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 | $1,390 |
| 1 Bedroom | $1,570 |
| 2 Bedrooms | $1,910 |
| 3 Bedrooms | $2,490 |
| 4 Bedrooms | $2,800 |
| 5 Bedrooms | $3,248 |
| 6 Bedrooms | $3,638 |
| 7 Bedrooms | $3,929 |
| 8 Bedrooms | $4,125 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,910 | $330,695 | 0.58% | F |
| 3BR | $2,490 | $474,924 | 0.52% | F |
| 4BR | $2,800 | $599,385 | 0.47% | F |
| 5BR | $3,248 | $746,466 | 0.44% | F |
U.S. Census Bureau data (2024)
ZIP code 55345 is located in the affluent suburb of Minnetonka, Minnesota. This neighborhood is characterized by its high median income of $145,332, which reflects the area's economic prosperity. The total population of 20,789 residents includes a relatively small percentage of renters at 14.7%, indicating that homeownership is prevalent. With a median home value of $534,584, it's clear that the housing market in this ZIP code is robust and skewed towards higher-end properties.
The rental economics in ZIP 55345 present an interesting opportunity. The Fair Market Rent (FMR) for the fiscal year 2024 is set at $1,920, while the actual market rent, as indicated by the Zillow Observed Rent Index (ZORI), stands at $1,560. This discrepancy suggests that there is potential for landlords to increase rents closer to the FMR without alienating tenants, especially those who might be receiving assistance through the Section 8 program. The gap between FMR and ZORI also implies that there is room for property improvements to justify higher rents, aligning well with the profile of a value-add buyer.
Given these conditions, ZIP 55345 would likely be more suitable for a hands-on value-add buyer rather than a hands-off voucher operator. The higher median income and home values suggest that tenants in this area are more likely to be stable and less reliant on subsidies. For a landlord willing to invest in property upgrades, the potential to command rents near the FMR is significant. However, for those looking to manage properties with minimal intervention, the current market rent is already below the FMR, providing a comfortable margin for operations.
In summary, ZIP 55345 offers a stable tenant base and the potential for higher rental income through strategic investments. Landlords and small-portfolio investors should consider the local market dynamics carefully before deciding on their investment approach.
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.