Location: Todd County, MN | Metro: Morrison County, MN
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 | $860 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,130 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,800 |
| 5 Bedrooms | $2,088 |
| 6 Bedrooms | $2,339 |
| 7 Bedrooms | $2,526 |
| 8 Bedrooms | $2,652 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,450 | $242,915 | 0.6% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 56347 reveals an interesting scenario when comparing the Federal Market Rent (FMR) and the market rent figures. Using the annualized 2BR FMR of $1,040 for FY 2026, the implied gross yield for a property in this area would be approximately 4.2%. This calculation is derived by multiplying the monthly FMR by 12 months and dividing by the median home value of $245,697.
On the other hand, using the Census ACS reported market rent of $1,030, the implied gross yield drops slightly to about 4.17%. The difference between these two yields is minimal, but it's important to note that the FMR yield is marginally higher.
To determine which scenario is more realistic, consider the local rental market dynamics. ZIP 56347 has a renter density of 20.5%, indicating a relatively low proportion of renters compared to homeowners. However, the N/A-day DOM (Days on Market) suggests incomplete data regarding how quickly properties are rented out, which could imply either a very efficient market or a lack of sufficient recent transactions to provide reliable insights.
Given the 20.5% renter density, landlords might find that the actual rental rates could fluctuate based on supply and demand. If the market is tight and competition among renters is high, landlords might achieve closer to the FMR rate of $1,040. Conversely, if there is ample housing supply, the market rent rate of $1,030 might be more reflective of what landlords can expect.
In conclusion, while the FMR provides a slightly better gross yield at 4.2%, the reality of achieving this rate depends on the local rental market conditions. Landlords should assess the competition and demand in ZIP 56347 carefully before deciding on their rental pricing strategy.
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.