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 | $1,120 |
| 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 |
|---|---|---|---|---|
| 1BR | $1,270 | $113,320 | 1.12% | B |
| 2BR | $1,540 | $155,466 | 0.99% | C |
U.S. Census Bureau data (2024)
The rent math in ZIP code 55454, located in Minneapolis, MN, within the Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR area, does not favor landlords. The Fair Market Rent (FMR) set at $1270 for fiscal year 2024 is significantly below the market rent of $1,691, as indicated by the Zillow Observed Rent Index (ZORI). This discrepancy means that landlords would be undercharging by approximately $421 per month if they adhered strictly to the FMR guidelines.
Acquisition in this ZIP code is relatively affordable, with a median home value of $159,973. However, the lack of data on days on market (DOM) and the low percentage of homes requiring price cuts (0.2%) suggest that the housing market might be tight, making it harder for new investors to find deals. Despite the affordability, the limited availability of distressed properties could pose challenges for those looking to acquire properties at a discount.
Tenant demand is strong in ZIP 55454, with a total population of 8,880 and a renter share of 91.8%. This high proportion of renters indicates a robust market for rental properties, which can help ensure occupancy rates remain high. Landlords can leverage this demand to maintain a steady stream of tenants.
In summary, while the rent math in ZIP 55454 does not work in favor of landlords due to the significant gap between FMR and market rent, the acquisition cost remains reasonable. Strong tenant demand provides a solid foundation for rental income, but investors must be prepared to charge above the FMR to achieve profitability. Given these factors, investment in this ZIP code should focus on maximizing efficiency and minimizing costs to offset the lower rents relative to market values.
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.