Location: Meeker County, MN | Metro: St. Cloud, MN MSA
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 | $790 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,690 |
| 5 Bedrooms | $1,960 |
| 6 Bedrooms | $2,195 |
| 7 Bedrooms | $2,371 |
| 8 Bedrooms | $2,490 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,480 | $287,859 | 0.51% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 55329 reveals an interesting dynamic between government-subsidized rental income and market-driven rental rates. Using the Fair Market Rent (FMR) for a 2-bedroom apartment set at $970 per month for FY 2024, the annualized income would be $11,640. Given the median home value of $286,818 in this area, the implied gross yield from the FMR scenario is approximately 4%. This calculation is derived by dividing the annualized rental income ($11,640) by the median home value ($286,818).
In contrast, using the market rent figure of $920 per month from the Census ACS, the annualized income drops to $11,040. This results in an implied gross yield of about 3.8% when compared to the median home value. The difference between these two yields is minimal, but it's important to note that the FMR scenario provides a slightly higher potential return.
The 13.5% renter density in ZIP 55329 suggests that the majority of homeowners are likely to be owner-occupiers rather than landlords. However, this does not necessarily preclude opportunities for Section 8 investments. It's crucial to consider the demand for affordable housing, which can often exceed the supply in areas with high owner-occupancy rates.
The lack of available data on Days on Market (DOM) makes it challenging to predict how quickly properties might be leased under Section 8. Despite this, the gross yield comparison remains a key metric for investment viability. At 4%, the FMR scenario offers a marginally better return, making it the more favorable option for landlords and small-portfolio investors looking to capitalize on Section 8 tenancies.
Investors should also factor in the stability and reliability of Section 8 payments, which are guaranteed by the federal government, versus the variability of market rents. While the gross yield is only slightly higher in the FMR scenario, the security of the income stream could outweigh the lower yields in the market rent scenario, especially in light of economic uncertainties.
In summary, for ZIP 55329, the Section 8 FMR scenario presents a gross yield of around 4%, while the market rent scenario offers a yield of roughly 3.8%. Given the context of the area, the FMR scenario appears to be the more realistic and beneficial option for those interested in Section 8 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.