Location: Wabash County, IN | Metro: Cass County, IN
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 | $760 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,210 |
| 4 Bedrooms | $1,420 |
| 5 Bedrooms | $1,647 |
| 6 Bedrooms | $1,845 |
| 7 Bedrooms | $1,993 |
| 8 Bedrooms | $2,093 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,010 | $147,750 | 0.68% | D |
| 3BR | $1,210 | $199,698 | 0.61% | D |
| 4BR | $1,420 | $217,454 | 0.65% | D |
U.S. Census Bureau data (2024)
To analyze the Section 8 cap-rate picture for ZIP code 46926 in Denver, IN, we need to compare the annualized Fair Market Rent (FMR) and market rent against the median home value. The annualized FMR for a 2-bedroom unit is $960 per month, or $11,520 annually. Given the median home value of $189,804, this implies a gross yield of approximately 6.1%. This calculation is based on the formula: Gross Yield = (Annual Income / Property Value) * 100.
On the other hand, the market rent for a 2-bedroom unit is $675 per month, or $8,100 annually. Using the same median home value, this scenario yields a gross income of about 4.3%. Clearly, the Section 8 scenario provides a higher gross yield compared to the market rent scenario.
The higher gross yield under the Section 8 program is due to the government-set rental rates being above the local market rate. However, the reality of the situation must also consider the renter density and the days on market (DOM) statistics. With a renter density of only 6.8%, it suggests that a significant portion of the housing stock is owner-occupied rather than rented out. Additionally, the lack of data on DOM indicates that there might be challenges in accurately assessing the vacancy rate and turnover speed in the area, which are critical factors for determining the actual net operating income (NOI).
Given these considerations, the market rent scenario is likely more reflective of the ground realities for most landlords and small-portfolio investors in ZIP 46926. While the Section 8 program offers a higher gross yield, the lower renter density and potential difficulties in finding tenants willing to participate in the program could affect the overall profitability. Therefore, while the Section 8 program presents an opportunity for higher gross yields, investors should be cautious and consider the local market dynamics before making investment decisions.
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.