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 | $720 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,360 |
| 4 Bedrooms | $1,490 |
| 5 Bedrooms | $1,728 |
| 6 Bedrooms | $1,935 |
| 7 Bedrooms | $2,090 |
| 8 Bedrooms | $2,195 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,030 | $300,335 | 0.34% | F |
| 3BR | $1,360 | $331,197 | 0.41% | F |
| 4BR | $1,490 | $422,561 | 0.35% | F |
U.S. Census Bureau data (2024)
ZIP 56544, located in Otter Tail County, Minnesota, serves as a cash-flow anchor within a Section 8 portfolio strategy. The Financial Market Rent (FMR) for the MN metro area in fiscal year 2026 is set at $980, which exceeds the local market rent of $926. This $54 spread ensures that landlords receive a slightly higher rental income compared to what they would get from market-rate tenants, thus stabilizing cash flow.
The median home value in ZIP 56544 is $334,064, indicating a relatively stable housing market. However, the primary focus here is on the rental income rather than potential property appreciation, given that the price-cut share and days on market (DOM) are not applicable or provided. This makes ZIP 56544 less attractive as an appreciation play but ideal for steady, reliable rental income.
With a 17.0% renter share, there is a moderate demand for rentals in the area. The median income of $72,885 suggests that residents have sufficient financial stability to support consistent rental payments. Landlords can rely on this demographic to maintain a steady stream of income without the volatility often associated with areas where rental properties are primarily held by first-time investors or those seeking quick appreciation.
In summary, ZIP 56544 stands out as a cash-flow anchor due to the favorable spread between the FMR and market rent. It provides a secure investment opportunity for landlords and small-portfolio investors looking to stabilize their income streams within a Section 8 portfolio.
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.