Location: Duluth, MN | Metro: Duluth, MN-WI MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,870 |
| 5 Bedrooms | $2,169 |
| 6 Bedrooms | $2,429 |
| 7 Bedrooms | $2,623 |
| 8 Bedrooms | $2,754 |
U.S. Census Bureau data (2024)
The analysis of ZIP code 54842 reveals several key points for potential Section 8 real-estate investments.
The first question is whether the rent math works. The Fair Market Rent (FMR) for ZIP 54842 in fiscal year 2024 is set at $1100. However, the current market rent, according to the Census ACS, is only $925. This means that landlords can expect a subsidy of $175 per unit to make up the difference between the lower market rent and the higher FMR. Landlords should ensure their property meets all Section 8 requirements to qualify for this subsidy.
Regarding the affordability of acquisition, the data shows a median home value of N/A, indicating that there isn't enough information to determine if homes are generally affordable in this ZIP code. The average number of days on the market (DOM) is also listed as N/A, which suggests that there is insufficient data to assess how quickly properties sell. Lastly, the percentage of homes requiring price cuts is listed as N/A, making it difficult to gauge the overall market conditions for property acquisition. These gaps in data suggest that further research is necessary to fully understand the acquisition costs and market dynamics.
There is a limited tenant demand in ZIP 54842. With a total population of 267, only 9.0% are renters. This low percentage indicates that the pool of potential tenants is quite small, which could affect the ability to find and retain Section 8 tenants. Given the small population size, even a slight decrease in the number of renters could significantly impact the availability of tenants.
Verdict: While the rent math does work in favor of landlords due to the subsidy gap, the lack of comprehensive data on median home values, DOM, and price cut percentages makes acquisition affordability uncertain. Furthermore, the limited tenant demand poses a significant challenge, given the small population and low renter share. Potential investors should proceed with caution and conduct thorough local market research before committing to Section 8 investments in ZIP 54842.
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.