Rental Property in North Dakota: What the Numbers Actually Look Like

North Dakota is the state in this dataset where the honest answer is most often "the data is thin, and here is exactly how thin."

That is not a hedge and it is not an excuse to skip the arithmetic. It is a finding that changes how you should underwrite. In a state where consumer-facing figures are noisy — where the statewide median sale price ranges from $290,642 to $335,000 depending on which source you pick, where the wind/hail deductible rests on one quote-database study with no statute or regulatory bulletin behind it, and where the housing finance agency's own income limits could not be confirmed from a live page — the right response is to run your model at both ends of every range and see whether the answer moves.

For North Dakota it does. Section 5 shows the price range alone is worth 0.57 percentage points of cap rate and $255 a month of cash flow — more than any single expense line in the analysis.

Two things are firm. The first is the insurance premium, which is the one figure here with tight agreement between independent sources. The second is that North Dakota has no FAIR Plan — no insurer of last resort of any kind. That one is confirmed from three directions, and it is the most consequential fact in the article.

A note before you start: this is general educational information about how rental property arithmetic works in North Dakota. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Talk to a North Dakota CPA about tax treatment, a licensed North Dakota agent about a real quote, and a North Dakota attorney about anything contractual — which you will need anyway, because North Dakota requires one.

1. What a rental costs to buy here

The statewide median sale price used here is $313,885 (Redfin, May 2026, up 3.2% year over year). Be aware of the spread behind it: Zillow's smoothed home-value index reads $290,642 and a Houzeo-cited figure reads $335,000 (+9.84% year over year). That is a 15% range, which is unusually wide for a statewide median, and it is a straightforward consequence of a small transaction market. Section 5 runs the deal at all three.

The two major counties:

• Cass County (Fargo): $325,000, effective property tax rate 1.16%, average insurance $2,330
• Burleigh County (Bismarck): $360,000, effective property tax rate 0.89%, average insurance $3,013

The cash you actually need

North Dakota is one of the cheapest states in the country to transact in, and the reason is that two of the usual line items simply do not exist:

• No transfer tax, deed tax, or conveyance tax. North Dakota is among the quarter of states that charge nothing to transfer title. County recorders charge flat fees — $20 for a deed up to six pages, $65 for longer ones, plus per-page add-ons — not a percentage of price.
• No mortgage recording tax, registry tax, or intangible tax. Recording a mortgage costs flat per-page fees regardless of loan size.

What North Dakota does require is an attorney. North Dakota Century Code section 26.1-20-05 requires a licensed attorney to examine and certify title on real estate transactions. The nuance matters: the attorney's role is limited to the title examination and opinion, and title companies typically conduct the closing itself. Budget for the title opinion; do not assume the attorney runs the whole closing.

Closing costs run 2% to 5% for a North Dakota buyer, with a Rocket Mortgage-sourced figure around 4.02%. This article uses a 3.5% midpoint.

On the $313,885 median at 25% down:

• Down payment: $313,885 x 0.25 = $78,471.25
• Loan amount: $235,413.75
• Closing costs: $313,885 x 3.5% = $10,985.98
• Total cash in: $89,457.23

On price growth: FHFA's most recent published state-level figure has North Dakota at +4.03% year over year, ranked 9th among states — genuinely strong, and the one clearly favorable number in this article.

2. The two expenses that decide whether it works

Property tax: moderate, with a county spread that matters

The Tax Foundation puts North Dakota's effective property tax rate on owner-occupied housing at 0.92%. Propertytaxrates.org reads 0.99%, taxbycounty.com 0.87%; sources cluster 0.87% to 0.99%. That is reasonably tight.

On the $313,885 example: $313,885 x 0.92% = $2,887.74 a year, or $240.65 a month.

