Location: Koochiching County, MN | Metro: Duluth, MN-WI MSA
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 | $770 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,870 |
| 5 Bedrooms | $2,169 |
| 6 Bedrooms | $2,429 |
| 7 Bedrooms | $2,623 |
| 8 Bedrooms | $2,754 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,110 | $97,149 | 1.14% | B |
| 3BR | $1,530 | $163,995 | 0.93% | C |
| 4BR | $1,870 | $222,912 | 0.84% | C |
U.S. Census Bureau data (2024)
The classification of ZIP 56649, located in International Falls, Minnesota, hinges on the balance between yield and stability. With a Fair Market Rent (FMR) of $980 for the fiscal year 2024, this area presents an opportunity for higher rental yields compared to the market rate of $659. The FMR is a critical benchmark set by HUD that reflects the maximum rent a household can pay while still spending no more than 30 percent of their adjusted income on housing.
The median home value of $153,712 is another key figure, indicating the average cost of homes in the area. This value suggests that property investments here are relatively affordable compared to other regions, making it easier for landlords to enter the market and potentially achieve a good return on investment.
Stability, however, is a different story. Only 21.1% of residents in ZIP 56649 are renters, which is a low percentage and indicates a smaller pool of potential tenants. The median household income of $64,736 is also a factor; it's important for landlords to ensure that the majority of residents can afford the rents they charge. Given the N/A data for days on market (DOM), it's unclear how quickly properties are rented out, which could be a concern for cash flow consistency.
Based on these figures, ZIP 56649 leans towards being a steady-cashflow zone. While the yield is relatively high due to the disparity between the FMR and market rate, the stability indicators suggest a cautious approach. The low percentage of renters and limited insight into rental turnover rates point to a market where rapid flips might not be as profitable or feasible. Instead, long-term rentals appear to be the safer bet, offering consistent but not necessarily explosive returns.
To summarize, the higher rental yields make this a favorable area for landlords looking to capitalize on the difference between HUD's FMR and local market rates. However, the lower percentage of renters and uncertain rental turnover rates indicate that this is best suited for those seeking stable, rather than highly volatile, cash flows. Therefore, the recommendation is to invest in properties with the intention of holding them for longer periods, targeting steady, reliable rental income.
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.