Location: Minneapolis-St. Paul-Bloomington, MN | Metro: Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,430 |
| 1 Bedroom | $1,610 |
| 2 Bedrooms | $1,960 |
| 3 Bedrooms | $2,560 |
| 4 Bedrooms | $2,870 |
| 5 Bedrooms | $3,329 |
| 6 Bedrooms | $3,728 |
| 7 Bedrooms | $4,026 |
| 8 Bedrooms | $4,227 |
U.S. Census Bureau data (2024)
If you are considering investing in ZIP code 55068 (Rosemount, MN) for Section 8 properties, follow this decision tree to determine if it's a good investment.
1) Does FMR $1980 (zip FY 2024) clear debt service on a $408,837 property?
No: The Fair Market Rent (FMR) of $1980 does not cover the debt service on a property valued at $408,837. Debt service typically includes mortgage payments, property taxes, insurance, and maintenance costs. At this FMR level, the rental income would be insufficient to meet these financial obligations.
It Depends: This scenario applies if you plan to purchase a property below the median value or if your financing terms result in lower debt service requirements. However, without specific details on your loan structure and other expenses, it's unlikely that the $1980 FMR will suffice.
2) Is market rent $2,069 (ZORI) above, at, or below FMR?
Above: The Zillow Observed Rental Index (ZORI) of $2,069 is higher than the FMR of $1980. This means that market rents are favorable for landlords who do not rely solely on Section 8 vouchers. However, for those strictly interested in Section 8 properties, this indicates a gap between market expectations and government-set rates.
At: This condition would apply if market rents were close to the FMR. In ZIP 55068, they are not, but if market conditions change, this could become relevant. It suggests a balanced situation where Section 8 vouchers might be competitive with market rents.
Below: Not applicable as the ZORI is above the FMR.
3) Are 12.9% renters + 33-day DOM enough demand?
No: With only 12.9% of the population renting and a Days on Market (DOM) of 33 days, the demand for rental properties, especially those that accept Section 8 vouchers, may be insufficient. A lower percentage of renters and longer DOM suggest a less active rental market, which could translate into fewer tenants interested in Section 8 properties.
Yes: This scenario would apply if the rental market were more robust, with a higher percentage of renters and shorter DOM. However, based on the given data, this is not the case for ZIP 55068.
It Depends: While the rental rate is low, it could still be viable depending on the local Section 8 program's size and efficiency. Additionally, consider the broader economic context of Rosemount, MN, such as job growth and migration trends, which could influence future demand.
In conclusion, for ZIP 55068 (Rosemount, MN), the answer to whether you should buy here for Section 8 investments is generally No. The FMR does not clear the debt service on a median-priced property, market rents exceed the FMR, and there is limited demand indicated by the low percentage of renters and longer DOM. These factors collectively suggest a challenging environment for Section 8 landlords and investors.
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.