Location: Wadena County, MN | Metro: Becker 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 | $710 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,410 |
| 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: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $780 | $300,570 | 0.26% | F |
| 2BR | $1,030 | $313,324 | 0.33% | F |
| 3BR | $1,410 | $357,565 | 0.39% | F |
| 4BR | $1,700 | $403,884 | 0.42% | F |
| 5BR | $1,972 | $486,834 | 0.41% | F |
U.S. Census Bureau data (2024)
The potential risks for investing in Section 8 properties in ZIP code 56470, located in Park Rapids, MN, are significant. Firstly, tenant turnover is a critical issue. The market rent for properties in this area is $912, which is notably lower than the Fair Market Rent (FMR) of $1,010 for the metro area. This discrepancy suggests that tenants might be more likely to move if they find a property outside the program that better fits their budget. High turnover can lead to increased costs associated with finding new tenants, including advertising, background checks, and potential repairs.
Vacancy exposure is another concern. The average number of days on the market (DOM) for rental properties in ZIP 56470 is not available, indicating a lack of historical data on how quickly properties are rented out. This uncertainty makes it difficult to predict the length of time a property might remain vacant, leading to lost rental income and additional expenses.
Deferred maintenance is also a risk factor. With an average home value of $316,350 and a median household income of $67,500, many residents may struggle to afford substantial repairs or upgrades. This financial strain can result in properties falling into disrepair over time, necessitating costly renovations that may not be fully covered by Section 8 payments.
However, these risks must be weighed against the high density of renters in the area. The renter share stands at 24.5%, which is relatively high. This high concentration of renters often translates into a robust demand for housing vouchers, making it easier to find qualified tenants who are willing and able to participate in the Section 8 program. Despite the challenges, the strong rental market provides some assurance that there will be a steady stream of potential tenants.
Verdict: Moderate risk for a first-time Section 8 landlord.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.