For a landlord, North Dakota's relief programs are all out of reach, and the situation is worth stating precisely because the state's structure is unusual. North Dakota has no single broad homestead exemption. It has three separate credits: a Primary Residence Credit for owner-occupants generally, a Homestead Property Tax Credit for qualifying homeowners 65 and older or permanently disabled with limited income, and a Disabled Veteran's Property Tax Credit. All three require owner occupancy; none is available on a rental. Most require annual application by February 1.

One honest gap: the current dollar amounts of the Primary Residence Credit and the Homestead Property Tax Credit could not be confirmed from a live North Dakota Tax Commissioner page during this dataset's research. If you are converting your own home into a rental and want to know what credit you are giving up, confirm the current amount directly with the Office of State Tax Commissioner or your county assessor rather than taking a figure from any article.

Insurance: the firm number in a soft dataset

This is the one figure in the North Dakota file that two independent sources agree on. At $300,000 dwelling coverage with a $1,000 deductible, 2026:

• Insurance.com: $2,846
• Insurify: $2,676
• Recorded midpoint: $2,761

Six percent apart. For context, this site's South Dakota entry has the same two publishers 43% apart, so North Dakota's agreement is real signal rather than luck.

Corroboration at other coverage levels lines up: LendingTree reads $2,460 at $350,000, and Insurify's projection series reads $2,422 for 2025 at the state's own average dwelling limit. NerdWallet's $3,510 is the visible outlier, but it is quoted at $400,000 of dwelling coverage — a third more coverage — so it is not evidence against the $300,000 figure.

What was excluded, and why. Reads circulating in 2026 put North Dakota anywhere from about $1,300 to $2,400 a year, and those numbers are not used here because none of them states a coverage level. A premium without its dwelling tier is not a comparable number. If you find one of those figures elsewhere and it looks reassuringly cheap, that is the reason.

At $2,761, insurance is 13.2% of gross rent on the example below, $230.08 a month, and 0.96 times the property tax bill. In North Dakota, tax and insurance are essentially the same size, and neither one dominates.

Here is the identical $313,885 house at the identical rent and the identical 0.92% tax rate, with only the premium changing across the credible range:

The whole insurance disagreement is worth $170 a year and 0.06 points of cap rate — which is to say, nothing. Hold that comparison in mind when you reach Section 5, where the price spread turns out to be worth thirty times as much.

North Dakota's filed rate change was +4.7% from 2024 to 2025 (LendingTree, from S&P Global RateWatch), below the 6.0% national figure; cumulative 2020-2025 is +39.9% against a 46.8% national cumulative. Insurify's forward projection is flatter still, roughly +1%.

The wind/hail deductible, and the honest limit on this figure

North Dakota is landlocked and is not among the 19 states plus DC that use hurricane or named-storm deductibles. What it has instead is a percentage wind/hail deductible, and this is a real feature of the market rather than an edge case — North Dakota sits at the northern end of hail alley, the corridor running from eastern Wyoming through the Dakotas, and ranks among the top states nationally for hail frequency and severity. In 2024 alone hail caused over $15 million in North Dakota property damage, including a July storm dropping stones up to 4.5 inches.

North Dakota permits wind or hail deductibles of 1% to 5% of dwelling coverage. Insurify's quote database puts the average actually written at 1.53% — about $4,791 at their average North Dakota dwelling limit.

On a $300,000 dwelling limit:

• 1% = $3,000
• 1.53% = $4,590
• 2% = $6,000
• 5% = $15,000

Against a $1,000 flat all-perils deductible. The percentage deductible is more than four times the deductible that applies to everything else, and it applies to the claim a North Dakota owner is most likely to file.

Now the honest limitation, stated rather than buried. That 1.53% comes from one quote-database study. Unlike Florida with its statute or Rhode Island with its regulation, North Dakota has no statute, no administrative rule, and no Insurance Department bulletin standardizing wind/hail deductibles, and no second published prevalence study was found. Treat 1.53% as a well-sourced central estimate inside a documented 1%-to-5% range — not as a market-wide norm confirmed from multiple directions. Read your own declarations page. In this state that instruction is not boilerplate; it is the only reliable source.

