Underwood, a small yet vibrant community in Otter Tail County, Minnesota, is known for its friendly atmosphere, beautiful landscapes, and a strong sense of community. Surrounded by lakes and outdoor recreational opportunities, it offers a unique living experience for those who appreciate a slower pace of life with convenient access to modern amenities. This article explores the best residential areas in Underwood, detailing their characteristics, housing options, and average prices.
Table of Contents
Downtown Underwood

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Downtown Underwood is the heart of the community, where residents can enjoy local shops, cafes, and community events. It’s an ideal location for those who appreciate a bustling neighborhood atmosphere with easy access to amenities.
Characteristics of the Downtown Underwood
* Culture: Local festivals, art shows, and farmers markets
* Transportation: Well-connected by local roads; public transport options limited
* Services: Grocery stores, restaurants, and community centers
* Environment: Vibrant and community-oriented
Housing Options in the Downtown Underwood
Single-family homes, Townhouses
Average Home Prices in the Downtown Underwood
* Buying: $200,000 – $300,000
* Renting: $1,200 – $1,600/month
Lake Nearby Area

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This picturesque area near the lake offers stunning views and access to water activities, making it a popular destination for families and nature enthusiasts. It’s ideal for those looking for a tranquil lifestyle.
Characteristics of the Lake Nearby Area
* Culture: Outdoor activities such as fishing, boating, and hiking
* Transportation: Car required; some seasonal bike paths
* Services: Limited local services; requires trips to town for bigger shopping
* Environment: Serene and nature-focused
Housing Options in the Lake Nearby Area
Lakefront cabins, Modern homes
Average Home Prices in the Lake Nearby Area
* Buying: $250,000 – $400,000
* Renting: $1,500 – $2,000/month
Underwood Hills

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Underwood Hills is a suburban neighborhood that's perfect for families looking for a quiet environment. The area features spacious lots and a close-knit community feel, with parks and recreational facilities.
Characteristics of the Underwood Hills
* Culture: Family-friendly events and active community involvement
* Transportation: Car essential; well-maintained roads for easy access
* Services: Nearby schools, parks, and playgrounds
* Environment: Quiet and family-oriented
Housing Options in the Underwood Hills
Single-family homes, Duplicates
Average Home Prices in the Underwood Hills
* Buying: $220,000 – $320,000
* Renting: $1,300 – $1,800/month
Rural Underwood

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Ideal for those seeking a more rural lifestyle, this area features larger properties and agricultural land. Residents enjoy privacy, serene landscapes, and ample outdoor space.
Characteristics of the Rural Underwood
* Culture: Agricultural activities and outdoor hobbies
* Transportation: Car is necessary; rural roads may be less maintained
* Services: Limited but sufficient for rural living with basic amenities available
* Environment: Peaceful and spacious
Housing Options in the Rural Underwood
Farmhouses, Large estates
Average Home Prices in the Rural Underwood
* Buying: $180,000 – $300,000
* Renting: $1,000 – $1,500/month
Otter Tail Ridge

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Otter Tail Ridge is a sought-after neighborhood known for its scenic views and upscale homes. This area typically attracts those looking for higher-end properties and an exclusive ambiance.
Characteristics of the Otter Tail Ridge
* Culture: Focus on luxury outdoor living and community gatherings
* Transportation: Well-connected roads; public transport limited
* Services: Private clubs and high-end services available locally
* Environment: Sophisticated and upscale
Housing Options in the Otter Tail Ridge
Luxury homes, Executive rentals
Average Home Prices in the Otter Tail Ridge
* Buying: $350,000 – $600,000
* Renting: $2,000 – $3,000/month
West Underwood

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West Underwood is a cozy neighborhood that has experienced recent revitalization. With quaint homes and new developments, it is perfect for young professionals and growing families.
Characteristics of the West Underwood
* Culture: Emerging social scene and community engagement
* Transportation: Car recommended; proximity to main highways
* Services: Local cafes, fitness centers, and emerging businesses
* Environment: Trendy and developing
Housing Options in the West Underwood
Bungalows, New constructions
Average Home Prices in the West Underwood
* Buying: $200,000 – $280,000
* Renting: $1,100 – $1,600/month
Frequently Asked Questions About the Best Residential Areas in Underwood:
The best residential areas in Underwood include Downtown Underwood, Lake Nearby Area, Underwood Hills, Rural Underwood, Otter Tail Ridge, and West Underwood.
Underwood Hills and the Downtown area are highly suitable for families due to nearby schools and parks.
Yes, the Lake Nearby Area offers many lakefront properties ideal for water enthusiasts.
Housing prices in Underwood generally range from $200,000 to $600,000 depending on the neighborhood and property type.
Public transportation is limited; most residents rely on personal vehicles for commuting.
Downtown Underwood is known for hosting the most community events and local festivals.
Underwood offers a tranquil lifestyle with plenty of outdoor activities, community engagement, and access to essential services.
Yes, Underwood's peaceful environment and lake access make it an attractive option for retirees.
The Rural Underwood area offers farmhouses, large estates, and properties suited for agricultural use.
Average rental prices in Underwood range from $1,000 to $3,000, depending on the property size and location.
Conclusion on the Best Residential Areas in Underwood:
Underwood, MN, presents a diverse selection of residential areas catering to different lifestyles and preferences. From the vibrant community atmosphere in Downtown Underwood to the tranquil settings by the lake, each neighborhood offers unique values. Families can thrive in Underwood Hills, while those seeking luxury might find fulfillment in Otter Tail Ridge. The balance of rural charm, outdoor excitement, and community spirit makes Underwood an appealing choice for those looking for a place to call home. With growing amenities and a welcoming ambiance, this small town is indeed a gem in Otter Tail County.
About the Author

Published by:Eribert De Oliveira
Mechatronics Engineer and founder of Mi Inmueble Online, with a background in real estate. I combine technology and analysis to help you find the best areas to live.