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 | $134,754 | 0.82% | C |
| 3BR | $1,530 | $137,650 | 1.11% | B |
U.S. Census Bureau data (2024)
The classification of ZIP 55708 (Aurora, MN) on the axes of yield and stability reveals a nuanced investment landscape. On the yield axis, the Federal Market Rent (FMR) for fiscal year 2024 is set at $980, significantly higher than the market rent of $827. This indicates that properties receiving Section 8 assistance can command a premium over market rates, suggesting a potentially high-yield environment.
However, the median home value of $125,573 must be considered when calculating overall returns. The disparity between FMR and market rent suggests that landlords who accept Section 8 tenants could see an above-average cash flow compared to those who do not. For instance, a landlord renting out a property for $980 under Section 8 versus $827 in the open market would generate an additional $153 per month, or $1,836 annually, before accounting for expenses.
Moving to the stability axis, Aurora has a relatively low percentage of renters at 17.5%, which implies a predominantly owner-occupied community. This characteristic generally contributes to lower tenant turnover and higher stability. However, the lack of data on days on market (DOM) and the average income of $66,389 suggest a moderate level of financial stability among residents. While the income figure is lower than the national average, it still provides a reasonable assurance that tenants will be able to meet their obligations.
Given these factors, ZIP 55708 does not fit neatly into a high-yield/low-stability "flip-style" market or a steady-cashflow zone. Instead, it represents a middle ground where the potential for higher yields through Section 8 participation is balanced against moderate levels of stability. The high FMR relative to market rent supports a higher yield scenario, but the low percentage of renters and modest income levels imply a stable tenant base, albeit not exceptionally so.
To summarize, for landlords and small-portfolio investors looking to capitalize on the Section 8 program, Aurora presents an opportunity for enhanced cash flow. Yet, the investment should be approached with an understanding of the local market dynamics, particularly the lower renter population and average incomes, which temper expectations of extremely high yields or rock-solid stability.
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.