Location: Otter Tail County, MN | Metro: Otter Tail County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,420 |
| 5 Bedrooms | $1,647 |
| 6 Bedrooms | $1,845 |
| 7 Bedrooms | $1,993 |
| 8 Bedrooms | $2,093 |
U.S. Census Bureau data (2024)
The median income in ZIP code 56551 stands at $63,750, which places significant constraints on the average household's ability to afford the current market rate of $812 for rent. This discrepancy highlights an affordability gap where the median renter would struggle to meet the market demands without financial assistance.
Comparatively, the Fair Market Rent (FMR) set at $970 for metro FY 2026 is higher than the current market rate, indicating that even government-supported housing vouchers may not fully cover the costs of renting in this area. However, they do offer a substantial subsidy, making it easier for tenants to find housing within their budget.
Given that 20.4% of the 2,387 residents are renters, the competition for tenants could be fierce. Landlords need to consider both the number of potential renters and their financial capabilities when setting rental rates. The affordability gap suggests that landlords who rely solely on market-rate rents might face challenges in filling vacancies, especially if the majority of renters are constrained by the median income level.
The takeaway for landlords is clear: adopting a strategy that accepts Section 8 vouchers can provide a steady stream of tenants, reducing vacancy rates and ensuring consistent income. While the voucher amount is slightly above the current market rate, it still represents a reliable source of income compared to the uncertainty of finding cash-paying tenants willing to pay the full market price.
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.