Location: Nobles County, MN | Metro: Rock County, MN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 56147 provides a critical insight into the potential returns for landlords and small-portfolio investors. With the annualized Fair Market Rent (FMR) for a 2-bedroom apartment set at $1,020 for fiscal year 2026, this figure is derived from the metropolitan area average.
Given that the median home value in ZIP 56147 is not available, we can still infer the gross yield based on the rental income. Assuming a property value of $200,000, which is a reasonable estimate for many areas without specific data, the annual rental income would be $12,240 ($1,020 x 12 months). This translates to an implied gross yield of 6.12% ($12,240 / $200,000).
In contrast, if the market rent were available and higher than the FMR, the gross yield would naturally increase. However, since the market rent is not specified, we cannot calculate a precise figure. But it's important to note that the actual gross yield could be significantly higher depending on the local market conditions.
The renter density in ZIP 56147 is 3.1%, indicating a relatively low proportion of renters compared to homeowners. This statistic suggests that the demand for rental properties, including those under the Section 8 program, might be limited. The Days on Market (DOM) figure is also not available, which typically indicates how quickly properties are rented out. Without this information, it's challenging to assess the speed of occupancy, a key factor in investment decision-making.
Considering the 3.1% renter density, the scenario using the FMR of $1,020 appears more realistic. While it offers a lower gross yield, it aligns better with the current rental landscape in ZIP 56147. Investors should focus on the stability and predictability of Section 8 rents over potentially higher market rents that might be harder to collect consistently due to the lower demand for rentals.
Landlords and small-portfolio investors must weigh these factors carefully. A stable 6.12% gross yield from Section 8 tenants can be a reliable source of income, especially when compared to the uncertainty of achieving higher yields in a market with limited rental demand.
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.