Location: Duluth, MN | Metro: Duluth, MN-WI MSA
| 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 |
U.S. Census Bureau data (2024)
The analysis of ZIP code 55718, located within the Duluth, MN-WI MSA metro, reveals several key points that are crucial for landlords and small-portfolio investors.
First, let's address whether the rent math works. The Fair Market Rent (FMR) for ZIP 55718 in fiscal year 2024 is set at $990. This figure is slightly higher than the market rent reported by the Census ACS, which stands at $955. While the FMR provides a benchmark, the actual market rent is lower, indicating that landlords may need to adjust their expectations and possibly offer competitive incentives to attract tenants.
Second, regarding the affordability of acquisition, the median home value in ZIP 55718 is $329,035. However, due to the lack of data on days on market (DOM) and the percentage of homes that have experienced price cuts, it's challenging to provide a comprehensive assessment of how quickly properties can be sold and at what discount. Investors should consider this uncertainty when evaluating the potential for resale or flipping properties in this area.
Third, we must examine tenant demand. With a total population of 3,111, only 12.9% of residents are renters. This low renter share suggests limited demand for rental properties, which could impact occupancy rates and potentially lead to longer vacancies. Landlords might need to focus on retaining tenants through quality maintenance and reasonable rent increases.
In summary, while the rent math is close to working, with FMR slightly above market rent, the overall picture for ZIP 55718 is less favorable for real estate investment. The median home value is high, and without clear indicators of the local housing market's liquidity, acquiring properties may not be as straightforward. Furthermore, the low renter share poses a challenge for sustaining tenant demand. These factors collectively suggest that investors should proceed with caution and carefully weigh the risks against the potential returns.
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.