Location: Morrison County, MN | Metro: Minneapolis-St. Paul-Bloomington, MN-WI 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 | $1,120 |
| 1 Bedroom | $1,270 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,540 | $267,116 | 0.58% | F |
| 3BR | $2,040 | $325,083 | 0.63% | D |
| 4BR | $2,280 | $377,802 | 0.6% | D |
U.S. Census Bureau data (2024)
The classification of ZIP code 56353, located in Milaca, Minnesota, hinges on analyzing both its yield potential and stability factors. The Fair Market Rent (FMR) for the fiscal year 2024 is set at $1270, while the average market rent stands at $858. This significant gap suggests a higher-than-average yield potential for rental properties in this area. Landlords can capitalize on the difference between the FMR and the market rent to achieve better returns.
However, the stability metrics present a mixed picture. The percentage of renters in the area is relatively low at 20.2%, which could indicate a smaller pool of potential tenants and possibly higher vacancy rates. Additionally, the median household income is $78,763, which is below the national average but still provides some financial cushioning for tenants. The lack of data on days on market (DOM) makes it difficult to assess how quickly properties might be rented out, adding an element of uncertainty.
When considering the median home value of $323,889, it's important to note that this figure does not directly impact rental yields but can influence property appreciation and overall investment value. A lower percentage of renters combined with the income level suggests that the market may not be as stable as other areas with higher percentages of renters and longer DOM periods.
In summary, ZIP 56353 presents a scenario where the yield is notably strong due to the substantial difference between the FMR and market rent. However, the stability is compromised by the low percentage of renters and the limited data on DOM. This makes the market somewhat risky for steady cash flow but potentially attractive for short-term flips or investments focused on maximizing rental income. For small-portfolio investors, it may be advisable to balance these high-yield opportunities with caution, given the stability concerns.
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.