Location: Otter Tail County, MN | Metro: Otter Tail County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $740 |
| 1 Bedroom | $820 |
| 2 Bedrooms | $1,080 |
| 3 Bedrooms | $1,500 |
| 4 Bedrooms | $1,580 |
| 5 Bedrooms | $1,833 |
| 6 Bedrooms | $2,053 |
| 7 Bedrooms | $2,217 |
| 8 Bedrooms | $2,328 |
U.S. Census Bureau data (2024)
In ZIP code 56534, landlords considering Section 8 investments must first acknowledge several potential pitfalls. Tenant turnover can be a significant issue, especially when comparing the market rent of $856 to the Federal Market Rent (FMR) of $1,200 for fiscal year 2026 in the metropolitan area. This discrepancy suggests that tenants might prefer higher-quality housing outside of the program, leading to higher turnover rates.
Vacancy exposure is another concern, as the Days on Market (DOM) data is not available. This makes it challenging to predict how long properties might remain vacant between tenants, which can impact cash flow and profitability. Additionally, the typical home value in this ZIP code stands at $317,331, while the median income is $70,694. These figures indicate a potential mismatch between property values and residents' ability to afford maintenance costs, which could lead to deferred maintenance issues and increased expenses for landlords.
However, these risks must be weighed against the high concentration of renters in the area. With a 7.8% renter share, there is likely a strong demand for rental properties, including those utilizing Section 8 vouchers. High renter density often translates into a robust pool of potential voucher holders, which can stabilize occupancy rates and provide a steady stream of income.
The verdict for ZIP code 56534 is moderate risk for a first-time Section 8 landlord. While there are notable challenges, the strong renter base provides a foundation for successful management with proper preparation and strategy.
Data Sources: FMR data from HUD (2027). 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.