Location: Kandiyohi County, MN | Metro: Kandiyohi County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
U.S. Census Bureau data (2024)
The potential risks for investing in ZIP 56253 under the Section 8 program are significant. First, tenant turnover could be an issue due to the discrepancy between the market rent of $843 and the Fair Market Rent (FMR) of $1,000. This gap may lead to tenants seeking higher-value accommodations, increasing the likelihood of frequent turnovers. Second, vacancy exposure is a concern as there is no available data on the days on market (DOM), which can indicate how quickly properties are rented out. A longer DOM could mean extended periods without rental income, impacting cash flow negatively. Lastly, the deferred maintenance risk is considerable given the typical home value of $290,955 and the median income of $75,391. The median income figure suggests that property owners might struggle to allocate funds for necessary repairs and maintenance, which could affect the quality and attractiveness of the property to Section 8 tenants.
However, these risks must be weighed against the high renter density in ZIP 56253, with 10.7% of residents being renters. High renter density typically translates into a robust demand for rental properties, including those participating in the Section 8 program. This demand can mitigate some of the risks associated with vacancy and turnover, as there is a larger pool of potential tenants who may be interested in the property.
Verdict: Moderate risk for a first-time Section 8 landlord.
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.