Location: Rochester, MN | Metro: Rochester, MN HUD Metro FMR Area
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 | $1,010 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,270 |
| 3 Bedrooms | $1,770 |
| 4 Bedrooms | $2,130 |
| 5 Bedrooms | $2,471 |
| 6 Bedrooms | $2,768 |
| 7 Bedrooms | $2,989 |
| 8 Bedrooms | $3,138 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,270 | $319,845 | 0.4% | F |
| 3BR | $1,770 | $359,967 | 0.49% | F |
| 4BR | $2,130 | $448,660 | 0.47% | F |
| 5BR | $2,471 | $588,421 | 0.42% | F |
U.S. Census Bureau data (2024)
The ZIP code 55920, located in Byron, Minnesota, presents a unique opportunity for real estate investors when considering both yield and stability.
On the yield axis, the Fair Market Rent (FMR) for the fiscal year 2024 is set at $1,120, which is slightly below the market rent of $1,138. This indicates that the area is competitive, but there is a small margin for profit without exceeding the FMR limits. The median home value of $398,315 suggests that the investment cost is moderate, making it feasible for small-portfolio investors to enter the market. However, the relatively low rent-to-home-value ratio means that the yield is not exceptionally high compared to other markets where rents might be closer to the home values.
Moving to the stability axis, the rental market shows some signs of volatility. With only 14.4% of the population being renters, the demand for rental properties is limited. This figure alone points towards a less stable rental environment. Additionally, the lack of data on days on market (DOM) could indicate that the rental turnover rate is unpredictable, adding another layer of uncertainty. On a positive note, the median household income of $131,336 suggests that tenants who do rent in this area are likely to have a higher ability to pay rent on time, potentially offsetting some of the volatility concerns.
Based on these figures, ZIP 55920 does not fit neatly into either a high-yield/low-stability flip-style market or a steady-cashflow zone. Instead, it represents a middle-ground scenario where the potential for high returns is somewhat constrained by the limited rental demand and moderate home values. Investors seeking a balance between yield and stability should carefully weigh these factors before entering the market.
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.