Location: Henry County, IN | Metro: Henry County, IN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $940 |
| 1 Bedroom | $950 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,420 |
| 4 Bedrooms | $1,560 |
| 5 Bedrooms | $1,810 |
| 6 Bedrooms | $2,027 |
| 7 Bedrooms | $2,189 |
| 8 Bedrooms | $2,298 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 47388 reveals a significant opportunity for landlords and small-portfolio investors within the Section 8 program. The Fair Market Rent (FMR) set by the Housing and Urban Development (HUD) for the metro area in fiscal year 2026 is $1,110, whereas the actual market rent based on Census ACS data stands at $971. This creates a gap of $139, or approximately 12.5%, favoring landlords who accept Section 8 vouchers.
The higher FMR compared to the market rent means that voucher tenants can potentially pay more than what the open market demands. For landlords, this makes Section 8 properties a yield play, where they can achieve better rental income than the average market rate. In ZIP 47388, where only 8.3% of residents are renters, the competition for quality rental units is relatively low, making it easier for landlords to attract voucher holders willing to pay the higher FMR.
Moreover, the median home value in the area is $156,061, indicating a middle-class neighborhood where homeownership is common but not universal. The median income of $48,125 suggests that many residents might find it challenging to afford homeownership, thereby relying on affordable rental options. Accepting Section 8 vouchers can be a strategic move for landlords, as it taps into a reliable source of rental income backed by government subsidies.
It's important to note that while the FMR is higher than the market rent, the cost of maintaining properties below the open-market rates must be considered. Landlords should ensure that the property meets all HUD requirements and is maintained at a standard that attracts and retains voucher tenants. Additionally, the financial stability provided by the government ensures a steady stream of income, even if it's slightly below what could be charged in a fully competitive market.
In summary, the gap between FMR and market rent in ZIP 47388 presents a clear advantage for landlords who participate in the Section 8 program. It allows them to capitalize on a yield play scenario, leveraging government subsidies to secure rental income that exceeds local market rates. Given the context of the ZIP code, this strategy can be particularly effective in a region where rental demand is lower and homeownership is prevalent.
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.