Location: Nobles County, MN | Metro: Cottonwood County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,260 |
| 4 Bedrooms | $1,440 |
| 5 Bedrooms | $1,670 |
| 6 Bedrooms | $1,870 |
| 7 Bedrooms | $2,020 |
| 8 Bedrooms | $2,121 |
U.S. Census Bureau data (2024)
The analysis of ZIP code 56131 in Nobles County, MN, reveals several key points for landlords and small-portfolio investors considering the area.
The first question is whether the rent math works. The Fair Market Rent (FMR) for the metro area in fiscal year 2026 is set at $1,000. However, the current market rent, based on Census ACS data, stands at $831. This discrepancy means that landlords relying solely on Section 8 vouchers will find themselves below the market rate, potentially reducing profitability unless they can secure higher-paying tenants or subsidies.
Secondly, the acquisition cost must be considered. With a median home value of $229,742, the cost of entry into the market is relatively low compared to many other areas. Unfortunately, the data does not provide the days on market (DOM) or the percentage of homes that required price cuts, which would have helped assess how competitive the real estate market is. Despite this lack of detail, the low median home value suggests affordability for acquisition, making it an attractive option for those looking to enter the market with limited capital.
Lastly, there's the matter of tenant demand. The ZIP code has a total population of 2,238, with 17.6% being renters. This indicates a smaller pool of potential tenants compared to more densely populated areas. The demand for rental properties might be lower, but it also means less competition among landlords, which could stabilize rental prices.
Verdict: ZIP 56131 offers a mix of pros and cons for real estate investment. While the acquisition cost is affordable at $229,742, the gap between the FMR of $1,000 and the actual market rent of $831 poses a challenge for profitability. The tenant demand is modest, given the small population and low renter share. Overall, the area could be suitable for investors seeking a stable, low-cost entry point, but they should be prepared for potentially lower returns and carefully evaluate the local housing dynamics before proceeding.
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.