Location: Hart County, KY | Metro: Green County, KY
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 | $660 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,160 |
| 4 Bedrooms | $1,280 |
| 5 Bedrooms | $1,485 |
| 6 Bedrooms | $1,663 |
| 7 Bedrooms | $1,796 |
| 8 Bedrooms | $1,886 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,160 | $236,857 | 0.49% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 42722 reveals interesting insights into potential investment opportunities. To start, the Fair Market Rent (FMR) for a two-bedroom apartment in the metro area for fiscal year 2026 is set at $900 per month. Annualizing this figure yields a yearly rental income of $10,800. Given the median home value in the area stands at $197,815, the implied gross yield based on the FMR would be approximately 5.46%. This calculation is derived by dividing the annual rental income by the median home value.
In contrast, the Census ACS reports a market rent of $504 per month for the same property type. When annualized, this translates to an annual rental income of $6,048. Using the same median home value, the implied gross yield based on the market rent would be about 3.06%. This lower yield reflects the actual market conditions rather than government-set rates.
Evaluating these scenarios against the local context provides further clarity. The ZIP code 42722 has a renter density of 51.2%, indicating a significant portion of the population relies on rental housing. While the exact number of days on market (DOM) isn’t specified, the high renter density suggests that there could be strong demand for rental properties, particularly those that qualify for Section 8 assistance.
The higher gross yield of 5.46% based on the FMR is more attractive but less realistic compared to the market rent scenario. Realistically, landlords should expect to achieve closer to the market rent gross yield of 3.06%. However, the stability provided by Section 8 tenants, who have their rent subsidized by the government, can offset some of the risks associated with lower yields. Additionally, the 51.2% renter density supports the likelihood of finding reliable tenants quickly, which is crucial for maintaining occupancy and cash flow.
In conclusion, while the FMR-based yield is theoretically higher, the market rent-based yield offers a more accurate reflection of what landlords can realistically expect in ZIP code 42722. The combination of government subsidies and strong local demand makes Section 8 properties a viable option for small-portfolio investors looking for steady returns and low vacancy rates.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.