Invest In Apartment Buildings In Sioux Falls, SD

What Keeps Sioux Falls Renters Coming

Sioux Falls is growing fast, and renters are growing faster. The city has 34,786 renter households, 40.5% of all households (U.S. Census ACS 2020–2024), against 31.4% for South Dakota. Population rose 13.7% in five years to 201,469, and renter households rose 22.2%. Employed residents grew 15.6%, and unemployment is 2.5%. Median gross rent is $1,035 a month, up 25.2% from $827 in the 2015–2019 survey and above the state median of $946. Median household income rose 26.8% to $75,970, and 40.7% of renters spend 30% or more of their income on housing.

Health care is the biggest employer by a wide margin. The Sioux Falls Development Foundation's June 2026 list puts Sanford Health and the Good Samaritan Society at 11,000 to 11,500 workers and Avera Health at 9,500 to 10,000. The Sioux Falls School District and Smithfield Foods, with its pork plant, follow at 3,000 to 4,000 each. Amazon and Hy-Vee each employ 2,000 to 2,500. Banking is a long-standing local strength: Citi, Wells Fargo and First PREMIER Bank each list 1,000 to 1,500 workers, alongside the VA Medical and Regional Office and LifeScape.

Health care is still adding space. In March 2024 Avera announced $245 million in building projects, which it called the largest in its history: a six-story tower at Avera McKennan Hospital & University Health Center with 158 more beds, and a three-story building on the Avera on Louise Health Campus. Together they add about 350,000 square feet of patient care space. Avera put the Louise building's completion in early 2026 and the McKennan tower's in early 2027. Sanford made a similar bet earlier, breaking ground in June 2022 on a nine-story, 205,000-square-foot orthopedic hospital south of Sanford Children's Hospital. Bigger hospitals need more nurses, techs and support staff, and many of those workers rent, at least when they first move to town.

That gives owners a broad renter pool of nurses, plant and warehouse workers, and back-office finance staff. South Dakota also has no personal income tax, a point in the city's favor for workers comparing it with neighboring states.

New Supply And Rents In Sioux Falls

Sioux Falls went through a heavy apartment building wave, and the market is still working through it. The South Dakota Multi-Housing Association's January 2026 survey put overall vacancy at 6.62%, up from 5.68% the prior July but well below the 9.46% of a year earlier. Another 167 newly built units were still in lease-up and not yet counted. Local operators told SiouxFalls.Business in March 2026 that rents were flat in 2025 and concessions were declining, and one expected rent increases of 2% to 3% during 2026.

The pipeline is picking up again. Multifamily permits through February 2026 covered 270 units, up from 192 a year earlier and 109 two years before. The Census rental vacancy rate is 5.4%. It covers every kind of rental, including rented houses, while the association surveys apartment communities, so the two figures don't line up exactly.

The Census shows a large, fairly new apartment base. Sioux Falls has 27,060 homes in buildings with five or more units, 30% of its housing, and that count rose 26.5% in five years. The median home was built in 1993. For apartment syndications in Sioux Falls, the newer stock means less deferred maintenance than in older Midwest cities, but more direct competition from recent lease-ups. A buyer should map every project delivering within a few miles and underwrite flat rents until concessions burn off.

State rules here are light for owners. South Dakota has no statewide rent control, so rents are set by the market rather than a cap. State law (S.D. Codified Laws § 43-32-6.1) limits a security deposit to one month's rent, unless both sides agree to more because special conditions put the property at risk. Month-to-month tenants get at least 30 days' written notice of a rent increase. Light rules don't remove the main risk in this market, which is competition from new buildings, but they keep operating costs and lease terms predictable.

Sioux Falls Areas We Watch

Most new apartment building is on the edges of the city, with infill downtown.

Where Sioux Falls Stands Among Its Peers

We track 6 South Dakota cities. Sioux Falls places 2nd for median gross rent, 3rd for renter share and 2nd for five-year rent growth. That puts its rents near the top of the group, so tenants here are already paying more than in most nearby markets. In raw numbers, Sioux Falls has about 24,352 more residents, 6,320 more renter households and 5,669 more homes in buildings with 5 or more units than in the 2015–2019 survey. Growth in renter households and new apartment homes has been roughly in balance.

