Location: Anderson, IN | Metro: Anderson, IN HUD Metro FMR Area
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 | $1,050 |
| 1 Bedroom | $1,050 |
| 2 Bedrooms | $1,380 |
| 3 Bedrooms | $1,810 |
| 4 Bedrooms | $1,810 |
| 5 Bedrooms | $2,100 |
| 6 Bedrooms | $2,352 |
| 7 Bedrooms | $2,540 |
| 8 Bedrooms | $2,667 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,050 | $56,964 | 1.84% | A+ |
| 2BR | $1,380 | $74,495 | 1.85% | A+ |
| 3BR | $1,810 | $93,552 | 1.93% | A+ |
| 4BR | $1,810 | $113,364 | 1.6% | A+ |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 46016 in Anderson, IN, provides a clear picture of potential investment returns. The Fair Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at $1110 annually, while the market rent, as indicated by the Zillow Observed Rent Index (ZORI), stands at $935 per month.
To derive the gross yield, we first annualize the market rents. For the FMR scenario, the annual rent is $1110. For the ZORI scenario, the annual rent is $935 multiplied by 12, equating to $11,220. The median home value in ZIP 46016 is $84,924.
The implied gross yield for the FMR scenario is calculated as follows: $1110 divided by $84,924 equals approximately 1.31%. For the ZORI scenario, $11,220 divided by $84,924 equals about 13.21%.
Given that 59.5% of residents in ZIP 46016 are renters and the days on market (DOM) average is 38 days, the ZORI scenario is more realistic. A shorter DOM indicates a higher demand for rental properties, suggesting that landlords can likely charge closer to the market rate rather than the lower FMR.
The stark difference between the 1.31% gross yield under the FMR scenario and the 13.21% gross yield under the ZORI scenario highlights the financial implications of relying on government-subsidized versus market-driven rental income. Small-portfolio investors should consider these factors when evaluating potential investments in ZIP 46016.
Landlords must also factor in the administrative complexities associated with Section 8 housing, including tenant selection criteria and lease terms. While the FMR scenario offers stability through government subsidies, the significantly higher gross yield from market rents suggests a stronger financial position for most real estate portfolios.
In conclusion, the market conditions in ZIP 46016 favor a gross yield closer to the ZORI scenario, providing a more accurate representation of potential returns for landlords and small-portfolio investors.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.