Location: Indianapolis-Carmel, IN | Metro: Indianapolis-Carmel, 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 | $940 |
| 1 Bedroom | $1,060 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,580 |
| 4 Bedrooms | $1,930 |
| 5 Bedrooms | $2,239 |
| 6 Bedrooms | $2,508 |
| 7 Bedrooms | $2,709 |
| 8 Bedrooms | $2,844 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,220 | $216,482 | 0.56% | F |
| 3BR | $1,580 | $326,239 | 0.48% | F |
| 4BR | $1,930 | $387,835 | 0.5% | F |
U.S. Census Bureau data (2024)
The ZIP code 46118, located in Clayton, IN, has a population of 4,709 residents. With 16.2% of the population being renters, it indicates that this area is not heavily dominated by rental properties but still has a notable portion of tenants. The median household income stands at $78,298, which provides a basis for understanding the financial capacity of potential tenants.
The typical market rent in this area is $982 per month. This amount represents approximately 12.5% of the median household income when considering annualized rent costs. In comparison, the Fair Market Rent (FMR) set for FY 2024 is $1230, indicating that the actual market rent is below the federally determined threshold for this area. This suggests that the rental market is somewhat affordable relative to the income levels of the residents.
Given the relatively low percentage of renters and the median income level, landlords in ZIP 46118 can expect a mix of tenants, including those who might rely on housing vouchers due to the disparity between market rent and FMR. However, the overall demand for vouchers may not be as high as in areas with a larger percentage of renters or lower median incomes.
The tenant profile landlords should anticipate includes individuals and families who are likely to have some disposable income beyond rent. Given the median income, these tenants could potentially afford higher rents than the current market rate, though they would still be within reach of the $982 average. Landlords might also encounter tenants using housing vouchers, especially those whose income is closer to the federal poverty guidelines, though the number of such tenants is expected to be moderate rather than overwhelming.
In summary, while ZIP 46118 is not a renter-heavy area, it does present opportunities for landlords and small-portfolio investors with a manageable mix of voucher users and tenants paying market rates. The affordability of the market rent compared to both the median income and the FMR suggests a balanced environment for both tenants and property owners.
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.