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 | $850 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,690 |
| 4 Bedrooms | $2,040 |
| 5 Bedrooms | $2,366 |
| 6 Bedrooms | $2,650 |
| 7 Bedrooms | $2,862 |
| 8 Bedrooms | $3,005 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,220 | $217,076 | 0.56% | F |
| 3BR | $1,690 | $226,129 | 0.75% | D |
| 4BR | $2,040 | $259,058 | 0.79% | D |
U.S. Census Bureau data (2024)
The analysis of ZIP 55805, located in Duluth, MN, within the Duluth, MN-WI MSA metro area, reveals several key insights for landlords and small-portfolio investors.
Firstly, the rent math does not work in favor of Section 8 tenants. The Fair Market Rent (FMR) for ZIP 55805 in fiscal year 2024 is set at $1160, which is significantly below the market rent of $1482 (ZORI). This means that landlords accepting Section 8 tenants would be receiving less than the market rate for their properties, resulting in a financial shortfall.
Secondly, acquisition affordability is mixed. The median home value in ZIP 55805 is $216,184, which could be seen as relatively affordable compared to other markets. However, the lack of data on days on market (DOM) and the percentage of homes that have been listed with a price cut (price-cut share) makes it difficult to assess how competitive the market is for acquiring properties. Without these metrics, it's challenging to determine if the median home value reflects a stable or fluctuating market condition.
Lastly, there is strong tenant demand in ZIP 55805. With a total population of 10,602 and a renter share of 72.7%, the majority of residents are looking for rental housing. This high demand suggests that finding tenants should not be an issue, but the challenge will lie in balancing the lower Section 8 rents against the higher market rents.
Verdict: ZIP 55805 presents a viable opportunity for landlords who are willing to accept a slightly lower rental income through Section 8 programs, given the robust tenant demand. However, for those aiming to maximize returns, the discrepancy between the FMR and ZORI indicates that focusing on market-rate rentals would be more profitable. The median home value suggests potential for property acquisition, though further investigation into market dynamics is recommended due to missing data on DOM and price-cut shares.
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.