Location: St. Cloud, MN | Metro: St. Cloud, MN MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $840 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,570 |
| 4 Bedrooms | $1,860 |
| 5 Bedrooms | $2,158 |
| 6 Bedrooms | $2,417 |
| 7 Bedrooms | $2,610 |
| 8 Bedrooms | $2,741 |
U.S. Census Bureau data (2024)
To determine if a landlord should buy in ZIP 56303 (Saint Cloud, MN) for Section 8 purposes, follow this decision tree based on the provided data.
1) Does the Fair Market Rent (FMR) of $1100 cover the debt service on a property valued at $235,869?
Yes: The FMR of $1100 is sufficient to clear the debt service on a property costing $235,869. This means that the rental income generated from a Section 8 tenant will be enough to meet the mortgage obligations and other expenses associated with owning the property.
No: The FMR of $1100 does not cover the debt service on a property costing $235,869. In this case, landlords would incur losses from renting exclusively to Section 8 tenants.
It Depends: This scenario applies if the landlord has a different financial structure or if the property's cost varies significantly from the $235,869 example. For instance, if the landlord owns the property outright or has a lower-cost property, the FMR might suffice. However, with the given figures, the answer is clear.
2) How does the Zillow Observed Rental Index (ZORI) of $952 compare to the FMR?
ZORI is below FMR: At $952, the ZORI is below the FMR of $1100. This suggests that market rents are lower than what the government subsidizes, making Section 8 rentals more attractive financially.
ZORI is at or above FMR: This condition is not met with the given data, but if it were, it would mean that landlords could potentially earn more by renting to non-Section 8 tenants. However, since ZORI is below FMR, landlords can expect to receive higher guaranteed income from Section 8.
3) Is there enough demand with 36.7% of residents being renters and an average Days on Market (DOM) of 40 days?
Yes: With 36.7% of residents being renters and an average DOM of 40 days, there is strong demand for rental properties in Saint Cloud. This indicates that landlords can quickly find tenants and maintain occupancy rates.
No: This scenario would apply if the percentage of renters was significantly lower or the DOM was much longer. Given the data, there is enough demand.
It Depends: This would apply if the landlord requires a higher percentage of renters or expects a shorter DOM for their investment strategy. However, with 36.7% renters and a relatively quick DOM of 40 days, the demand is considered adequate.
In conclusion, based on the provided data, landlords can confidently invest in ZIP 56303 for Section 8 rentals. The FMR covers debt service, market rents are below the FMR, and there is sufficient demand to ensure occupancy.
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.