Bismarck vs. Fargo: Where is the Best ROI for Rental Investors in 2026?

Category: Real Estate Investing | Read Time: 4 Minutes

If you are looking to invest in North Dakota real estate in 2026, the first question is usually geography. Most eyes immediately turn to Fargo—it’s the biggest city, it has the fastest population growth, and it grabs the national headlines.

But if you are chasing ROI (Return on Investment) rather than just population charts, the numbers tell a different story.

At New Horizon Property Management, we analyze the data daily. While Fargo offers volume, Bismarck (and emerging markets like Minot and Jamestown) is quietly offering superior cash flow for the savvy investor. Here is the data-driven breakdown of why your next rental purchase should be in Central North Dakota.

1. The "Hidden" Profit Killer: Property Taxes

When calculating ROI, many investors look at the mortgage and the rent, but forget the tax bill. This is where Bismarck has a distinct advantage.

• Fargo (Cass County): The average effective property tax rate hovers around 1.16%.
• Bismarck (Burleigh County): The average effective property tax rate is significantly lower at roughly 0.89%.

The Investor Impact: On a $300,000 investment property, investing in Bismarck saves you approximately $800+ per year in pure cash flow compared to Fargo. Over a 10-year holding period, that is $8,000 back in your pocket just for choosing the right county.

2. Rent-to-Price Ratio

Fargo’s rental market is heavily influenced by NDSU students. While this guarantees tenant demand, it also floods the market with "efficiency" apartments and keeps average rents lower.

• Fargo: The market is saturated with student housing and lower-cost rentals, keeping the average rent hovering around $878 - $1,000.
• Bismarck: With a tenant base driven by the State Capitol, medical hubs, and energy sector, the average rent commands a premium, with some data showing averages as high as $1,312.

The Bottom Line: You can often buy a single-family home in Bismarck for a comparable price to Fargo, but command significantly higher monthly rent because you are renting to professionals and families, not just students.

3. Tenant Stability vs. Turnover

Turnover is the silent killer of rental yields. Every month your unit sits empty, your ROI plummets.

• The Fargo Model: High turnover. With a massive student population (approx. 14,000 students), leases often turn over every 12 months in sync with the school year. This leads to higher wear-and-tear and frequent vacancy costs.
• The Bismarck Model: High stability. The Bismarck economy is anchored by government and healthcare. These tenants tend to stay for years, not semesters. A stable, long-term tenant in a single-family home in Mandan or Bismarck will almost always outperform a high-turnover apartment in Fargo.
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4. The "Sleeper" Markets: Jamestown & Minot

If you are priced out of the "big city" markets, look at the yield opportunities in the secondary markets we serve.

• Minot: With the Air Force Base providing a constant stream of housing allowance (BAH) backed tenants, Minot offers recession-resistant demand.
• Jamestown: Lower entry prices mean your dollar goes further. You can acquire a multi-family unit or mobile home in Jamestown for a fraction of the cost of Fargo, leading to a much higher "Cash on Cash" return.

Conclusion: Don't Follow the Crowd

Fargo is a great market for appreciation, but Bismarck is the market for cash flow.

Low property taxes, higher average rents, and professional tenant demographics make Central North Dakota the smart choice for the 2026 investor. But maximizing that ROI requires a management team that understands the local landscape.

Ready to invest? New Horizon Property Management specializes in the Bismarck, Minot, and Jamestown markets. We handle the day-to-day so you can focus on growing your portfolio.