Location: Pike County, OH | Metro: Brown County, OH HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,530 |
| 5 Bedrooms | $1,775 |
| 6 Bedrooms | $1,988 |
| 7 Bedrooms | $2,147 |
| 8 Bedrooms | $2,254 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 45133 in Hillsboro, Ohio, provides insight into potential investment yields. To start, the Fair Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at $880 per month. If we use this figure to calculate the annualized rental income, it comes out to $10,560 annually. The median home value in the area is $206,935. Using these figures, the implied gross yield for a Section 8 property would be approximately 5.10%. This is calculated by dividing the annualized rental income by the median home value: $10,560 / $206,935 = 0.0510.
In contrast, the market rent for a two-bedroom apartment in ZIP 45133 is reported at $767 per month based on Census ACS data. Annualizing this market rent gives us an annual income of $9,204. When we compare this to the median home value, the implied gross yield drops to about 4.45%, calculated as $9,204 / $206,935 = 0.0445.
The gross-yield comparison between the Section 8 scenario and the market rent scenario shows that Section 8 properties offer a higher gross yield in ZIP 45133. However, the reality of investing in this area must also consider the local rental market dynamics. With a 26.2% renter density and a 45-day Days on Market (DOM), it's evident that the local rental market is moderately competitive. Landlords should note that while the Section 8 program guarantees a steady income, it also comes with regulatory constraints and potentially longer vacancy periods due to the application process.
Given the data, the Section 8 gross yield of 5.10% is more reflective of the guaranteed income stream, whereas the market rent gross yield of 4.45% represents the broader rental market conditions. Investors should weigh these factors carefully when deciding whether to participate in the Section 8 program or aim for market rents. The choice will depend on their risk tolerance and the importance they place on guaranteed income versus the flexibility of 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.