Location: Yellow Medicine County, MN | Metro: Lyon County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,680 |
| 5 Bedrooms | $1,949 |
| 6 Bedrooms | $2,183 |
| 7 Bedrooms | $2,358 |
| 8 Bedrooms | $2,476 |
U.S. Census Bureau data (2024)
The classification of ZIP code 56229 hinges on its yield and stability metrics when compared against the Federal Market Rent (FMR) for the metro area in fiscal year 2026, which stands at $970. The market rent in this ZIP code is lower at $756, indicating a potential gap where properties could be rented out at higher rates without exceeding the FMR threshold. This suggests a moderate yield opportunity, as the rental income does not fully capitalize on the maximum allowable rent under Section 8 but offers a decent margin above the actual market rate.
The median home value of $242,744 in ZIP 56229 provides a benchmark for property investment costs. When juxtaposed with the average income of $104,375, it becomes evident that there is sufficient financial capacity among residents to support rental payments at or near the market rate. However, the relatively low percentage of renters at 16.4% signals a primarily owner-occupied community, which can impact the ease of finding tenants and the overall demand for rental properties.
The absence of data regarding the number of days on market (DOM) is a critical gap. This metric is crucial for understanding how quickly properties can be leased, impacting the liquidity and operational efficiency of rental investments. Without this information, it's challenging to assess the stability of rental income flows in ZIP 56229.
Given the available data, ZIP 56229 appears to be a steady-cashflow zone rather than a high-yield/low-stability flip-style market. The moderate difference between the FMR and market rent, coupled with the reasonable income levels, supports a stable rental environment. However, the low renter population suggests a cautious approach to scaling up investments, focusing instead on properties that can reliably generate cash flow within the constraints of the local market dynamics.
To summarize, the key figures driving this assessment are the $970 FMR versus the $756 market rent, indicating a moderate yield potential, and the $104,375 average income, suggesting sufficient financial stability among residents to sustain rental payments. The low percentage of renters and lack of DOM data imply a need for careful tenant management and selection to maintain steady cash flows.
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.