Location: Detroit-Warren-Livonia, MI | Metro: Detroit-Warren-Livonia, MI HUD Metro FMR Area
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 | $1,300 |
| 1 Bedroom | $1,450 |
| 2 Bedrooms | $1,810 |
| 3 Bedrooms | $2,200 |
| 4 Bedrooms | $2,390 |
| 5 Bedrooms | $2,772 |
| 6 Bedrooms | $3,105 |
| 7 Bedrooms | $3,353 |
| 8 Bedrooms | $3,521 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,450 | $249,935 | 0.58% | F |
| 2BR | $1,810 | $297,275 | 0.61% | D |
| 3BR | $2,200 | $339,321 | 0.65% | D |
| 4BR | $2,390 | $478,813 | 0.5% | F |
| 5BR | $2,772 | $599,804 | 0.46% | F |
U.S. Census Bureau data (2024)
The analysis for landlords and small-portfolio investors in ZIP code 48067, located in Royal Oak, Michigan, reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1760, while the market rent, measured by the Zillow Observed Rent Index (ZORI), stands at $2047. This means there is a gap of $287, or approximately 16%, between what the government deems as fair market rent and the prevailing open-market rental rates.
Given that the FMR is lower than the market rent, landlords should be aware that housing voucher tenants will occupy properties at rates below the open-market levels. This can translate into a lower immediate cash flow per unit but also provides a stable and reliable source of income due to the federal guarantee of timely payments. In Royal Oak, where 32.5% of residents are renters and the median home value is $341,580, the decision to participate in the Section 8 program must consider the broader economic context. The median income in the area is $112,840, indicating that while some residents may struggle to afford market rents, others might have the financial capacity to pay higher rates.
Investing in Section 8 in this ZIP code can still be a yield play, especially if you manage costs effectively. However, it is important to understand that accepting voucher tenants means forfeiting the opportunity to collect market-rate rents. Landlords should weigh the benefits of guaranteed income against the potential for higher returns by renting to market-rate tenants. Additionally, the property's location, condition, and amenities will influence whether it attracts market-rate tenants or remains primarily a Section 8 option.
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.