Location: Elkhart-Goshen, IN | Metro: Elkhart-Goshen, IN MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,070 |
| 1 Bedroom | $1,110 |
| 2 Bedrooms | $1,330 |
| 3 Bedrooms | $1,750 |
| 4 Bedrooms | $1,860 |
| 5 Bedrooms | $2,158 |
| 6 Bedrooms | $2,417 |
| 7 Bedrooms | $2,610 |
| 8 Bedrooms | $2,741 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 46526 (Goshen, IN) reveals a distinct gap between the Federal Market Rent (FMR) and the market rent rates. With an annualized 2BR FMR set at $1130 for FY 2024, the implied gross yield for a property in this category would be approximately 1.71%. This is calculated by taking the monthly FMR of $1130, multiplying it by 12 months, and dividing that figure by the median home value of $260,870.
In contrast, using the Zillow Observed Rental Index (ZORI) rate of $998 per month, the implied gross yield drops significantly to about 1.44%. The calculation here involves multiplying the ZORI rate by 12 and dividing the result by the median home value.
Given the 31.2% renter density and the average days on market (DOM) of 13 days, the scenario based on the ZORI rate is more realistic. A lower DOM indicates a quicker rental process, suggesting that properties are likely to be rented closer to market rates rather than higher FMR rates. Additionally, the renter density implies that while there is a substantial portion of renters, the majority of the housing market still operates under private ownership, further supporting the use of market rates for a more accurate yield estimation.
To summarize, the gross yields derived from the FMR and ZORI rates are 1.71% and 1.44%, respectively. Landlords and small-portfolio investors should consider the ZORI-based yield more reflective of actual rental income potential when evaluating properties in Goshen, IN. The FMR yield can serve as a benchmark for government-subsidized rental programs, but the market conditions indicate a preference for the ZORI rate in determining the true cap rate and investment potential.
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.