Location: Wilkin County, MN | Metro: Fargo, ND-MN MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $880 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,690 |
| 4 Bedrooms | $2,000 |
| 5 Bedrooms | $2,320 |
| 6 Bedrooms | $2,598 |
| 7 Bedrooms | $2,806 |
| 8 Bedrooms | $2,946 |
U.S. Census Bureau data (2024)
The ZIP code 56594 is located in a suburban setting, characterized by a relatively small population of 442 residents. The area has a low rental rate, with only 12.6% of the population being renters. This indicates a predominantly owner-occupied community where the majority of residents own their homes. Given the median household income of $95,833, it's clear that the residents of this ZIP code have a strong financial standing, which supports the notion of homeownership.
However, despite the low percentage of renters, the Federal Market Rent (FMR) for ZIP code 56594 in fiscal year 2024 is set at $980. This figure represents the maximum amount that a landlord can charge for a Section 8 voucher tenant. Notably, there is no available data on the actual market rent for the area, which could be higher or lower than the FMR. The absence of this information makes it challenging to gauge the competitiveness of the FMR against the local rental market rates.
Considering the characteristics of ZIP 56594, it appears to be more suited for a hands-off Section 8 voucher operator rather than a hands-on value-add buyer. The low rental rate suggests that there isn't a significant demand for rental properties, and the high median income implies that most residents can afford to purchase homes. For a hands-off operator, the stable income provided by the Section 8 program can be attractive, especially given the financial strength of the residents. However, for a value-add buyer looking to renovate and increase rents, the limited rental market and lack of detailed market rent data pose challenges.
In conclusion, while ZIP 56594 offers opportunities for Section 8 investment due to its stable financial environment, the low demand for rentals and the uncertainty around market rents make it less appealing for active property management strategies. A hands-off approach is likely more appropriate for this ZIP code, ensuring compliance with Section 8 regulations and maintaining a steady cash flow without the need for extensive property improvements or market analysis.
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.