Location: Otter Tail County, MN | Metro: Otter Tail 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 | $840 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,200 |
| 3 Bedrooms | $1,650 |
| 4 Bedrooms | $1,670 |
| 5 Bedrooms | $1,937 |
| 6 Bedrooms | $2,169 |
| 7 Bedrooms | $2,343 |
| 8 Bedrooms | $2,460 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,650 | $487,249 | 0.34% | F |
U.S. Census Bureau data (2024)
The rent math in ZIP code 56515 within the Otter Tail County, MN metro area is favorable but requires careful consideration. The Fair Market Rent (FMR) for the area in fiscal year 2026 is set at $1,070, which is slightly higher than the current market rent of $1,013 based on Census ACS data. This suggests that there is room to increase rental rates slightly without pricing out potential tenants.
Acquisition costs are moderate. With a median home value of $424,274, buying properties in this ZIP code is not prohibitively expensive. However, the lack of data on days on market (DOM) and the fact that no homes required a price cut indicates a stable housing market with little pressure to reduce asking prices. This stability can be advantageous for long-term investments.
Tenant demand is present but not overwhelming. The ZIP code has a total population of 2,723, with 16.7% being renters. This means approximately 453 individuals are actively seeking rental housing, a figure that can support a modest portfolio of rental units. While the renter share is relatively low compared to urban areas, it still represents a viable market segment.
Verdict: ZIP 56515 presents a balanced opportunity for Section 8 landlords and small-portfolio investors. The slight margin between the FMR and market rent supports a modest profit potential. Home values are reasonable, making acquisitions feasible, and although the renter share is not high, it does provide a steady stream of potential tenants. Landlords should focus on properties that can be rented close to the FMR to maximize returns while staying competitive in the local market.
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.