Location: Ripley County, IN | Metro: Ripley 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 | $910 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,570 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,210 | $209,756 | 0.58% | F |
| 3BR | $1,570 | $293,791 | 0.53% | F |
| 4BR | $1,590 | $340,421 | 0.47% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 47023 (Holton, IN) reveals some interesting insights. To begin with, the annualized Fair Market Rent (FMR) for a 2-bedroom apartment in the Holton area for fiscal year 2026 is set at $1,240 per month, according to the metropolitan guidelines. This translates to an annual rental income of $14,880. When compared to the median home value of $269,035, the implied gross yield for a property under Section 8 would be approximately 5.53%. This calculation is derived from the formula: Gross Yield = (Annual Rental Income / Property Value).
In contrast, the market rent for a 2-bedroom apartment based on Census ACS data stands at $887 per month. Annualizing this figure gives us an annual rental income of $10,644. Using the same median home value of $269,035, the implied gross yield for a market-rent scenario is roughly 3.96%. Clearly, the Section 8 scenario offers a higher gross yield.
However, the decision on which scenario is more realistic should consider the local rental market dynamics. With a renter density of 20.9%, it's evident that the majority of homeowners in Holton prefer owning their homes rather than renting them out. This could imply that the demand for rental properties, including those in the Section 8 program, might be lower than in areas with higher renter populations. The lack of data on days on market (DOM) suggests that there isn't enough information to determine how quickly properties are rented out, which is crucial for understanding the liquidity and potential vacancy rates in the area.
Given these factors, while the Section 8 program provides a higher gross yield at 5.53%, the market rent scenario at 3.96% may be more reflective of the actual rental environment in Holton. Landlords and small-portfolio investors should weigh the benefits of the higher yield against the potential challenges of lower demand and possibly longer vacancy periods. Both scenarios offer a glimpse into the rental landscape of Holton, but the final choice will depend on individual investment goals and risk tolerance.
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.