Location: Brown County, OH | Metro: Brown County, OH HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $830 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,690 |
| 5 Bedrooms | $1,960 |
| 6 Bedrooms | $2,195 |
| 7 Bedrooms | $2,371 |
| 8 Bedrooms | $2,490 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 45131 presents an interesting scenario when comparing federally mandated Fair Market Rents (FMRs) to actual market rents. For a two-bedroom unit, the annualized FMR for fiscal year 2024 is set at $1070 per month, while the Census ACS data indicates a market rent of $619 per month.
To calculate the implied gross yield, we need to consider the rental income relative to the property's value. However, the median home value for ZIP 45131 is not available, which complicates a direct comparison. Despite this, we can still analyze the potential yields based on the monthly rents provided.
If we assume that the property's value is consistent with typical investment metrics, the higher monthly rent of $1070 under the Section 8 program would result in a significantly better gross yield compared to the lower market rent of $619. This is because the gross yield is directly proportional to the rental income generated. The higher the monthly rent, the higher the gross yield.
Given the 34.1% renter density in ZIP 45131, it's important to note that a significant portion of the population is already renting, indicating a demand for affordable housing. The N/A-day Days on Market (DOM) suggests that properties are either selling quickly or that there isn't enough recent data to determine an average DOM, which could imply strong local real estate market dynamics.
In terms of realism, the $1070 Section 8 rent is likely to be more stable and predictable due to government backing, making it a safer bet for long-term investors. However, the $619 market rent reflects current tenant preferences and might be more reflective of the actual rental market conditions. The choice between these two scenarios depends on the investor's risk tolerance and investment goals.
For those focused on steady, government-backed income, the higher Section 8 rent provides a more attractive gross yield. Conversely, for investors looking to capture market dynamics and possibly benefit from future increases in market rent, the lower $619 figure might be more relevant. Regardless of the chosen rent, the cap rate calculation should be adjusted according to the specific property value and other costs associated with ownership.
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.