Location: Redwood County, MN | Metro: Brown County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $880 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,270 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $1,900 |
| 5 Bedrooms | $2,204 |
| 6 Bedrooms | $2,468 |
| 7 Bedrooms | $2,665 |
| 8 Bedrooms | $2,798 |
U.S. Census Bureau data (2024)
A landlord considering ZIP code 56266 for Section 8 investment should follow this decision tree:
Step 1: Clearing Debt Service
The Fair Market Rent (FMR) for the metro area in fiscal year 2026 is $1,210. A property valued at $182,013 must be evaluated based on whether this FMR can cover the debt service. If the annual debt service (including principal, interest, taxes, and insurance) is less than $14,520 ($1,210 x 12), then the answer is yes, FMR clears debt service. Otherwise, the answer is no.
Step 2: Market Rent Comparison
The Census American Community Survey reports the average market rent in ZIP 56266 at $1,047. This figure is below the FMR of $1,210. If the market rent is below FMR, the potential exists for landlords to receive higher rents through Section 8 vouchers. However, if market rent were equal to or above FMR, it would indicate that the area is already priced at or above the FMR threshold, making it less advantageous for Section 8 investments.
Step 3: Rental Demand Assessment
The rental demand in ZIP 56266 is characterized by a 17.0% rental rate among residents. The Days on Market (DOM) data is not available, which makes it challenging to assess how quickly properties are rented out. Despite this, the 17.0% rental rate suggests a moderate demand for rental units. If the landlord can find properties with a lower DOM, indicating quicker rental turnover, the answer is yes, there is enough demand. If DOM is high and indicates slow turnover, the answer is no. In cases where DOM is unknown but rental rates are steady, the answer is it depends on other factors such as property management costs and vacancy rates.
Summary:
The key to success in ZIP 56266 lies in aligning the property's financials with the FMR and understanding the local rental market dynamics. Landlords should also consider the broader economic context and trends in the area.
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.