Sioux Falls Compared With South Dakota

Sioux Falls's median gross rent of $1,035 is above the South Dakota median of $946, and its renter share is 40.5% compared with 31.4% statewide.

Can Tenants Afford Sioux Falls Rents?

At $1,035 a month, the median Sioux Falls rent adds up to $12,420 a year, or roughly 16.3% of what the median household earns. Under the common 30% guideline, a household needs about $41,400 a year to cover that rent comfortably. That's a heavier load than the South Dakota average of 15.1%. Renters usually earn less than the all-household median, so the real burden for tenants is higher than this simple ratio shows.

In dollars, Sioux Falls rent climbed $208 a month over five years and household income climbed $16,057 a year. The two have moved together, so affordability today looks much like it did five years ago.

Quick Facts: Sioux Falls Rental Market

If you only read one part of this page, read this list. Every figure is from the Census Bureau's ACS 5-year estimates.

• Sioux Falls, SD has 201,469 residents, up 13.7% from the 2015–2019 survey (U.S. Census ACS 2020–2024).
• Median household income in Sioux Falls, SD is $75,970, up 26.8% over five years (U.S. Census ACS 2020–2024).
• Median gross rent in Sioux Falls, SD is $1,035 a month, up 25.2% over five years (U.S. Census ACS 2020–2024).
• 40.5% of households in Sioux Falls, SD rent, about 34,786 renter households (U.S. Census ACS 2020–2024).
• 30% of homes in Sioux Falls, SD are in buildings with 5 or more units (U.S. Census ACS 2020–2024).
• The rental vacancy rate in Sioux Falls, SD is 5.4%, and 40.7% of renters spend 30% or more of income on rent (U.S. Census ACS 2020–2024).
• The median home in Sioux Falls, SD was built in 1993 (U.S. Census ACS 2020–2024).

What We Look For In A Sioux Falls Apartment Building

Our buy box in Sioux Falls is the same one we use nationwide: 5+ unit apartment buildings, stabilized or in need of work, priced on today's rents. Then we test the property against the local data on this page and a full inspection of its major systems.

South Dakota has no state income tax on wages, and property taxes are often one of the largest expenses for apartment owners. We underwrite the tax bill after purchase, not the seller's current bill, since a sale often resets the assessment. South Dakota has no statewide rent control law, though local rules on notices, fees and deposits still apply. Insurance quotes in South Dakota reflect hail and wind damage, so we get a quote before we make an offer.

After a stretch of fast rent growth, we keep rent assumptions modest and leave room for concessions if new supply opens nearby.

Questions To Ask About An Apartment Syndication In Sioux Falls

The data on this page turns into a short checklist for evaluating an apartment syndication in Sioux Falls.

• What vacancy does the plan assume? Rental vacancy in Sioux Falls is 5.4%. A plan that assumes much lower vacancy than the market should explain why.
• What rent growth is underwritten? Rents here rose 25.2% over five years. Ask whether the plan assumes that pace continues, and what happens to the deal if rents stay flat.
• How was the property tax bill estimated? A sale often triggers a reassessment, so the bill after purchase can be well above what the seller pays today.
• How big is the repair reserve? The median home in Sioux Falls was built in 1993, and even newer buildings need money set aside for roofs, HVAC and appliances.
• How will the building compete with new supply? Homes in 5+ unit buildings in Sioux Falls rose 26.5% over five years, so newer properties are part of the competition.
• How and when does capital come back? Ask what the plan is for a refinance or sale, and what happens if that takes longer than expected.

How Passive Investing In A Sioux Falls Apartment Syndication Works

Here's the short version. The general partner, in this case Skyline, finds an apartment building in Sioux Falls, buys it with a loan and investor capital, and runs it. Limited partners supply part of that capital and hold an ownership share, without landlord duties or personal liability for the loan.

Expect your money to be tied up for years, with no easy way to sell your share early, and remember that any investment can lose money. Most deals are open only to accredited investors under Rule 506(b) or 506(c). See investing with Skyline Capital for how we work with limited partners.

Getting Started

The first step is the investor network. It's free, and it's how we share market notes and get to know investors. If we buy in Sioux Falls or elsewhere and you're eligible, we'll reach out privately with the details.