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 | $1,210 |
| 1 Bedroom | $1,350 |
| 2 Bedrooms | $1,690 |
| 3 Bedrooms | $2,060 |
| 4 Bedrooms | $2,230 |
| 5 Bedrooms | $2,587 |
| 6 Bedrooms | $2,897 |
| 7 Bedrooms | $3,129 |
| 8 Bedrooms | $3,285 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,690 | $298,443 | 0.57% | F |
| 3BR | $2,060 | $487,964 | 0.42% | F |
| 4BR | $2,230 | $661,879 | 0.34% | F |
| 5BR | $2,587 | $920,567 | 0.28% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate scenario for ZIP 48306 in Oakland, MI, can be analyzed using the Fair Market Rent (FMR) and the Zillow Observed Rental Index (ZORI) for a 2-bedroom apartment. The annualized FMR for a 2BR in ZIP 48306 is $1520 per month, or $18,240 annually. The ZORI for a 2BR is $1,891 per month, or $22,692 annually. Given the median home value of $589,491, we can calculate the implied gross yield for both rental scenarios.
Using the FMR, the gross yield is calculated as follows:
With the ZORI, the gross yield is:
Given the 7.2% renter density and an average Days on Market (DOM) of 22 days, the FMR scenario is less likely to be realistic for landlords and small-portfolio investors. The low renter density suggests that finding tenants who qualify for Section 8 might be challenging. Moreover, a short DOM indicates a competitive market where properties are rented quickly, likely at rates closer to the ZORI rather than the lower FMR. Therefore, while the FMR provides a conservative estimate, the ZORI is a more accurate reflection of potential rental income in ZIP 48306.
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.