Location: Redwood County, MN | Metro: Brown County, MN
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 | $710 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,210 |
| 4 Bedrooms | $1,630 |
| 5 Bedrooms | $1,891 |
| 6 Bedrooms | $2,118 |
| 7 Bedrooms | $2,287 |
| 8 Bedrooms | $2,401 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,010 | $194,769 | 0.52% | F |
| 3BR | $1,210 | $227,763 | 0.53% | F |
| 4BR | $1,630 | $280,490 | 0.58% | F |
| 5BR | $1,891 | $354,625 | 0.53% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 56085 in Minnesota reveals a unique balance between yield and stability that positions it as a moderate-risk investment opportunity for landlords and small-portfolio investors. The Fair Market Rent (FMR) for the metro area in fiscal year 2026 is set at $970, which is notably higher than the local market rate of $784. This suggests a potential upside for rental yields if properties can be leased at the higher metro rate.
The median home value of $256,702 provides a solid base for investment, indicating a relatively stable housing market. However, the low percentage of renters at 17.3% could signal challenges in finding tenants, especially given the lack of data on days on market (DOM), which would typically help gauge how quickly properties are rented out.
The average household income of $73,000 offers insight into the financial capacity of potential tenants, but without a direct comparison to the rent-to-income ratio, it's difficult to quantify this impact precisely. Nevertheless, the income figure supports the feasibility of charging closer to the FMR without significantly deterring tenants.
To summarize, ZIP 56085 leans towards a moderate-stability, moderate-yield market. While the potential for higher rental yields exists due to the disparity between the metro FMR and the local market rate, the relatively low renter population poses a risk to consistent cash flow. For investors looking to capitalize on higher rents while accepting some level of tenant turnover risk, this area presents a viable option.
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.