Location: Mower County, MN | Metro: Rochester, MN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,010 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,430 |
| 3 Bedrooms | $1,830 |
| 4 Bedrooms | $2,130 |
| 5 Bedrooms | $2,471 |
| 6 Bedrooms | $2,768 |
| 7 Bedrooms | $2,989 |
| 8 Bedrooms | $3,138 |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1550 for ZIP code 55973 in fiscal year 2024 will adequately cover the mortgage on a home valued at $308,490. To address this, let's break down the numbers. Assuming a standard 30-year fixed-rate mortgage at an average interest rate of around 4.5%, the monthly payment on a $308,490 home would be approximately $1550. This means that the FMR is designed to align closely with the typical mortgage payment, providing a solid foundation for covering mortgage costs through rental income.
The second objection could be centered around the perceived low renter demand in the area, indicated by the 8.1% vacancy rate. While this rate does suggest a modest level of competition among landlords, it also reflects a stable market. A vacancy rate of 8.1% is within the range considered healthy by real estate experts, ensuring a steady flow of potential tenants. However, the data provided does not offer detailed insights into the number of renters in the area or the historical trends of occupancy rates, which would be crucial for a comprehensive assessment of demand.
A final concern might revolve around the ability of Housing Choice Vouchers to keep up with market rents. Unfortunately, the data does not provide specific information on voucher amounts or how they compare to the $1550 FMR. The lack of direct comparison between voucher values and actual market rents makes it challenging to definitively state whether vouchers will sufficiently cover the cost of renting properties at the FMR. For a more accurate analysis, one would need to consult local housing authorities or recent reports on voucher utilization rates in the area.
In summary, while the FMR appears to be aligned with the expected mortgage payments for a home in ZIP 55973, the data on renter demand and voucher adequacy is limited. Landlords and small-portfolio investors should consider these factors carefully and seek additional localized data to make informed decisions.
Data Sources: FMR data from HUD (2027). 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.