Location: Le Sueur County, MN | Metro: Mankato, MN MSA
| 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 |
U.S. Census Bureau data (2024)
The median income in ZIP code 56050 stands at $90,000, which provides a solid financial foundation for households considering rental options. However, when examining the market rate for rentals, which is $694 according to the Census ACS, it becomes apparent that the cost of housing is relatively low compared to the average household income. This suggests that most residents can comfortably afford market-rate rents without significant strain on their budgets.
Contrastingly, the Fair Market Rent (FMR) standard set by vouchers for ZIP 56050 in fiscal year 2024 is $960. This represents a substantial increase over the market rate, making voucher-assisted tenants potentially more attractive to landlords. The difference between the market rate ($694) and the voucher payment ($960) highlights an affordability gap where voucher recipients can access housing that would otherwise be out of reach based on market rates.
With only 13.2% of the 1,306 population being renters, competition among landlords is likely to be fierce for the limited number of rental units. Landlords who accept Section 8 vouchers can benefit from a more stable source of income and a guaranteed tenant base, as voucher holders have a financial safety net that reduces the risk of non-payment. On the other hand, landlords who focus on cash-paying tenants might face challenges in finding enough qualified renters given the small percentage of the population that seeks rentals.
The takeaway for landlords is clear: accepting Section 8 vouchers can provide a competitive advantage in a market with limited demand. Voucher payments exceed the market rate by $266 per month, ensuring a higher return on investment and potentially reducing vacancy rates. For small-portfolio investors, diversifying their tenant mix to include both voucher and cash-paying renters can help stabilize cash flow and mitigate risks associated with rental vacancies.
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.