Now put the range against the property. Section 3 works out that this rental produces $9,639.26 of net operating income in a good year:

• A 1% deductible ($3,000) is 31.1% of a full year's NOI
• A 1.53% deductible ($4,590) is 47.6% of a full year's NOI
• A 2% deductible ($6,000) is 62.3% of a full year's NOI
• A 5% deductible ($15,000) is 155.6% of a full year's NOI

You cannot pass any of it to a tenant.

And it stacks. North Dakota has no law fixing roof settlement basis, so the policy wording and the roof's age decide it, and four features commonly ride together here: a roof payment schedule valuing a 15-year-old architectural shingle roof at roughly 40 to 60 cents on the dollar, an ACV wind/hail roof endorsement past roughly 15 years, a cosmetic damage exclusion paying nothing for hail dents that do not impair function, and the percentage deductible taken off the reduced figure. Stacked, those can turn a headline replacement-cost policy into a payout well under half the cost of a new roof. North Dakota has no state roof mitigation grant program and no mandated roof-hardening discount. Nationally, the FHFA relaxed Fannie Mae and Freddie Mac requirements in March 2026 so that ACV roof coverage can satisfy a lender.

And there is no FAIR Plan

This is confirmed absent from three independent directions: North Dakota does not appear in Insurance.com's 33-state insurers-of-last-resort roster, nor in the NAIC's FAIR Plans overview, nor in the U.S. Treasury's list of state residual insurance market plans.

The detail worth knowing is that NDCC 26.1-25-02.1 defines what a residual market mechanism is — the statutory hook exists — but no active residential property plan has ever been stood up under it. The state's chosen alternative is preventative rather than residual: Insurance Commissioner Jon Godfread has pursued the North Dakota Insurance Incentive Program, aimed at attracting private carriers and stabilizing capacity before a last-resort mechanism becomes necessary.

The practical consequence for a landlord: a North Dakota property the admitted market declines has no state backstop, only surplus lines and specialty carriers, which are not rate-regulated by the state and carry no guaranty-fund protection.

3. A full worked example

The property. A single-family house at the North Dakota statewide median of $313,885.

The rent — read this carefully. This site does not carry rent data. The $1,750 a month used below is an assumption chosen to be plausible for a house at that price. It is not a market observation. Pull three to five real comparable listings for the specific neighborhood and substitute the actual number.

The other assumptions:

• Vacancy: 8% of gross rent (roughly one month of turnover a year)
• Property management: 10% of collected rent
• Repairs and maintenance: 5% of gross scheduled rent
• Capital reserve: 5% of gross scheduled rent
• Financing: 25% down, 30-year fixed at 7.00% — the rate is an assumption, not a quote
• No HOA

Step 1 — income

• Gross scheduled rent: $1,750 x 12 = $21,000
• Vacancy loss: $21,000 x 8% = $1,680
• Effective gross income: $21,000 - $1,680 = $19,320

Step 2 — operating expenses

Management is charged on rent actually collected, not scheduled rent:

• Management: $19,320 x 10% = $1,932
• Property tax: $313,885 x 0.92% = $2,887.74
• Insurance: $2,761
• Maintenance: $21,000 x 5% = $1,050
• Capital reserve: $21,000 x 5% = $1,050
• Total operating expenses: $9,680.74

Expense ratio: $9,680.74 / $19,320 = 50.11% of collected rent — comfortably inside the 35% to 55% band most rentals land in. North Dakota's expense structure is not the problem. The price-to-rent ratio is.

Step 3 — net operating income and cap rate

• NOI = $19,320 - $9,680.74 = $9,639.26
• Cap rate = $9,639.26 / $313,885 = 3.07%

The mortgage is deliberately absent from that figure. Cap rate exists to compare properties independently of how they are financed; putting debt service into it is the most common error in this whole exercise, and it makes two identical houses look like different investments because one buyer put more down.

Step 4 — debt service and cash flow

Loan: $313,885 x 75% = $235,413.75. At 7.00% over 30 years, principal and interest is $1,566.21 a month, or $18,794.52 a year.

