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: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,110 | $198,446 | 0.56% | F |
| 3BR | $1,530 | $244,050 | 0.63% | D |
U.S. Census Bureau data (2024)
The ZIP code 55732, located in Embarrass, MN, presents an interesting case for real estate analysis, particularly for those interested in Section 8 investments. The Fair Market Rent (FMR) for the fiscal year 2024 is set at $1,260, which is notably higher than the market rent of $1,188. This indicates a potential for higher yields when participating in the Section 8 program, as landlords can receive a subsidy that brings the rent up to the FMR level. Given the median home value of $195,756, the rental income, especially through the Section 8 program, represents a significant percentage of the property's value, making it a potentially attractive investment.
However, the stability of the market must also be considered. The rental vacancy rate stands at 4.0%, which is relatively low, suggesting a competitive environment for finding tenants. While this could be seen as positive for maintaining occupancy, the lack of data on days on market (DOM) for vacant properties indicates some uncertainty about how quickly units might turn over. Additionally, the median household income in the area is $64,750, which is below the national average and could affect the financial stability of potential tenants.
Based on these figures, ZIP 55732 leans towards being a high-yield/low-stability market. The higher FMR compared to market rent suggests a good opportunity for maximizing returns through Section 8 subsidies. However, the low median income and limited data on turnover rates point to a less stable tenant pool. For landlords and small-portfolio investors, this market requires careful consideration of risk versus reward. It is advisable to focus on properties that can be managed efficiently to minimize downtime and ensure a steady cash flow despite the volatility.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.