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 | $211,258 | 0.53% | F |
| 3BR | $1,530 | $265,691 | 0.58% | F |
U.S. Census Bureau data (2024)
ZIP code 55751, located in Iron, MN, is characterized by a small, tight-knit community with a total population of 1,388 residents. Only 5.2% of these residents are renters, indicating a predominantly owner-occupied neighborhood. The median household income here stands at $75,200, reflecting a middle-class area where most residents can afford homeownership. The median home value in ZIP 55751 is $227,778, which suggests that homes are moderately priced compared to the broader Minnesota market.
The economic landscape for rental properties in ZIP 55751 is particularly interesting when considering the Federal Market Rent (FMR) versus the actual market rent. The FMR for the zip code in fiscal year 2024 is set at $1,040, while the Census American Community Survey (ACS) indicates an average market rent of only $700. This discrepancy means that landlords who participate in the Section 8 program could see an increase in their rental income, making it a potentially attractive option for hands-off voucher operators looking to secure steady, government-backed rental payments.
However, the lower market rent also implies that there might be limited demand for higher rents, even those subsidized by the Section 8 program. For a hands-on value-add buyer, the challenge would be to identify properties that offer opportunities to improve and justify higher rents closer to the FMR without alienating potential tenants. Given the low percentage of renters and the moderate income levels, such a strategy would require careful consideration of property enhancements and tenant selection to ensure success.
In summary, ZIP 55751 offers a unique opportunity for Section 8 investors due to its modest size, income levels, and the gap between FMR and market rent. While hands-off operators may find security in the guaranteed rental payments, hands-on buyers must approach with a strategic plan to add value and attract tenants willing to pay closer to the FMR.
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.