Location: Swift County, MN | Metro: Big Stone County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,380 |
| 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)
The analysis of the Section 8 cap-rate scenario for ZIP code 56208 reveals an interesting picture when comparing the Federal Market Rent (FMR) and the market rent figures. The annualized FMR for a 2-bedroom apartment in ZIP 56208 for fiscal year 2026 is set at $970 per month, while the Census ACS data indicates a market rent of $752 per month.
To derive the gross yield, we can calculate the implied yields based on these rents. Using the median home value of $136,780:
The higher gross yield under the Section 8 FMR scenario suggests a more attractive investment opportunity compared to the market rent scenario. However, the choice between these two scenarios should consider additional factors such as the local rental market conditions and the demand for Section 8 properties.
Given the renter density of 23.6%, it's important to note that this figure represents the percentage of households that rent their homes rather than owning them. A lower renter density might imply a smaller pool of potential tenants, which could affect the occupancy rates and the stability of rental income over time.
The N/A-day DOM (Days on Market) indicates that there is insufficient data to determine how quickly properties are rented out in this area. This lack of information makes it difficult to predict the speed at which a property might be occupied once listed, adding some uncertainty to the investment decision.
In conclusion, the Section 8 FMR scenario offers a higher gross yield of 8.5% versus the market rent scenario's 6.6%. However, investors must weigh this against the local rental market dynamics and the availability of Section 8 tenants in ZIP 56208. Given the limited data on DOM, the market rent scenario might be considered more conservative and realistic, especially if the investor aims for steady, long-term cash flows rather than maximizing initial gross yield.
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.