Location: Waseca 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 | $880 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,470 |
| 4 Bedrooms | $1,730 |
| 5 Bedrooms | $2,007 |
| 6 Bedrooms | $2,248 |
| 7 Bedrooms | $2,428 |
| 8 Bedrooms | $2,549 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,060 | $262,209 | 0.4% | F |
| 3BR | $1,470 | $278,181 | 0.53% | F |
| 4BR | $1,730 | $315,836 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 56048, which covers Janesville, Minnesota, presents a significant opportunity for landlords and small-portfolio investors due to the gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 56048 in fiscal year 2024 is set at $960, while the Census ACS data indicates that the average market rent is $871. This means there is an $89 difference, or approximately a 10.2% premium, between what the government will pay and what the typical market rent is.
This gap makes Janesville a prime location for a yield play through Section 8 tenancy. Despite only 12.5% of residents being renters, the median home value stands at $281,893, and the median household income is $85,532. These figures suggest that the local economy can support higher rents, but the market rent remains lower than the FMR. Landlords who accept Section 8 vouchers can benefit from receiving a rate closer to the FMR, which is above the current market rent. This allows them to potentially earn more than they would from a non-voucher tenant, increasing their rental yield and overall profitability.
However, it's important to note that accepting voucher tenants comes with its own set of responsibilities and considerations. While the FMR provides a higher rental rate compared to the current market, landlords must ensure compliance with HUD standards, which can affect the cost of maintaining and improving properties. Additionally, the turnover rate among voucher tenants might be different from that of the general population, impacting long-term investment strategies.
In conclusion, the $89 premium, or 10.2%, that Section 8 offers over the current market rent in Janesville, Minnesota, makes it a favorable option for landlords looking to maximize their returns. Given the local economic conditions, this strategy can enhance profitability without significantly increasing operational costs.
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.