Location: Dunn County, WI | Metro: Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,120 |
| 1 Bedroom | $1,270 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 54027 is centered around the significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the area, set at $1270 for fiscal year 2024, is notably higher than the market rent of $954, according to the latest Census ACS data. This creates a gap of $316, which translates to approximately 33% of the market rent.
In this scenario where the FMR exceeds the market rent, landlords and small-portfolio investors should view this as a yield play. By accepting Section 8 tenants, they can benefit from the higher subsidy rates, ensuring that their rental income remains competitive even if it's above the local market rate. This is particularly advantageous given that only 9.4% of residents are renters, indicating a relatively low competition for rental properties among the general population.
The median home value in the area stands at $401,870, suggesting a mix of homeowners and renters. With a median household income of $100,750, many residents might find renting more affordable than purchasing, especially if they are seeking lower-cost living arrangements. However, the FMR being set at $1270 means that landlords who accept Section 8 vouchers will be receiving a rate that is significantly higher than what the typical market would offer.
This makes ZIP 54027 an attractive market for those willing to participate in the Section 8 program. The higher subsidy rate helps cover the costs associated with maintaining and managing rental properties, while also providing a stable source of income. Landlords can expect to receive a consistent monthly payment that is well above the average market rent, thereby enhancing their investment yield.
However, there are considerations. Accepting housing voucher tenants often involves some administrative overhead and compliance with federal regulations. Despite these factors, the financial benefits of the FMR being above the market rent make this a compelling strategy for maximizing returns on rental investments in ZIP 54027.
Data Sources: FMR data from HUD (2027). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.