Location: Minneapolis-St. Paul-Bloomington, MN | Metro: Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,530 |
| 1 Bedroom | $1,730 |
| 2 Bedrooms | $2,100 |
| 3 Bedrooms | $2,740 |
| 4 Bedrooms | $3,070 |
| 5 Bedrooms | $3,561 |
| 6 Bedrooms | $3,988 |
| 7 Bedrooms | $4,307 |
| 8 Bedrooms | $4,522 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,100 | $356,353 | 0.59% | F |
| 3BR | $2,740 | $408,284 | 0.67% | D |
| 4BR | $3,070 | $452,610 | 0.68% | D |
| 5BR | $3,561 | $493,725 | 0.72% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 55005, East Bethel, MN, reveals key insights into the potential returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in fiscal year 2024 is set at $1730 annually. This translates to a monthly rental income of approximately $144.17. Given the median home value of $402,867, the annualized FMR implies a gross yield of roughly 4.3%.
In contrast, the market rent for a 2-bedroom apartment, based on Census ACS data, stands at $1,810 per month, or $21,720 annually. Using the same median home value, this scenario yields a gross rental income of about 5.4%. These figures provide a direct comparison between the government-subsidized rental income and the potential market-driven income.
The implied gross-yield of 4.3% under the FMR scenario is lower compared to the market-driven gross-yield of 5.4%. However, considering the renter density in East Bethel is only 11.5%, it suggests that the majority of residents are homeowners rather than renters. This low renter density makes the FMR scenario more realistic for most properties in this area, as fewer units are likely to be rented out through the Section 8 program.
The N/A-day Days on Market (DOM) indicates that there isn't enough data to determine how long properties typically stay on the market before being rented, which could be due to the low number of rental transactions. This further supports the notion that the FMR-based gross-yield is a more accurate representation of what landlords can expect in ZIP 55005.
Investors should consider these gross-yields when evaluating the potential profitability of their investments in East Bethel. While the higher market rent scenario offers better immediate returns, the likelihood of securing tenants through Section 8 is more probable given the local demographic trends.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.