Location: Bolivar County, MS | Metro: Bolivar County, MS
| Unit Size | Monthly FMR |
|---|---|
| Studio | $690 |
| 1 Bedroom | $690 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,180 |
| 4 Bedrooms | $1,190 |
| 5 Bedrooms | $1,380 |
| 6 Bedrooms | $1,546 |
| 7 Bedrooms | $1,670 |
| 8 Bedrooms | $1,754 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 38746 presents a mixed picture due to limited data availability. The Federal Market Rent (FMR) for a 2-bedroom apartment in this area is set at $850 per month for fiscal year 2026, based on metropolitan averages. Annualizing this figure yields a yearly rental income of $10,200. Meanwhile, the market rent for a similar unit, according to Census ACS data, stands at $608 per month, translating into an annual market rent of $7,296.
Unfortunately, the median home value for ZIP 38746 is not available, which complicates a direct cap rate calculation. However, we can still infer the gross yield from these figures. Assuming the FMR applies, the gross yield would be higher compared to using the market rent. This is because the FMR provides a guaranteed income level that is significantly above the typical market rent.
To put it into perspective, if we were to use the FMR of $850 per month, the gross yield would be calculated based on the $10,200 annual rental income. Conversely, if the actual market rent of $608 per month is used, the gross yield would be based on the $7,296 annual rental income. Given that the FMR is higher, it implies a higher gross yield when compared to the market rent scenario.
However, considering the 46.5% renter density in the area, it's important to recognize that while Section 8 rents provide stability, they also come with a different set of management considerations. The lack of data on days on market (DOM) suggests that either there is a scarcity of recent sales data or the housing market is relatively inactive, making it difficult to assess how quickly properties turn over.
In conclusion, the FMR scenario suggests a higher gross yield for Section 8 properties in ZIP 38746, but the actual market rent paints a more conservative picture. Landlords and small-portfolio investors should weigh the benefits of guaranteed income against potential management challenges and market conditions when deciding on participation in the Section 8 program. The higher renter density indicates a strong demand for rental housing, which could support higher occupancy rates and thus favor the FMR-based yield. Nonetheless, the absence of DOM data means investors must rely on other local market indicators to gauge property turnover and liquidity risks.
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.