Location: McLeod County, 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 | $1,120 |
| 1 Bedroom | $1,270 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,540 | $241,779 | 0.64% | D |
| 3BR | $2,040 | $286,173 | 0.71% | D |
| 4BR | $2,280 | $336,397 | 0.68% | D |
U.S. Census Bureau data (2024)
The rent math in ZIP code 55381, located in Silver Lake, MN, within the McLeod County, MN metro area, does not work favorably for landlords. The Federal Market Rent (FMR) for the fiscal year 2024 is set at $1430, which is significantly higher than the market rent of $851 reported by the Census ACS. This discrepancy means that properties in this area would struggle to attract tenants relying solely on Section 8 vouchers, as the voucher amount is below the market rate.
Acquisition of homes in this ZIP code is relatively affordable, with a median home value of $302,264. However, the lack of data on days on market (DOM) and the percentage of homes needing price cuts indicates that the market is either stable or underreported, making it difficult to assess the ease of acquiring properties at a good price point.
Tenant demand in ZIP 55381 is limited. With a total population of 1,819 and only a 12.0% renter share, there are fewer potential tenants compared to areas with higher rental populations. This low demand could lead to challenges in filling vacancies, especially if landlords rely on market rents rather than lower Section 8 rates.
Verdict: While the median home value in ZIP 55381 suggests an affordable entry point for acquisition, the mismatch between the market rent and the FMR, coupled with the limited tenant demand, makes this area less attractive for landlords and small-portfolio investors seeking stable income through Section 8 properties. The financial viability of such investments is questionable given the low renter share and the disparity in rental pricing.
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.