Location: Metcalfe County, KY | Metro: Adair County, KY
| Unit Size | Monthly FMR |
|---|---|
| Studio | $650 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,190 |
| 4 Bedrooms | $1,270 |
| 5 Bedrooms | $1,473 |
| 6 Bedrooms | $1,650 |
| 7 Bedrooms | $1,782 |
| 8 Bedrooms | $1,871 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 42129 in Edmonton, KY, reveals distinct scenarios based on the Federal Market Rent (FMR) and the market rent figures. Using the annualized 2BR FMR of $870 for Fiscal Year 2026, the implied gross yield is calculated as follows: $870 per month multiplied by 12 months equals $10,440 annually. Dividing this by the median home value of $166,430 yields an implied gross yield of approximately 6.28%. This calculation assumes that the property would be rented at the FMR rate.
In contrast, using the market rent figure of $573 per month from the Census ACS, the implied gross yield is significantly lower. Multiplying $573 by 12 gives an annual rental income of $6,876. When divided by the median home value of $166,430, the implied gross yield drops to about 4.13%. This scenario reflects the current market conditions where properties might command less than the FMR.
The gross yield comparison clearly shows that renting under the Section 8 program at the FMR can provide a higher return compared to the prevailing market rates. However, the choice between these two scenarios depends largely on the local rental market dynamics and the availability of Section 8 vouchers.
Given the renter density of 25.0% in ZIP 42129, it's important to consider how many potential tenants are likely to be seeking rental properties. The N/A-day DOM (days on market) suggests that either there is a quick turnover or that data isn't available, which could indicate a robust demand for rentals or simply a lack of comprehensive data.
In conclusion, while the FMR-based gross yield of 6.28% offers a more attractive return, the actual achievable gross yield may fall closer to the market rate of 4.13%, depending on the local demand for Section 8 housing and the ease of finding qualified tenants. Landlords and small-portfolio investors should weigh these factors carefully when deciding whether to participate in the Section 8 program or to seek market rents.
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.