Location: Pine County, MN | Metro: Pine County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $850 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,340 |
| 4 Bedrooms | $1,530 |
| 5 Bedrooms | $1,775 |
| 6 Bedrooms | $1,988 |
| 7 Bedrooms | $2,147 |
| 8 Bedrooms | $2,254 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 55712 reveals a distinct difference between the federal market rent (FMR) for a two-bedroom apartment under Section 8 and the prevailing market rent. The annualized FMR for a two-bedroom unit in this area is $1,090, based on the fiscal year 2026 metro data. This translates into an annual rental income of $13,080. In contrast, the Census ACS indicates a market rent of $663 per month, resulting in an annual rental income of $7,956.
To derive the gross yield, we use the median home value of $220,770. With the Section 8 FMR, the gross yield is calculated as follows:
$13,080 / $220,770 = 0.0592 or 5.92%
Using the market rent figure, the gross yield is:
$7,956 / $220,770 = 0.0361 or 3.61%
The gross yield under Section 8 is significantly higher at 5.92%, compared to the market rent scenario yielding 3.61%. However, the decision on which scenario is more realistic must consider the local rental market conditions and the demand for subsidized housing. ZIP 55712 has a renter density of 3.4%, which suggests a relatively low concentration of renters. Given this low density, it is important to assess the likelihood of finding eligible tenants for Section 8 who can sustain the higher rent level.
The N/A-day DOM (days on market) indicates incomplete data, possibly due to the limited number of rental properties listed or the low turnover rate in this area. This lack of information makes it challenging to predict how quickly a property might be rented out under either scenario. Nonetheless, the higher gross yield under Section 8 provides a more attractive financial proposition for landlords and small-portfolio investors, assuming they can secure and retain eligible tenants.
In conclusion, while the Section 8 program offers a higher gross yield of 5.92%, the actual performance will depend on the ability to find and maintain tenants within the program. The lower gross yield of 3.61% from market rents is more conservative but does not leverage the potential benefits of the Section 8 program. Investors should weigh these factors carefully when deciding on their investment strategy in ZIP 55712.
Data Sources: FMR data from HUD (2027). 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.