Location: Rice County, MN | Metro: Rice County, MN
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 | $1,070 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,410 |
| 3 Bedrooms | $1,840 |
| 4 Bedrooms | $2,360 |
| 5 Bedrooms | $2,738 |
| 6 Bedrooms | $3,067 |
| 7 Bedrooms | $3,312 |
| 8 Bedrooms | $3,478 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,410 | $312,979 | 0.45% | F |
| 3BR | $1,840 | $367,185 | 0.5% | F |
| 4BR | $2,360 | $413,530 | 0.57% | F |
| 5BR | $2,738 | $429,449 | 0.64% | D |
U.S. Census Bureau data (2024)
The ZIP code 55046, located in Lonsdale, MN, presents a unique real estate investment scenario when analyzed through the lens of yield and stability for Section 8 investments.
On the yield axis, the area shows significant potential. The Fair Market Rent (FMR) for the metro area in fiscal year 2026 is set at $1,560, which is notably higher than the local market rent of $925. This difference suggests that properties in ZIP 55046 can command higher rental rates through Section 8 programs, leading to a higher net yield for landlords. Additionally, the median home value of $367,675 indicates that the initial investment required to enter this market is substantial, but the potential returns, particularly from government-assisted tenants, are attractive.
Moving to the stability axis, the picture becomes less clear. With only 8.7% of residents being renters, the overall demand for rental properties is relatively low. This could translate into fewer potential tenants and slower turnover rates, which might affect the consistency of cash flow. Furthermore, the lack of data on the number of days on the market (DOM) means there's uncertainty around how quickly properties can be rented out. However, the average household income of $95,912 provides some assurance that the local economy supports a stable tenant base, even if it is smaller in size.
Given these figures, ZIP 55046 appears to be a market that offers a balance between yield and stability. It is not a high-yield/low-stability flip-style market due to the lack of rapid turnover and the relatively low percentage of renters. Instead, it leans towards a steady-cashflow zone, where the higher FMR compared to the local market rent can provide reliable returns, albeit with a smaller pool of potential tenants. For landlords and small-portfolio investors, the key will be to carefully select properties that can take advantage of the higher Section 8 rents while managing the risks associated with lower overall rental demand.
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.