Location: Otter Tail 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 | $800 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,510 |
| 4 Bedrooms | $1,690 |
| 5 Bedrooms | $1,960 |
| 6 Bedrooms | $2,195 |
| 7 Bedrooms | $2,371 |
| 8 Bedrooms | $2,490 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $880 | $240,534 | 0.37% | F |
| 2BR | $1,150 | $324,969 | 0.35% | F |
| 3BR | $1,510 | $384,346 | 0.39% | F |
| 4BR | $1,690 | $467,657 | 0.36% | F |
| 5BR | $1,960 | $604,867 | 0.32% | F |
U.S. Census Bureau data (2024)
The ZIP code 56501, encompassing Detroit Lakes, MN, presents a dynamic housing market characterized by specific economic indicators. The Fair Market Rent (FMR) for the area, set at $1,070 for the fiscal year 2026, slightly exceeds the current market rent of $963 based on Census ACS data. This suggests that the rental market is growing towards the federally recognized fair market rate, indicative of rising demand.
The low price-cut share of 0.2% implies that landlords and property owners are generally holding firm on their pricing, indicating confidence in the local rental market's ability to sustain current rates without significant concessions. This further supports the notion of a market where demand is robust enough to support existing prices without downward adjustments.
The median home value of $358,609 provides insight into the overall affordability and desirability of the area. A high median home value can suggest a stable and potentially growing economy, but it also indicates that homeownership may be increasingly out of reach for some residents, thereby increasing reliance on rental properties.
The 29.5% renter share is a critical figure that highlights the importance of rental properties in the area. With nearly a third of the population renting, there is a consistent long-term housing pressure that favors the maintenance and potential growth of the rental sector. This share suggests that a substantial portion of the community is likely to continue seeking rental accommodations, which could provide steady income for landlords and small-portfolio investors.
In summary, the market in ZIP 56501 leans towards a scenario where demand is driving the rental market, with rents approaching the FMR and a notable percentage of the population relying on rentals. For investors, this translates into a market where rental properties can serve a significant need, potentially offering stable returns in an area experiencing shifts toward greater housing costs and a strong rental presence.
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.