• Annual cash flow = $9,639.26 - $18,794.52 = -$9,155.26
• Monthly cash flow = -$762.94
• Debt service coverage ratio = $9,639.26 / $18,794.52 = 0.51

Step 5 — cash-on-cash return

• Cash invested: $89,457.23 (Section 1)
• Cash-on-cash = -$9,155.26 / $89,457.23 = -10.23%

Rate sensitivity, since 7.00% was an assumption

• At 6.50%: P&I $1,487.98/mo, annual cash flow -$8,216.50
• At 7.00%: P&I $1,566.21/mo, annual cash flow -$9,155.26
• At 7.50%: P&I $1,646.05/mo, annual cash flow -$10,113.34

A full point of rate is worth about $1,896.84 a year — roughly eleven times what the entire insurance disagreement is worth.

The simplest version of the same finding

Add up the three bills a lender escrows:

• Principal and interest: $1,566.21
• Property tax: $2,887.74 / 12 = $240.65
• Insurance: $2,761 / 12 = $230.08
• Total: $2,036.94 a month

Against $1,750 of assumed rent, that is -$286.94 a month before vacancy, management, or a single repair.

4. The expenses people leave out

Vacancy, management, and capital reserves do not arrive as invoices. Nobody bills you for the month the house sits empty, or for the roof you will need in nine years, or — if you self-manage — for your own weekends. So they fall out of the mental model, and the property looks better than it is.

Here is the same house with those three removed and everything else identical:

The three omissions are worth $4,662 a year — $1,680 of vacancy, $1,932 of management, $1,050 of reserve. They flatter the cap rate by 1.49 percentage points and hide 50.9% of the annual loss. A reader who leaves them out sees a house losing $374 a month. It is losing $763. Exactly half the loss is invisible.

The 31.90% expense ratio in the left column is itself the tell. It falls below the 35%-to-55% range most real rentals land in, which is the signal that something is missing rather than that the property is unusually efficient.

Vacancy. Eight percent is roughly one month a year, which is what a single clean turnover costs between move-out and the next tenant's first full month. Setting it to zero assumes the house is never empty, including between tenants.

Management. Set it to zero and the return is paying you for your own labor rather than for the property. Self-managing this house saves $1,932 a year, lifting NOI to $11,571.26, the cap rate to 3.69%, and cash flow to -$601.94 a month. A real saving. It does not fix the deal, and it stops being free the moment you stop being available.

Capital reserves. In North Dakota the reserve is primarily a roof reserve, and Section 2 explains why the roof clock is shorter than the shingle warranty suggests. The 5%-of-rent convention above sets aside $1,050 a year. A harsher and equally common convention is 1% of purchase price a year for maintenance and 1% for capital, which here is $3,138.85 each. Run that way: total operating expenses $13,858.44, expense ratio 71.73%, NOI $5,461.56, cap rate 1.74%, cash flow -$1,111.08 a month.

So the honest cap-rate range for this property is 1.74% to 3.07% depending on which reserve convention you choose. Choose one deliberately.

What would actually have to be true

The rent this property needs. For cash flow to reach zero at this price and this financing, gross scheduled rent must reach about $33,575.91 a year, or $2,797.99 a month — 0.89% of purchase price per month. The assumed $1,750 rent is 0.56% of price.

The price this rent supports. Hold rent at $1,750 and solve for the price at which cash flow reaches zero with 25% down: about $126,280, roughly 40% of the median.

The down payment this price needs. Keep the $313,885 price and the $1,750 rent and solve for the loan the NOI can service: about $80,327 — which means roughly $233,558 down, or 74% of the price.

5. What actually varies by county here — and what varies more

North Dakota's two major counties differ on both lines, and remarkably they nearly cancel.

