Location: Steele County, 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: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,270 | $248,124 | 0.51% | F |
| 3BR | $1,770 | $279,288 | 0.63% | D |
| 4BR | $2,130 | $330,285 | 0.64% | D |
U.S. Census Bureau data (2024)
The classification of ZIP code 55985, located in West Concord, MN, hinges on its yield and stability metrics. The Fair Market Rent (FMR) for the fiscal year 2024 is set at $1,160. This figure represents the maximum monthly rent that a landlord can charge for a property under the Section 8 program. In contrast, the local market rent stands at $799, indicating a significant premium for Section 8 properties.
When considering the home value of $274,462, the potential rental income under Section 8 becomes a critical factor. The FMR provides a higher yield compared to the market rate, suggesting a favorable scenario for landlords seeking to maximize their returns through government subsidies.
Stability, however, is another key aspect. With only 11.7% of residents being renters, the demand for rental properties, particularly those eligible for Section 8, might be limited. The average household income in the area is $83,636, which could imply a higher proportion of homeowners due to the affordability of purchasing over renting. The lack of data on days on market (DOM) further complicates the assessment of stability but suggests a potentially slower turnover rate for rental properties.
Given these figures, ZIP 55985 does not align perfectly with either a high-yield/low-stability flip-style market or a steady-cashflow zone. Instead, it represents a middle ground where the yield is relatively high due to the disparity between FMR and market rent, yet the stability is compromised by the low percentage of renters and the absence of DOM data. Landlords and small-portfolio investors should proceed with caution, leveraging the higher rental rates while being mindful of the potential challenges in finding and retaining tenants.
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.