Location: Otter Tail County, MN | Metro: Otter Tail County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,430 |
| 4 Bedrooms | $1,450 |
| 5 Bedrooms | $1,682 |
| 6 Bedrooms | $1,884 |
| 7 Bedrooms | $2,035 |
| 8 Bedrooms | $2,137 |
U.S. Census Bureau data (2024)
ZIP code 56576, located in Otter Tail County, Minnesota, serves as a strong cash-flow anchor within a Section 8 portfolio strategy. The key reason for this classification is the favorable spread between the Fair Market Rent (FMR) set at $1,070 for the metro area for fiscal year 2026 and the current market rent of $840. This discrepancy means that landlords can secure higher rents through Section 8 vouchers compared to market rates, enhancing their cash flow.
The median home value in ZIP 56576 stands at $404,531. Given the relatively high property values and the guaranteed rental income from Section 8, landlords can leverage this program to cover mortgage payments and other expenses while ensuring steady, reliable cash flow. The FMR exceeds market rents by $230 per month, providing a significant buffer against financial instability.
This ZIP code does not present itself as an appreciation play due to the lack of specific data on price-cut shares and days on market (DOM). However, its role as a cash-flow anchor is well-defined. The guaranteed nature of Section 8 payments reduces the risk associated with tenant turnover and late payments, which are common concerns for landlords in volatile markets.
While ZIP 56576 also has a 10.4% renter share and a median income of $63,750, these factors do not outweigh the benefits of the cash-flow anchor status. The higher FMR relative to market rents ensures that properties in this ZIP code will generate more consistent and predictable income, which is crucial for maintaining a stable investment portfolio.
In conclusion, ZIP 56576 is best categorized as a cash-flow anchor within a Section 8 portfolio strategy. The $230 monthly difference between FMR and market rents provides a substantial advantage, making it an ideal location for landlords looking to stabilize their income streams and protect against market fluctuations.
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.