Location: Pipestone County, MN | Metro: Lincoln County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $810 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,390 |
| 4 Bedrooms | $1,690 |
| 5 Bedrooms | $1,960 |
| 6 Bedrooms | $2,195 |
| 7 Bedrooms | $2,371 |
| 8 Bedrooms | $2,490 |
U.S. Census Bureau data (2024)
ZIP 56170, located in Pipestone County, MN metro, serves as a cash-flow anchor within a Section 8 portfolio strategy. The Federal Market Rent (FMR) for the area is set at $1,130 for fiscal year 2026, while the market rent stands at $792. This creates a significant spread of $338 per unit, indicating that properties in ZIP 56170 can generate higher rental income through Section 8 than what the market would typically offer.
The median home value in this ZIP code is $191,481. This relatively low median home value makes it easier for landlords to acquire properties within their budget, thereby maximizing the potential for positive cash flow. With the FMR being notably higher than the market rent, landlords can secure a steady and reliable source of income that exceeds the local average, providing a solid foundation for their investment portfolio.
ZIP 56170 is not an appreciation play due to the lack of significant growth in property values. The data does not indicate any percentage increase in property values or changes in the price-cut share or days on market (DOM), which are key indicators for appreciation plays. Therefore, focusing on capital appreciation as a primary strategy in this ZIP code would not be advisable.
While the ZIP code could serve as a diversifier, with a 15.4% renter share and a median income of $58,750, the strong cash-flow potential outweighs its utility as a diversification tool. Diversifiers are typically chosen to balance out a portfolio with varying risk profiles, but given the substantial positive cash flow opportunity, ZIP 56170 is better positioned as a cash-flow anchor.
In conclusion, ZIP 56170 should be considered a cash-flow anchor in a Section 8 portfolio strategy. Its favorable spread between FMR and market rent, coupled with the reasonable median home value, ensures a stable and above-average income stream for landlords. This makes it an ideal choice for those seeking consistent returns rather than speculative growth.
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.