Location: Watonwan County, MN | Metro: Mankato, MN 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 | $880 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,200 |
| 3 Bedrooms | $1,470 |
| 4 Bedrooms | $1,920 |
| 5 Bedrooms | $2,227 |
| 6 Bedrooms | $2,494 |
| 7 Bedrooms | $2,694 |
| 8 Bedrooms | $2,829 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,200 | $187,543 | 0.64% | D |
| 3BR | $1,470 | $277,175 | 0.53% | F |
U.S. Census Bureau data (2024)
10.0% of residents in ZIP 56041 are renters, indicating a moderate demand for rental properties in the area. The Fair Market Rent (FMR) for Section 8 housing in the zip code for fiscal year 2024 is set at $1130, which is higher than the reported market rent of $850 according to the Census ACS data. This suggests that Section 8 vouchers can cover a significant portion of the typical rental costs, making it attractive for landlords who wish to participate in the program. The median home value in ZIP 56041 stands at $318,515, reflecting a stable housing market that could support steady property values for investors. With a median income of $80,833, tenants in the area have a reasonable financial standing, although the exact days on market (DOM) and percentage of price cuts are not available, which would typically provide insight into how quickly properties sell and the competitiveness of the local real estate market.
The discrepancy between the FMR and market rent rates implies that landlords accepting Section 8 vouchers could potentially earn more than they might through traditional market rentals. However, the lack of data on DOM and price-cut shares leaves some uncertainty regarding the speed at which properties can be leased and the level of negotiation involved. Despite these gaps, the overall economic indicators suggest a favorable environment for landlords interested in the Section 8 program, given the higher FMR compared to market rents and the moderate renter population.
Section 8 Verdict: Attractive opportunity due to higher FMR coverage over market rent.
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.