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 | $1,420 |
| 1 Bedroom | $1,600 |
| 2 Bedrooms | $1,940 |
| 3 Bedrooms | $2,530 |
| 4 Bedrooms | $2,840 |
| 5 Bedrooms | $3,294 |
| 6 Bedrooms | $3,689 |
| 7 Bedrooms | $3,984 |
| 8 Bedrooms | $4,183 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,940 | $253,890 | 0.76% | D |
| 3BR | $2,530 | $397,440 | 0.64% | D |
| 4BR | $2,840 | $456,306 | 0.62% | D |
| 5BR | $3,294 | $516,167 | 0.64% | D |
U.S. Census Bureau data (2024)
In ZIP code 55306, located in Burnsville, Minnesota, there are several factors that could go wrong for a Section 8 landlord. First, the disparity between the market rent at $1,445 and the Fair Market Rent (FMR) at $1,830 for fiscal year 2024 indicates potential challenges with tenant turnover. Tenants who are used to the subsidized rate might struggle to afford higher rents, leading to frequent moves. Second, vacancy exposure is a significant concern due to the lack of available data on days on market (DOM), which suggests that it may be difficult to predict how quickly properties will fill once they become vacant. Lastly, the deferred maintenance exposure is notable given the typical home value of $416,539 and the median income of $100,515. Landlords may face higher costs to maintain properties up to standards expected by tenants and the government, especially when residents have limited financial resources.
However, these risks are balanced by the high renter density in the area, with 33.5% of the population being renters. This high percentage typically translates into a robust demand for rental housing, including those seeking Section 8 vouchers. The concentration of renters often stabilizes the market, providing a steady pool of potential tenants who can leverage their vouchers to cover the rent.
The verdict for ZIP 55306 is moderate risk for a first-time Section 8 landlord. While there are significant challenges, the high renter share provides a measure of stability and demand that can offset some of the financial and operational risks involved.
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.