Location: Koochiching County, MN | Metro: Koochiching County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,240 |
| 4 Bedrooms | $1,490 |
| 5 Bedrooms | $1,728 |
| 6 Bedrooms | $1,935 |
| 7 Bedrooms | $2,090 |
| 8 Bedrooms | $2,195 |
The analysis for ZIP code 56679 in Minnesota focuses on deriving a rough Section 8 cap-rate picture using the available data points. The Family Monthly Rent (FMR) for a 2-bedroom unit is set at $970 for fiscal year 2026, based on metropolitan area standards. However, the median home value and market rent figures are not available, which complicates a direct comparison.
To derive the implied gross yield for the Section 8 scenario, we must first understand that the cap rate is calculated as the net operating income (NOI) divided by the property's value. In this case, the annualized FMR for a 2-bedroom unit would be $11,640 ($970 x 12 months). Without the median home value, we cannot directly calculate the cap rate; however, we can infer that the gross yield would be based on the annualized rental income of $11,640.
In the absence of market rent data, it is impossible to provide an exact gross yield comparison. Nonetheless, it is important to note that the lack of market rent data could indicate either a limited supply of rental properties or a lack of comprehensive reporting in the area. Given the unknown percentage of renter density and the unreported days on market (DOM), the Section 8 scenario becomes the primary focus for potential investors.
The implied gross yield from the Section 8 program, based solely on the annualized FMR, offers a stable income stream but does not account for the variability in market rents that could potentially offer higher yields. Investors should consider the stability of Section 8 rents versus the uncertainty of market rents when making investment decisions.
Given the incomplete data, the Section 8 scenario provides a clearer and more reliable income projection for the ZIP code 56679. The gross yield, while not calculated due to missing property values, is anchored around the guaranteed $11,640 per year for a 2-bedroom unit. This stability contrasts sharply with the unpredictability of market rents, especially in areas where such data is not readily available.
Data Sources: FMR data from HUD (2027).
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.