Location: LaGrange County, IN | Metro: Elkhart-Goshen, IN MSA
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 | $1,020 |
| 1 Bedroom | $1,060 |
| 2 Bedrooms | $1,270 |
| 3 Bedrooms | $1,680 |
| 4 Bedrooms | $1,780 |
| 5 Bedrooms | $2,065 |
| 6 Bedrooms | $2,313 |
| 7 Bedrooms | $2,498 |
| 8 Bedrooms | $2,623 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,060 | $147,862 | 0.72% | D |
| 2BR | $1,270 | $210,632 | 0.6% | D |
| 3BR | $1,680 | $294,566 | 0.57% | F |
| 4BR | $1,780 | $375,483 | 0.47% | F |
| 5BR | $2,065 | $565,092 | 0.37% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate scenario for ZIP 46528 (Goshen, IN) provides a clear picture when comparing the annualized Fair Market Rent (FMR) for a 2-bedroom unit at $1140 and the market rent at $1,051 (both figures for FY 2024).
Using the median home value of $303,715, the implied gross yield can be calculated. For the Section 8 FMR of $1140, the annual rental income would be $13,680. Dividing this by the median home value gives an implied gross yield of approximately 4.5%. In contrast, the market rent of $1,051 translates to an annual rental income of $12,612, resulting in an implied gross yield of about 4.15%.
The 19.7% renter density suggests that while Goshen has a significant portion of renters, it is still predominantly owner-occupied. This could affect the demand for rental properties, including those participating in the Section 8 program. However, the N/A-day DOM (days on market) indicates that there is no readily available data on how quickly rental units are typically leased in this area, making it difficult to gauge the speed of occupancy turnover.
Given these figures, the Section 8 FMR scenario offers a slightly higher gross yield compared to the market rent scenario. The higher yield under the Section 8 program might attract investors looking for stable, government-backed rental income. However, the actual choice between the two scenarios depends on factors such as the ease of finding qualified tenants, maintenance costs, and the overall management of the property.
The higher gross yield under the Section 8 program does not necessarily mean it is more realistic. Landlords must consider the administrative overhead and potential limitations associated with the Section 8 program, such as rent ceilings and tenant screening processes. Given the market rent figure, it appears that the local rental market supports a competitive rate close to the FMR, suggesting that landlords might find a balance between the stability offered by Section 8 and the flexibility of market rents.
In conclusion, while the Section 8 program provides a marginally better gross yield at 4.5%, the reality of the situation should also take into account the local rental dynamics and the specific needs of landlords and small-portfolio investors. The market rent scenario, with a gross yield of 4.15%, reflects the current demand and could be a more practical option depending on the landlord's preference for program participation versus market-driven tenancy.
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.