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 | $870 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,470 |
| 4 Bedrooms | $1,600 |
| 5 Bedrooms | $1,856 |
| 6 Bedrooms | $2,079 |
| 7 Bedrooms | $2,245 |
| 8 Bedrooms | $2,357 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,210 | $165,939 | 0.73% | D |
| 3BR | $1,470 | $204,616 | 0.72% | D |
| 4BR | $1,600 | $244,319 | 0.65% | D |
| 5BR | $1,856 | $273,362 | 0.68% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 48192 in Wyandotte, MI, reveals a nuanced investment landscape. The Fair Market Rent (FMR) for a 2-bedroom unit in FY 2024 is set at $1,100 per month, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1,251 monthly. Using these figures, we can derive the gross yield for both scenarios.
First, let's calculate the annualized income based on the FMR. At $1,100 per month, the annual rental income would be $13,200. Given the median home value in the area is $186,216, the implied gross yield when relying on Section 8 would be approximately 7.1%. This is derived from dividing the annual rental income ($13,200) by the median home value ($186,216).
Next, using the ZORI market rent figure of $1,251 per month, the annual rental income jumps to $15,012. The gross yield under this scenario, assuming the same median home value, improves to about 8.1%. This calculation reflects the potential earnings if a property were rented at market rates rather than through Section 8.
Given the 26.3% renter density in ZIP 48192, it suggests that a significant portion of the population is already renting, indicating a stable demand for rental properties. Additionally, the 19-day Days on Market (DOM) implies that homes are moving quickly once listed, suggesting strong local interest in housing.
While the market rent scenario offers a higher gross yield, the reality of Section 8 participation must be considered. The program provides a steady stream of income but often comes with administrative complexities and maintenance standards that can impact profitability. However, the lower gross yield of 7.1% from the FMR still represents a solid return for many investors, especially those seeking stable, long-term tenants.
In conclusion, the gross yield comparison between the two scenarios clearly favors market rent at 8.1% over the Section 8 rate at 7.1%. Yet, the decision to participate in Section 8 should factor in the local rental dynamics, including the quick turnover indicated by the 19-day DOM, and the financial stability provided by government-backed rent payments.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.