Location: Spencer County, IN | Metro: Spencer County, IN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,360 |
| 4 Bedrooms | $1,370 |
| 5 Bedrooms | $1,589 |
| 6 Bedrooms | $1,780 |
| 7 Bedrooms | $1,922 |
| 8 Bedrooms | $2,018 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 47635, located in Rockport, Indiana, reveals some interesting dynamics when comparing the Federal Market Rent (FMR) to the actual market rent. The annualized 2BR FMR for fiscal year 2026 is set at $960, while the Census ACS reports an average market rent of $679 per month.
To calculate the implied gross yield for both scenarios, we first need to annualize these figures. For the FMR scenario, multiplying $960 by 12 gives us an annual rental income of $11,520. Dividing this by the median home value of $209,681 yields an implied gross yield of approximately 5.5%. In contrast, the market rent of $679 per month translates to an annual rental income of $8,148. Dividing this by the median home value results in an implied gross yield of about 3.9%.
The difference between these two gross yields is significant. At 5.5%, the FMR scenario suggests a higher potential return on investment, but it's important to consider the realities of the local rental market. Given that only 29.6% of households in Rockport are renters, securing long-term Section 8 tenants might be challenging. Additionally, the lack of data on days on market (DOM) indicates uncertainty about how quickly properties can be leased, further complicating the investment decision.
In conclusion, while the FMR scenario provides a more attractive gross yield, the actual market conditions suggest that the 3.9% gross yield based on market rent is more realistic. Landlords and small-portfolio investors should factor in the lower renter density and potential difficulties in leasing when evaluating the feasibility of participating in the Section 8 program in Rockport, Indiana.
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.