Location: Mercer County, OH | Metro: Mercer County, OH
| Unit Size | Monthly FMR |
|---|---|
| Studio | $780 |
| 1 Bedroom | $820 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,290 |
| 4 Bedrooms | $1,420 |
| 5 Bedrooms | $1,647 |
| 6 Bedrooms | $1,845 |
| 7 Bedrooms | $1,993 |
| 8 Bedrooms | $2,093 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 45866 reveals some interesting insights into potential investment opportunities for landlords and small-portfolio investors.
Based on the Fair Market Rent (FMR) for a 2-bedroom apartment set at $1,040 per month for fiscal year 2026, the annualized rental income would be $12,480. With a median home value of $150,742, the implied gross yield for a Section 8 property in this area is approximately 8.3%. This calculation provides a baseline for understanding the return on investment when relying solely on government subsidies.
In contrast, the market rent for a similar 2-bedroom unit is pegged at $1,313 per month according to the Census ACS data. This translates to an annualized rental income of $15,756. Given the same median home value, the gross yield under market conditions jumps to about 10.5%. This higher yield reflects the potential profitability of properties that can command market rates rather than government-set rents.
The gross-yield comparison clearly favors the market rent scenario over the Section 8 rent scenario. However, the reality of the situation must also consider the local rental market dynamics. ZIP 45866 has a renter density of 8.9%, indicating a relatively low proportion of renters compared to homeowners. This factor suggests that while market rents offer a higher gross yield, the demand for rentals might be limited, potentially affecting occupancy rates and thus the actual cash flow.
The Days on Market (DOM) figure being N/A implies either insufficient data or a very active market where listings do not stay long enough to track this metric reliably. Without a specific DOM figure, it's challenging to gauge how quickly properties are rented out, but a highly active market could indicate strong demand for rentals.
Given these factors, the market rent scenario appears more realistic for achieving higher returns, assuming the landlord can maintain full occupancy. The lower renter density might pose challenges for Section 8 properties, but they still offer a steady, if somewhat lower, gross yield of 8.3%. For investors looking to balance risk and reward, understanding these yields and the underlying market conditions is crucial in making informed decisions.
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.