Location: Kanabec County, MN | Metro: Mille Lacs County, MN HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $1,020 |
| 3 Bedrooms | $1,300 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,020 | $319,946 | 0.32% | F |
| 3BR | $1,300 | $354,468 | 0.37% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 56342 in Isle, Minnesota reveals a unique blend of yield and stability that neither fits the high-yield/low-stability flip-style market nor qualifies as a steady-cashflow zone. Instead, it falls into a category that offers moderate opportunities for both.
On the yield axis, the Federal Market Rent (FMR) for fiscal year 2024 is set at $960, which is significantly higher than the market rent of $814. This indicates a potential for above-average rental income, suggesting a moderate yield environment. However, when considering the median home value of $292,996, the rental income appears less impressive relative to property value. The FMR represents a 32.78% annual return on investment if we assume a single-family home is rented out for the full year without vacancy periods, calculated as follows: ($960 * 12 months) / $292,996 = 32.78%. This figure is noteworthy but not indicative of a high-yield market.
Moving to the stability axis, the data presents a mixed picture. With only 14.0% of the population being renters, the market lacks a substantial tenant base, which can affect the consistency of rental income. Additionally, the absence of day DOM (days on market) data implies challenges in measuring how quickly properties are leased, further impacting stability. On a positive note, the average household income of $63,295 suggests that tenants who do exist are likely to have stable financial situations, which could lead to fewer delinquencies and lower turnover rates.
To summarize, ZIP 56342 offers a moderate yield opportunity due to the favorable gap between FMR and market rent. However, the limited rental population and unclear leasing dynamics reduce its stability. Therefore, it is best described as a market with moderate potential for rental income but requires careful management to ensure steady cash flow.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.