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 | $1,160 |
| 1 Bedroom | $1,310 |
| 2 Bedrooms | $1,590 |
| 3 Bedrooms | $2,080 |
| 4 Bedrooms | $2,330 |
| 5 Bedrooms | $2,703 |
| 6 Bedrooms | $3,027 |
| 7 Bedrooms | $3,269 |
| 8 Bedrooms | $3,432 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,310 | $182,122 | 0.72% | D |
| 2BR | $1,590 | $293,166 | 0.54% | F |
| 3BR | $2,080 | $337,700 | 0.62% | D |
| 4BR | $2,330 | $378,641 | 0.62% | D |
| 5BR | $2,703 | $411,126 | 0.66% | D |
U.S. Census Bureau data (2024)
The ZIP code 55420 in Bloomington, MN, presents an interesting balance between yield and stability for real estate investors. On the yield axis, the Fair Market Rent (FMR) for a one-bedroom apartment is set at $1,540 for fiscal year 2024, compared to the average market rent of $1,183. This indicates that properties in this area can potentially be leased at a higher rate than the market average, providing a premium rental income opportunity. Additionally, the median home value stands at $333,315, which suggests a moderate investment cost relative to the rental yields.
On the stability axis, the data reveals that 33.0% of residents are renters, indicating a sizeable but not overwhelming rental market. The median household income is $82,170, which is above the national average, suggesting that tenants have a higher likelihood of maintaining consistent rental payments. However, the lack of available data on days on market (DOM) makes it challenging to assess the speed at which properties can be rented out, which could affect cash flow predictability.
Given these figures, ZIP 55420 leans towards being a steady-cashflow zone rather than a high-yield/low-stability flip-style market. The FMR exceeding the market rent by $357 per month for a one-bedroom unit implies a solid potential for higher returns when renting at the FMR. At the same time, the relatively high median income supports the stability of rental payments, reducing the risk of vacancies and delinquencies. While the rental market share is significant, it does not reach the levels typically associated with high instability, such as those found in areas with over 50% of the population as renters.
To summarize, the combination of a higher-than-market rental yield supported by a moderate rental market share and strong income levels positions ZIP 55420 as a reliable investment option for those seeking stable cash flows with above-average returns. Landlords and small-portfolio investors should find this environment conducive to long-term, sustainable property management.
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.