Take the identical $313,885 house at $1,750 rent and apply each county's actual tax rate and average premium:

Cass has the highest effective property tax rate of any North Dakota county at 1.16%, which costs $847.49 a year more than Burleigh's 0.89%. Burleigh's insurance runs $683 higher. Net: $164.49 of NOI separates them, and 0.05 points of cap rate. In North Dakota the county choice is close to a wash — which is genuinely unusual and worth knowing, because in Nebraska or Florida it is the whole story.

Now run each county at its own median price and its own assumed rent:

• Cass County at $325,000 with an assumed $1,800 rent, 1.16% tax and $2,330 insurance: cash in $92,625, NOI $9,624.80, cap rate 2.96%, cash flow -$819.60 a month, DSCR 0.49. Breakeven rent: $2,925.83 a month, or 0.90% of price.
• Burleigh County at $360,000 with an assumed $1,900 rent, 0.89% tax and $3,013 insurance: cash in $102,600, NOI $10,381.40, cap rate 2.88%, cash flow -$931.20 a month, DSCR 0.48. Breakeven rent: $3,179.13 a month, or 0.88% of price.

The variable that actually matters here

Now the point of this section. Hold the county, the rent, the tax rate, and the premium constant, and change only which source you believe about the statewide median price:

A 0.57-percentage-point cap rate swing and $255.34 a month of cash flow, entirely from disagreement about what the median house costs. Compare that with the $170-a-year insurance disagreement, or the $164.49 that separates the two counties. In North Dakota, the largest source of uncertainty in your analysis is not an expense line — it is the price, and it comes from the market being small enough that different methodologies land in genuinely different places.

The practical response is simple and it is not a data problem at all: you are not buying the statewide median, you are buying one house at one contract price. Use that number. The state median is context, not an input.

Two further things to check for a specific address:

The taxing district. Ownwell's Burleigh County read shows within-county rates ranging from 0.61% in Menoken township to 1.09% in Bismarck city. The county average conceals a near-doubling.

Hail history at the parcel. Carriers price the address's own claim record. A house that has taken two hail claims in five years can be priced very differently from the county average — or non-renewed, with no FAIR Plan behind it.

6. Financing a rental is not financing a home

These are the standard mechanisms across the mortgage market. Any specific rate or overlay is your lender's, not this article's.

Down payment. Conventional financing on a non-owner-occupied one-unit property generally requires more equity than an owner-occupied purchase — 20% is usually the floor and 25% the common expectation, which is why this article models 25%. FHA and VA are not available for a property you do not occupy, and NDHFA's FirstHome and DCA/Start assistance are owner-occupancy programs a rental cannot use. The genuine exception is house hacking — a two-to-four-unit property you live in one unit of qualifies for owner-occupied programs.

Rate. Investment-property loans price above owner-occupied loans. Fannie Mae and Freddie Mac apply loan-level price adjustments for investment occupancy that scale with loan-to-value and credit score; lenders pass those through as rate or points. The 7.00% modeled above is an assumption.

Reserves. Lenders typically require post-closing reserves — months of principal, interest, taxes, and insurance held in liquid assets — scaling with the number of financed properties you own. In North Dakota you want those reserves regardless, because Section 2's wind/hail deductible is a four-to-five-figure cash event from an ordinary thunderstorm, with no residual market behind you if the claims make you uninsurable.

The 2026 conforming loan limit for a one-unit property is $832,750 statewide — North Dakota has no FHFA-designated high-cost areas. At North Dakota prices, conforming limits are not the constraint.

Rental income counting. Lenders credit a portion of market or lease rent toward qualifying, not all of it. Ask what percentage yours uses and whether they need an appraiser's rent schedule.

DSCR loans. A debt service coverage ratio loan qualifies the property rather than the borrower, comparing property income to debt service and largely skipping personal income documentation. The trade is a higher rate, a larger down payment, frequent prepayment penalties, and a minimum DSCR — commonly stated at or above 1.0 and often above 1.2.

Look at Section 3. This property's DSCR is 0.51, and even with vacancy, management, and reserves stripped out it is 0.76. It does not qualify at 75% loan-to-value.

