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 | $177,302 | 0.63% | D |
| 3BR | $1,530 | $212,977 | 0.72% | D |
| 4BR | $1,870 | $237,117 | 0.79% | D |
U.S. Census Bureau data (2024)
The potential risks for landlords investing in ZIP code 55741 in Minnesota through the Section 8 program are significant and should be carefully considered. Firstly, tenant turnover is a critical issue, with market rents at $819 being notably lower than the Fair Market Rent (FMR) of $980 for fiscal year 2024. This disparity can lead to higher turnover rates as tenants seek properties that match their budget, which is typically aligned with market rents rather than FMRs.
Vacancy exposure is another concern. The Days on Market (DOM) for rental properties in this area is currently unavailable, indicating a lack of data on how quickly units are filled. In areas with high competition or where market rents are below FMRs, vacancy periods can be extended, leading to lost income for landlords.
Deferred maintenance is also a risk, especially when considering the typical home value of $176,061 and the median income of $69,545. Landlords may find themselves responsible for maintaining properties without adequate financial resources to cover unexpected repairs or renovations. This situation can be exacerbated by the limited income of residents, who might not have the means to contribute to maintenance costs or pay for damages beyond normal wear and tear.
However, these risks must be weighed against the high concentration of renters in the area. With 14.3% of the population being renters, there is a strong likelihood of a high demand for Section 8 vouchers. High renter density generally translates into a larger pool of potential tenants, which can help mitigate the risks associated with vacancy and turnover. Additionally, the presence of a substantial number of voucher holders can provide a steady stream of qualified tenants willing to pay the FMR, thus stabilizing rental income.
In conclusion, despite the challenges posed by tenant turnover, vacancy exposure, and deferred maintenance, the high renter density in ZIP code 55741 suggests a moderate risk for first-time Section 8 landlords. The key to success lies in understanding the local market dynamics and having a solid plan to manage property maintenance and tenant relations effectively.
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.