Location: Minneapolis-St. Paul-Bloomington, MN | 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 analysis of ZIP code 54723 reveals mixed prospects for landlords and small-portfolio investors considering Section 8 participation.
The first question concerns the viability of rent math. The Fair Market Rent (FMR) for ZIP 54723 in fiscal year 2024 is set at $1,270. However, the Census American Community Survey (ACS) reports the average market rent at $1,066. This discrepancy means that landlords participating in Section 8 may face a shortfall of $204 per month if they rely solely on the FMR to cover their costs. Landlords must ensure that other income sources or economies in property management can bridge this gap.
Regarding the affordability of acquisition, the median home value in ZIP 54723 stands at $310,506. Unfortunately, the data does not provide insights into the typical days on market (DOM) or the percentage of homes that require price cuts to sell. Despite this lack of detail, the median home value suggests a significant investment, which may deter some small-portfolio investors due to the high capital requirement.
Tenant demand in ZIP 54723 is moderate. With a total population of 973, the renter share is 16.4%. This indicates that approximately 160 residents are potential renters. While this number is not negligible, it is relatively small compared to larger metropolitan areas, which could limit the pool of eligible tenants for Section 8 properties.
In summary, while there is a modest tenant demand in ZIP 54723, the disparity between the FMR and market rent presents a financial challenge for landlords. The high median home value also makes property acquisition less accessible for smaller investors. Therefore, participation in Section 8 should be carefully considered, especially regarding the potential for rental income shortfalls and the limited pool of prospective tenants.
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.