Location: Minneapolis-St. Paul-Bloomington, MN | Metro: Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,310 |
| 1 Bedroom | $1,470 |
| 2 Bedrooms | $1,790 |
| 3 Bedrooms | $2,340 |
| 4 Bedrooms | $2,620 |
| 5 Bedrooms | $3,039 |
| 6 Bedrooms | $3,404 |
| 7 Bedrooms | $3,676 |
| 8 Bedrooms | $3,860 |
The analysis of the Section 8 cap rate for ZIP code 55458 in Unknown, MN, requires a closer look at the Fair Market Rent (FMR) and the median home value. For fiscal year 2024, the FMR for a two-bedroom apartment in ZIP 55458 is set at $1670 per month. However, the median home value and the market rent for this area are not available, which complicates the direct comparison.
To derive the implied gross yield, we first need to annualize the FMR. This means that for a two-bedroom property, the annual rental income would be $20,040 ($1670 x 12 months).
In the absence of a median home value, let's consider a hypothetical scenario where the median home value is $250,000. The implied gross yield based on the FMR would then be approximately 8.02%. This calculation is derived by dividing the annual rental income by the median home value: $20,040 / $250,000 = 0.08016, or 8.02%.
Given that the market rent is also not available, it's impossible to provide an exact gross yield for the market scenario. However, if the market rent were higher than the FMR, the gross yield would be greater than 8.02%, assuming the median home value remains constant. Conversely, if the market rent were lower, the gross yield would be less.
The lack of specific data on median home value and market rent makes it challenging to determine which scenario is more realistic. Additionally, without the percentage of renter density and the days on market (DOM), it's difficult to assess how likely it is for a property in ZIP 55458 to be rented under the Section 8 program versus being rented at market rates.
Investors should note that the gross yield comparison is concrete only when all necessary data points are available. In this case, the 8.02% gross yield based on the FMR provides a baseline for investment consideration. To make informed decisions, further research into local real estate trends and specific property valuations is recommended.
Data Sources: FMR data from HUD (2027).
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.