Location: Itasca County, 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 | $172,393 | 0.64% | D |
| 3BR | $1,530 | $232,140 | 0.66% | D |
U.S. Census Bureau data (2024)
The potential downsides for investing in Section 8 properties in ZIP code 55736, Floodwood, MN, are significant. Tenant turnover is likely to be higher due to the disparity between the market rent of $690 and the Fair Market Rent (FMR) of $980 for fiscal year 2024. This gap indicates that tenants may struggle to afford the FMR when their vouchers cover only the lower market rent, leading to frequent moves and increased vacancy rates. The vacancy exposure is particularly concerning as the Days on Market (DOM) figure is not available, suggesting an unpredictable rental market. Additionally, the typical home value of $169,054 paired with a median income of $65,179 can lead to deferred maintenance issues, as property owners might find it challenging to keep up with repairs and improvements without a steady stream of higher-paying tenants.
However, these risks must be weighed against the 14.7% renter share in the area. High renter density often translates into higher demand for housing assistance through Section 8 vouchers. This demand can stabilize occupancy rates and provide a consistent source of tenants, mitigating some of the financial uncertainties associated with vacancy and maintenance costs.
Verdict: Moderate risk for a first-time Section 8 landlord.
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.