Location: Moody County, SD | Metro: Lincoln County, MN
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 | $800 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,010 | $203,336 | 0.5% | F |
| 3BR | $1,400 | $262,430 | 0.53% | F |
U.S. Census Bureau data (2024)
Skeptical investors considering real estate investments in ZIP code 57026, South Dakota, might raise several concerns based on the provided data. Let's address these objections directly.
Objection 1: Will Fair Market Rent (FMR) of $970 for the metro area in fiscal year 2026 cover the mortgage on a $267,851 home?
The FMR of $970 does not automatically guarantee that it will cover the mortgage payments on a $267,851 home. To determine if this is feasible, one must consider the interest rate and the term of the mortgage. Assuming a typical 30-year fixed-rate mortgage with an average interest rate, the monthly payment could be significantly higher than $970. However, the FMR can serve as a benchmark for setting rental prices, which could help attract tenants willing to pay close to this amount.
Objection 2: Is there enough renter demand at 32.3%?
A 32.3% rental rate suggests that a little over one-third of the housing units in ZIP 57026 are rented. This percentage indicates a moderate level of demand but may not be sufficient to ensure consistent occupancy. The data does not provide the total number of housing units or the vacancy rate, which are critical factors in assessing the overall rental market health. Without this additional context, it's challenging to definitively conclude whether this demand level is robust enough for investment.
Objection 3: Will vouchers keep pace with $1,017 market rents?
The question of whether vouchers will keep up with market rents of $1,017 is pertinent, especially for those interested in the Section 8 program. The data does not specify the current voucher amount or any projected increases. Generally, voucher amounts are adjusted periodically to reflect changes in the cost of living and market conditions. If the voucher amounts are below $1,017, landlords may need to consider the gap between the voucher and market rents. This scenario requires careful consideration of the potential for long-term financial stability versus immediate rental income.
In conclusion, while the provided data offers insights into the rental market and fair market rents, it does not fully resolve all investor concerns. Careful analysis of additional metrics such as mortgage rates, total housing unit counts, and vacancy rates, alongside an understanding of how voucher amounts adjust over time, is necessary for making informed investment decisions in ZIP 57026.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.