Location: Putnam County, 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 | $1,120 |
| 1 Bedroom | $1,280 |
| 2 Bedrooms | $1,480 |
| 3 Bedrooms | $1,990 |
| 4 Bedrooms | $2,390 |
| 5 Bedrooms | $2,772 |
| 6 Bedrooms | $3,105 |
| 7 Bedrooms | $3,353 |
| 8 Bedrooms | $3,521 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,480 | $251,886 | 0.59% | F |
| 3BR | $1,990 | $319,701 | 0.62% | D |
| 4BR | $2,390 | $461,179 | 0.52% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 46121, Coatesville, IN, reveals a challenging investment landscape. Using the Fair Market Rent (FMR) for a 2BR unit at $1390 per month for FY 2024, the annualized income would be $16,680. Against the median home value of $319,593, this translates into an implied gross yield of approximately 5.2%. Conversely, using the market rent figure of $1,250 per month from the Census ACS, the annualized income drops to $15,000, resulting in a gross yield of about 4.7%.
The difference between these two yields highlights the potential benefits of participating in the Section 8 program. However, the choice between them depends on the realities of the local rental market and the specifics of the Section 8 program. Given that only 2.0% of the population are renters, the demand for rental properties, including those in the Section 8 program, is relatively low. This suggests that landlords might find it difficult to maintain a steady stream of tenants, particularly those who qualify for Section 8.
The N/A-day DOM (Days on Market) indicates that there isn't sufficient data to determine how long properties typically stay on the market before being rented out. This could mean that either rental listings are quickly filled, or there's a lack of activity in the rental market. Without precise DOM data, it's challenging to predict vacancy rates, which are crucial for calculating the net operating income (NOI).
Given the low renter density, the $1,250 market rent scenario appears more realistic for most investors. While the Section 8 FMR of $1390 offers a higher gross yield, the difficulty in finding and retaining qualified tenants could erode the expected returns. Landlords should consider the broader economic context and the stability of tenant qualifications when deciding whether to participate in the Section 8 program.
In summary, while the Section 8 program offers a higher gross yield, the low renter density and uncertain DOM data suggest that the market rent scenario is more practical for most investment strategies. Investors should weigh the benefits of higher rents against the challenges of maintaining occupancy levels.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.