Location: Gallia County, OH | Metro: Gallia County, OH
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,320 |
| 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 45674 reveals interesting dynamics between government-subsidized rental income and market-driven rental rates. For the fiscal year 2026, the Fair Market Rent (FMR) for a 2-bedroom apartment in the metropolitan area is set at $970 annually. This figure represents the maximum amount that a landlord can charge for a Section 8 voucher holder. In contrast, the Census ACS data indicates a market rent of $391 for a similar unit.
To derive the implied gross yield for both scenarios, we need to consider the annual rent and compare it to the median home value. However, the median home value for ZIP 45674 is not available, making direct comparisons challenging. Nonetheless, the gross yields can be calculated based on the given annual rents. For the Section 8 scenario, the gross yield would be based on an annual rent of $970, while the market scenario would use an annual rent of $391.
The gross yield for a Section 8 property can be estimated using the annualized FMR. Given the lack of a specific median home value, let's assume a hypothetical median home value to illustrate the point. If the median home value were hypothetically $100,000, the gross yield for a Section 8 property would be approximately 0.97%, calculated as $970 divided by $100,000. For a property rented at market rates, using the same hypothetical median home value, the gross yield would drop to approximately 0.39%, calculated as $391 divided by $100,000.
Given the 87.7% renter density in ZIP 45674, it is evident that the majority of residents are renters, which makes properties attractive to those seeking rental income. The days on market (DOM) being not available suggests either a very active market where properties are quickly leased or a less active market where listings might not be updated regularly. Despite the lack of specific DOM data, the high renter density implies that rental properties could find tenants relatively easily, whether through market rates or Section 8 vouchers.
In terms of which scenario is more realistic, the Section 8 scenario with a gross yield of 0.97% appears more favorable compared to the market scenario with a gross yield of 0.39%. The higher yield in the Section 8 scenario is due to the guaranteed rent payment structure, which is backed by the federal government, providing stability and predictability to the landlord's cash flow. While the market scenario offers lower risk in terms of vacancy rates, the significantly lower gross yield means less income relative to the investment made.
Landlords and small-portfolio investors should consider the trade-offs between the two scenarios. The Section 8 program provides a steady income stream, albeit with some administrative overhead, whereas market rentals offer potentially higher vacancy risks but also the possibility of adjusting rents based on market conditions. Given the data, the Section 8 option presents a more robust financial picture, especially considering the high renter density in the area.
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.