreciation
  2. Amortization
  3. Cap Rate
  4. Cash-on-Cash Return
  5. Cash Flow per Unit (CFPU)
  6. Closing Costs
  7. Debt Coverage Service Ratio
  8. Fixed-Rate Mortgage
  9. Loan-to-Value (LTV) Ratio
  10. Net Operating Income (NOI)
  11. Mortgage Loan
  12. Profit and Loss (P&L) Statement
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