1031 Exchange in Iowa City MSA
The Iowa City MSA offers premium 1031 exchange opportunities with moderate cap rates, stable rental demand driven by University of Iowa and healthcare sectors, and competitive property taxes in Iowa's premier university town.
Population
173,105
Key Industries
University of Iowa, Healthcare (UIHC), Research
Table of Contents
Information is for educational purposes only. Consult qualified professionals for specific advice.
Local Tax Considerations
Property taxes, transfer taxes, and local incentives
Property Tax Rates
Average Rate
1.71% - 1.85%
Assessment Method
Assessed Value (Iowa Property Tax Code)
MSA rate (1.71%) vs State average (1.53%)
+12% above state average
Transfer Taxes & Fees
Transfer Tax Rate
No state transfer tax
Local recording fees and title insurance costs apply
Local Tax Incentives
Iowa Economic Development Authority Incentives
Various state incentives for business development and job creation
Eligibility: Qualifying commercial and industrial developments
University Research Park Incentives
Special incentives for technology and research companies
Eligibility: Companies locating in university research areas
Opportunity Zones
Number of Zones
2
Key Locations
- Downtown Iowa City
- East Iowa City
Opportunity Zones offer significant tax benefits for long-term investments, including deferral and potential elimination of capital gains taxes.
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Market Profile Dashboard
Economic indicators and market trends
Population
173,105
Growth: +1.8% annually
Median Income
$65,429
Unemployment
2.4%
Job Growth
+2.2% annually
Economic Drivers
Market Trends
Median Home Price
$297,162 - $367,500
Average Rent
$1,285/mo
Cap Rates
6.5% - 8.2%
Demographics
Median Age
29.8 years
Bachelor's Degree+
60.7%
Owner Occupied
58.2%
Property Type Analysis
Investment opportunities by asset class
Multifamily
Strong demand driven by University of Iowa students, faculty, and healthcare workers with stable institutional tenant base.
Market Metrics
- Cap Rates: 7.5%
- Vacancy Trends: Low vacancy at 4.8% due to university enrollment and healthcare employment
- Demand Forecast: Stable demand from university growth and healthcare expansion
Risk Factors
- Dependence on university enrollment trends
- Seasonal rental patterns with academic calendar
Opportunities
- University of Iowa $8B economic impact
- Growing healthcare and research sectors
Single-Family Rental
Popular with faculty, healthcare professionals, and graduate students seeking quality housing.
Market Metrics
- Cap Rates: 8.0%
- Vacancy Trends: Very low vacancy at 3.8% with excellent tenant retention
- Demand Forecast: Strong fundamentals with university and healthcare employment base
Risk Factors
- Higher property taxes affecting returns
- Academic calendar affecting some rental patterns
Opportunities
- High-income tenant base (faculty, healthcare)
- Strong appreciation potential in premium areas
Neighborhood Spotlights
Up-and-coming areas and investment hotspots
Downtown Iowa City
Historic downtown core with university proximity and vibrant student life
Investment Thesis
Opportunity zone benefits, strong student housing demand, and potential for appreciation as downtown continues to develop.
Median Price
$285,000
Price Growth
+7.2% YoY
Rental Yield
7.8%
Days on Market
28 days
Key Highlights
Development Pipeline
Downtown revitalization and mixed-use student housing projects
Coralville
Adjacent city with major healthcare facilities and family amenities
Investment Thesis
Healthcare worker housing demand, family rental market, and proximity to University of Iowa Hospitals.
Median Price
$325,000
Price Growth
+6.8% YoY
Rental Yield
6.8%
Days on Market
25 days
Key Highlights
Development Pipeline
Healthcare facility expansion and residential development
University Heights
Small affluent community adjacent to campus with premium housing
Investment Thesis
Premium rental market serving faculty and graduate students, excellent location, and strong property values.
Median Price
$485,000
Price Growth
+5.2% YoY
Rental Yield
5.8%
Days on Market
22 days
Key Highlights
Development Pipeline
Limited development due to size constraints
North Liberty
Fast-growing suburb with family amenities and good schools
Investment Thesis
Family rental market, rapid growth, and appeal to university staff and healthcare workers.
Median Price
$385,000
Price Growth
+8.5% YoY
Rental Yield
6.2%
Days on Market
28 days
Key Highlights
Development Pipeline
Continued suburban residential and commercial development
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Compare Markets
See how this MSA stacks up against others
Compare Markets
| Metric | Iowa City (Current) | Ames | Cedar Rapids | Dubuque |
|---|---|---|---|---|
| Population | 4.0M | 4.0M | 4.0M | 4.0M |
| Median Property Price | $750K | $750K | $750K | $750K |
| Average Cap Rate | 5.2% | 5.2% | 5.2% | 5.2% |
| Job Growth Rate | 2.1% | 2.1% | 2.1% | 2.1% |
| Rental Yield | 4.8% | 4.8% | 4.8% | 4.8% |
| Days on Market | 25 | 25 | 25 | 25 |
Frequently Asked Questions
Common questions about Iowa City 1031 exchanges
Iowa City offers balanced cap rates (6.5-8.2%), stable rental demand from University of Iowa ($8B economic impact), high education levels (60.7% bachelor's+), low unemployment (2.4%), and strong healthcare employment at University of Iowa Hospitals.
The University of Iowa generates $8B in economic impact (4% of state GDP) with 33,000+ students and thousands of faculty/staff, creating consistent rental demand. The academic medical center employs 10.4% of the workforce vs. 6.2% nationally.
Yes, Iowa City has two designated Opportunity Zones including downtown, offering potential tax benefits for qualifying investments including deferral and possible exclusion of capital gains.
The economy is anchored by University of Iowa ($8B impact), University of Iowa Hospitals & Clinics (major medical center), research activities, technology transfer, and government employment, providing stability and growth.
Iowa has higher property taxes (1.71% vs. 1.02% national) but no state transfer tax and strong economic fundamentals. The university's stability and healthcare growth help offset higher tax costs through strong rental demand and appreciation.