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 | $1,250 |
| 1 Bedroom | $1,420 |
| 2 Bedrooms | $1,720 |
| 3 Bedrooms | $2,250 |
| 4 Bedrooms | $2,520 |
| 5 Bedrooms | $2,923 |
| 6 Bedrooms | $3,274 |
| 7 Bedrooms | $3,536 |
| 8 Bedrooms | $3,713 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,420 | $354,475 | 0.4% | F |
| 2BR | $1,720 | $337,969 | 0.51% | F |
| 3BR | $2,250 | $417,833 | 0.54% | F |
| 4BR | $2,520 | $494,239 | 0.51% | F |
| 5BR | $2,923 | $532,087 | 0.55% | F |
U.S. Census Bureau data (2024)
The rent math in ZIP code 55025, located in Forest Lake, MN, within the Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area, does not favor landlords. The Fair Market Rent (FMR) set at $1590 for fiscal year 2024 falls below the market rent indicated by Zillow's Owner Occupied Rental Index (ZORI), which stands at $1,676. This means that landlords participating in the Section 8 program might struggle to cover their costs fully, as the government-set rental rates are lower than what the market currently demands.
Acquiring properties in this area is relatively affordable. With a median home value of $431,141, the cost of entry into the real estate market is manageable. The average Days on Market (DOM) is 36 days, suggesting a brisk pace of sales. Additionally, only 0.2% of homes are listed with a price cut, indicating that property values remain stable and that sellers are not feeling pressured to reduce prices significantly to attract buyers.
Tenant demand in ZIP 55025 is robust. The total population of 25,891 includes a substantial 24.8% who are renters. This high percentage of renters signals a healthy market for landlords, as there is a significant number of individuals actively seeking rental properties. However, it also suggests competition among landlords to attract tenants, particularly those eligible for Section 8 assistance.
In conclusion, while the rent math presents a challenge due to the discrepancy between the FMR and market rent, the acquisition cost remains reasonable with stable home values and quick sales. Tenant demand is strong, but landlords should be prepared for competitive pricing to secure tenants. The overall environment in ZIP 55025 leans towards being moderately attractive for small-portfolio investors, though they must carefully manage their costs and expectations regarding rental income.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.