Location: Rice County, MN | Metro: Goodhue 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 | $1,180 |
| 1 Bedroom | $1,220 |
| 2 Bedrooms | $1,580 |
| 3 Bedrooms | $2,100 |
| 4 Bedrooms | $2,640 |
| 5 Bedrooms | $3,062 |
| 6 Bedrooms | $3,429 |
| 7 Bedrooms | $3,703 |
| 8 Bedrooms | $3,888 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,100 | $419,406 | 0.5% | F |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 55053 presents a unique opportunity for landlords and small-portfolio investors due to the significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2026, the FMR is set at $1,600, whereas the Census ACS data indicates that the average market rent is $1,000. This creates a $600 difference, which translates into a 60% premium for voucher tenants compared to the open-market rental rates.
This gap makes ZIP 55053 a prime location for a yield play strategy. With only 5.9% of residents being renters and a median home value of $423,426, it's evident that homeownership is predominant in this area. However, the median income of $101,406 suggests that many households might still struggle with housing costs, making them ideal candidates for the Section 8 program. By renting properties to voucher tenants, landlords can capitalize on the higher FMR rates, which are guaranteed by the government, thus securing a better return on investment.
The cost of housing voucher tenants below open-market rates is minimal since the government will cover the majority of the rent. This means that even though the market rate is lower, landlords will still receive the full FMR amount, effectively subsidizing the rent for those who cannot afford the higher costs. In essence, the FMR in ZIP 55053 provides a safety net for both tenants and landlords, ensuring stable and affordable housing while also offering a reliable income stream for property owners.
To summarize, the $600 premium, or 60% above market rent, that voucher tenants bring to the table in ZIP 55053 is a compelling reason for landlords to consider participating in the Section 8 program. Given the low percentage of renters and the high median home value, the potential for increased yields is substantial, making it a smart financial decision for those looking to maximize their returns on rental investments.
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.