Location: Marshall County, MS | Metro: Benton County, MS HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $800 |
| 1 Bedroom | $820 |
| 2 Bedrooms | $1,020 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,660 |
| 5 Bedrooms | $1,926 |
| 6 Bedrooms | $2,157 |
| 7 Bedrooms | $2,330 |
| 8 Bedrooms | $2,447 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 38659 reveals a nuanced perspective for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in ZIP 38659 for FY 2024 is set at $1000 annually, while the Census ACS reports a market rent of $894 for the same type of unit. Given the median home value of $162,765 in this area, these figures can be used to calculate the implied gross yield.
In the scenario where a landlord participates in the Section 8 program, renting a property at the FMR of $1000 would result in an annualized gross yield of approximately 6.15%. This calculation is derived by dividing the annual rent ($1000) by the median home value ($162,765).
Conversely, if the landlord opts to rent the property at the market rate of $894, the annualized gross yield drops to about 5.50%. This lower yield is calculated similarly, by dividing the market rent ($894) by the median home value ($162,765).
The difference between the two yields highlights the financial advantage of participating in the Section 8 program over renting at the market rate. However, the decision should also consider the local rental market dynamics. With a renter density of 18.3%, the competition for tenants is relatively low, suggesting that landlords might find it easier to fill vacancies at the FMR rather than the market rate. The N/A-day Days on Market (DOM) indicates incomplete data, which could mean either a very quick turnover or significant variability in how long properties remain vacant before being rented out.
Given the data, the Section 8 scenario presents a higher gross yield and potentially less risk due to the government-backed rental assistance program. Landlords should weigh these factors against their own operational costs and preferences when deciding whether to participate in Section 8 or rent at market rates.
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.