Location: Otter Tail County, MN | Metro: Douglas County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $790 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,050 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,530 |
| 5 Bedrooms | $1,775 |
| 6 Bedrooms | $1,988 |
| 7 Bedrooms | $2,147 |
| 8 Bedrooms | $2,254 |
U.S. Census Bureau data (2024)
The classification of ZIP code 56315 hinges on its financial metrics, specifically the Fair Market Rent (FMR) and median household income, alongside rental occupancy rates. With an FMR of $970 for the metro area in fiscal year 2026 and a market rent of $986, the rental yields are relatively modest when compared to the median home value of $291,090. This suggests that while rental income can be expected, it will not dramatically outpace property values.
The stability of this market is questionable due to the low percentage of renters at 14.3%. Typically, higher percentages indicate a more stable rental market, but here we see a figure that is well below average, implying a less reliable tenant pool. The median household income of $89,514 provides some insight into the economic conditions of the area, though without a direct comparison to typical rental costs, its impact on stability is less clear. However, the absence of data on days on market (DOM) indicates a lack of recent sales activity, which could suggest either a stable market with little turnover or an unstable market with hesitance to sell or buy.
Based on these figures, ZIP 56315 leans towards being a steady-cashflow zone rather than a high-yield/low-stability flip-style market. The yield is not exceptionally high given the home values, and while the stability indicators are mixed, the low rental rate percentage points more towards a market where cash flow is consistent but not particularly robust. For landlords and small-portfolio investors looking to avoid high-risk investments, this ZIP code presents a moderate opportunity with predictable returns.
To further clarify the investment potential, consider the following:
In conclusion, ZIP 56315 offers a balanced approach to real estate investment, suitable for those seeking stable, long-term cash flows without the volatility associated with flipping properties or investing in highly competitive markets.
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.