Location: Murray County, MN | Metro: Lyon County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $880 |
| 1 Bedroom | $1,070 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,560 |
| 4 Bedrooms | $1,860 |
| 5 Bedrooms | $2,158 |
| 6 Bedrooms | $2,417 |
| 7 Bedrooms | $2,610 |
| 8 Bedrooms | $2,741 |
U.S. Census Bureau data (2024)
In ZIP code 56132, there are several potential pitfalls for landlords considering Section 8 investments. Firstly, tenant turnover poses a significant challenge, especially when comparing the market rent of $983 to the Federal Market Rent (FMR) of $1,180 for fiscal year 2026. This gap suggests that tenants might be more inclined to move once their financial situation improves, leading to higher churn rates and increased costs associated with finding new tenants.
Vacancy exposure is another critical risk factor. The average Days on Market (DOM) is not available, which makes it difficult to predict how long a property might remain vacant between tenancies. A prolonged vacancy can lead to significant financial losses for landlords who rely on steady rental income.
The deferred-maintenance exposure is also noteworthy. With a typical home value of $320,497 and a median income of $73,750, landlords must be prepared to invest in regular maintenance to keep properties up to standard without expecting immediate returns from rent increases. Section 8 properties require adherence to specific standards to maintain eligibility, which can necessitate ongoing expenditures.
However, these risks are somewhat mitigated by the high concentration of renters in the area. The 7.5% renter share, while seemingly low, is indicative of a strong demand for rental housing, particularly among those who might qualify for Section 8 vouchers. High renter density often translates into robust demand for subsidized housing, ensuring a consistent pool of potential tenants.
Given the analysis above, the verdict for ZIP code 56132 is a moderate risk for a first-time Section 8 landlord. While the risks are present, the strong demand for rental housing provides a buffer against some of the challenges. Landlords should prepare for regular maintenance costs and possible fluctuations in tenant turnover but can expect a stable base of interested applicants due to the high renter density.
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.