Location: Duluth, MN | Metro: Duluth, MN-WI MSA
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 | $770 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,870 |
| 5 Bedrooms | $2,169 |
| 6 Bedrooms | $2,429 |
| 7 Bedrooms | $2,623 |
| 8 Bedrooms | $2,754 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,110 | $150,836 | 0.74% | D |
| 3BR | $1,530 | $184,871 | 0.83% | C |
| 4BR | $1,870 | $220,501 | 0.85% | C |
U.S. Census Bureau data (2024)
The rent math in ZIP 55705 does not work favorably for landlords. The Fair Market Rent (FMR) set at $980 for the fiscal year 2024 contrasts sharply with the actual market rent of $507 based on Census ACS data. This discrepancy suggests that landlords might struggle to find tenants willing to pay the higher FMR rates, leading to potential vacancies.
Acquisition costs in ZIP 55705 are relatively low, with a median home value of $153,652. However, the lack of data on days on market (DOM) and the percentage of homes needing price cuts indicates that the local real estate market's dynamics are unclear. Landlords should proceed cautiously when considering property purchases, as these missing metrics could signal either a stable or a volatile market situation.
Tenant demand in ZIP 55705 is modest. With a total population of 3,211, only 12.7% are renters. This implies a limited pool of potential tenants, which could make it challenging to fill rental properties quickly. Given the small number of renters, competition among landlords for available tenants will likely be intense.
In summary, ZIP 55705 presents a challenging environment for landlords due to the significant gap between FMR and market rent, suggesting difficulty in attracting tenants at higher rates. Acquisition costs are affordable, but the lack of specific market indicators makes investment risk assessment difficult. Tenant demand is low, indicating a competitive landscape for filling rental units. Overall, the area is not recommended for new investments without further due diligence into local rental trends and economic factors.
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.