Location: Otter Tail County, MN | Metro: Otter Tail County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,490 |
| 4 Bedrooms | $1,500 |
| 5 Bedrooms | $1,740 |
| 6 Bedrooms | $1,949 |
| 7 Bedrooms | $2,105 |
| 8 Bedrooms | $2,210 |
U.S. Census Bureau data (2024)
The ZIP code 56588, with a population of 483, is characterized by a low percentage of renters at 5.2%. This indicates that the area is predominantly homeowner-dominated rather than a renter-heavy zone. The scarcity of renters means that there is likely less demand for housing vouchers, which could affect the attractiveness of the area for Section 8 tenants.
Median household income in this ZIP code stands at $74,306. When compared to the market rent of $1,125, it becomes evident that typical rent consumes approximately 15.1% of the local income. This calculation is derived from dividing the market rent by the median household income and multiplying by 100. The Fair Market Rent (FMR) for the area, set at $1,010 for fiscal year 2026 in the metro region, is slightly below the actual market rent, suggesting that landlords might need to adjust their expectations if they plan to participate in the Section 8 program.
A landlord in ZIP 56588 can expect tenants who are likely to be on the lower end of the income spectrum relative to the median. Given the FMR and the actual market rent, these tenants would typically have an income around $25,300 to $45,500 per year, which is the range allowed for Section 8 eligibility based on the FMR. This means that landlords will need to balance their rental pricing between the market rate and the FMR to attract voucher holders while still maintaining profitability.
With only 5.2% of the population renting, the competition for rental properties among voucher holders could be fierce, leading to a smaller pool of potential tenants. Landlords should prepare for a tenant base that is financially dependent on housing assistance, requiring a thorough understanding of the HUD guidelines and regulations associated with the Section 8 program.
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.