Location: Watonwan County, MN | Metro: Martin County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $750 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,400 |
| 5 Bedrooms | $1,624 |
| 6 Bedrooms | $1,819 |
| 7 Bedrooms | $1,965 |
| 8 Bedrooms | $2,063 |
U.S. Census Bureau data (2024)
ZIP 56162, located in Watonwan County, MN metro, serves as a strong cash-flow anchor within a Section 8 portfolio strategy. This designation is based on the favorable financial metrics that support long-term stability and profitability.
The Federal Market Rent (FMR) for a $1,000 metro area in fiscal year 2026 stands at $1,000, while the market rent in ZIP 56162 is significantly higher at $1,292. This means that properties in this ZIP code can be rented out at a rate above the FMR, ensuring a steady stream of income that exceeds the government-subsidized rates. The spread between the FMR and the market rent indicates a robust potential for cash flow, which is critical for maintaining the financial health of a Section 8 portfolio.
Furthermore, the median home value in ZIP 56162 is $252,159. This figure suggests that the real estate market in this area is stable and not prone to rapid fluctuations, which is beneficial for landlords and small-portfolio investors who rely on consistent rental incomes. A stable median home value also reduces the risk of sudden drops in property values, which could negatively impact the overall portfolio performance.
ZIP 56162 does not present itself as an appreciation play due to the lack of data on price-cut shares and days on market (DOM). However, its role as a cash-flow anchor is clear and well-supported by the available data. It is not primarily a diversifier either, given the low percentage of renter share (15.7%) and median income ($88,625), which do not indicate a high demand for rental properties or a broad range of income levels among residents.
In conclusion, ZIP 56162 should be considered a cash-flow anchor in a Section 8 portfolio strategy. Its ability to generate rents above the FMR, combined with a stable median home value, makes it a reliable component of any investment plan aimed at maximizing long-term financial returns through consistent rental income.
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.