Budget the attorney. NDCC 26.1-20-05 requires a licensed attorney to examine and certify title. That is a real line item and it is not optional.

7. What to check before you buy in this state

Insurance, and read the declarations page yourself, because in this state it is the only reliable source.

1. Get a bindable landlord policy quote for the specific address — not a homeowners quote, not a statewide average.
2. Read the wind/hail deductible off the quote and multiply it into dollars against the dwelling limit. North Dakota permits 1% to 5%; the statewide average is a single-source estimate and your policy is what governs. Write the dollar figure down. It is your minimum cash reserve.
3. Ask explicitly whether the roof settles at replacement cost or actual cash value, and whether a roof payment schedule applies.
4. Ask whether the policy carries a cosmetic damage exclusion. Hail dents that do not impair function pay nothing under one.
5. Get the roof age in writing and ask about the parcel's hail claim history.
6. Confirm the policy carries loss of rents coverage and find out how many months it pays.
7. Understand that if you are non-renewed, there is no North Dakota FAIR Plan. NDCC 26.1-25-02.1 defines the concept; nothing has been built under it. Surplus lines is the entire fallback, without guaranty-fund protection.

Property tax, from the parcel.

1. Pull the actual parcel rate from the county. County averages conceal township-to-city spreads that can approach 2x within a single county.
2. Do not expect any credit to survive. Every North Dakota property tax credit requires owner occupancy.

The rent and the price, from the actual deal.

1. Pull three to five genuine comparable rentals for the specific neighborhood and note how long they sat.
2. Divide monthly rent by purchase price. Section 4's breakeven for this example was 0.89%.
3. Ignore the statewide median entirely once you have a contract price. Section 5 shows the published medians differ by 15%, which is worth more than every expense disagreement in this article combined. Your contract price is not uncertain.

The law, from the statute rather than from an article.

1. Do not take eviction timelines, notice periods, security-deposit handling, or late-fee rules from a blog — including this one. North Dakota's leasing of real property is governed principally by North Dakota Century Code Chapter 47-16. Read it at the Legislature's own site, https://ndlegis.gov/cencode, or have a North Dakota attorney walk you through it. You will already have an attorney engaged for the title opinion; ask them.
2. Check city rules separately. Fargo and Bismarck have their own rental registration and inspection requirements that state law does not cover.

The money and the tax treatment.

1. Size your cash reserves against the wind/hail deductible in dollars, not against a month of mortgage payments.
2. Ask a North Dakota CPA how the property will be taxed, including depreciation, passive activity loss rules, and North Dakota's own income tax treatment of rental income.

What to do next

Every figure above came from a data file or was computed in front of you, and where the data was thin the article said so rather than inventing precision.

The North Dakota rental analysis calculator does exactly the work in Sections 3 and 4 — enter your price, your real local rent, and your own vacancy, management, and reserve assumptions, and it produces NOI, cap rate, cash flow, cash-on-cash, and DSCR. Use your actual contract price, not the statewide median; Section 5 explains why that single substitution removes the largest uncertainty in the whole analysis.

The North Dakota insurance premium estimator will get you closer to a real figure than the $2,761 midpoint, and it converts the 1%, 1.53%, and 5% wind/hail deductibles into actual dollars rather than leaving them as percentages on a declarations page.

The North Dakota mortgage payment calculator gives you the principal and interest figure for the rate you are actually quoted, which Section 3 shows is worth about $1,896.84 a year per point.

This article is general educational information about rental property arithmetic in North Dakota, based on figures current as of August 2026. It is not investment, tax, insurance, or legal advice. The rent figures in the worked examples are stated assumptions, not market data. Several North Dakota figures are explicitly single-source or unconfirmed in this site's data, and the article labels each of them where used. Insurance premiums, property tax rates, and mortgage rates change and vary by property. Consult a North Dakota CPA, a licensed North Dakota insurance agent, and a North Dakota real estate attorney before buying.