Location: Freeborn County, MN | Metro: Faribault County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $930 |
| 1 Bedroom | $1,130 |
| 2 Bedrooms | $1,340 |
| 3 Bedrooms | $1,830 |
| 4 Bedrooms | $1,840 |
| 5 Bedrooms | $2,134 |
| 6 Bedrooms | $2,390 |
| 7 Bedrooms | $2,581 |
| 8 Bedrooms | $2,710 |
U.S. Census Bureau data (2024)
ZIP 56051, located in Freeborn County, MN, can serve as a cash-flow anchor within a Section 8 portfolio strategy. This designation is based on the significant spread between the Fair Market Rent (FMR) set by HUD for the metro area in fiscal year 2026 and the actual market rent in the area. The FMR for ZIP 56051 is $1,380, whereas the current market rent stands at $900. This means that landlords participating in the Section 8 program can expect a guaranteed rental income that exceeds the local market rates, providing a stable and predictable cash flow.
The median home value in ZIP 56051 is $108,013. Given the discrepancy between the FMR and the market rent, landlords can secure a higher income than what they would typically receive in the open market. This makes ZIP 56051 particularly attractive for those seeking to stabilize their rental income streams without the volatility associated with non-subsidized properties.
While there is no specific data provided regarding appreciation potential or days on market (DOM), the current economic indicators suggest that ZIP 56051 is not likely to be an appreciation play due to the lack of significant growth trends in housing prices. Similarly, the diversification aspect is limited by the relatively low renter share of 16.3%, indicating that a majority of residents in the area own their homes rather than renting. Additionally, the median income of $54,286 suggests that while some residents may have difficulty affording market rents, the overall income level supports the viability of the Section 8 program.
In conclusion, ZIP 56051 should be considered as a cash-flow anchor within a Section 8 portfolio strategy. Landlords will benefit from the guaranteed income provided by the government subsidy, which is higher than the prevailing market rent, ensuring a steady and reliable revenue stream.
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.