Location: Flint, 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 | $1,100 |
| 1 Bedroom | $1,290 |
| 2 Bedrooms | $1,560 |
| 3 Bedrooms | $1,910 |
| 4 Bedrooms | $2,200 |
| 5 Bedrooms | $2,552 |
| 6 Bedrooms | $2,858 |
| 7 Bedrooms | $3,087 |
| 8 Bedrooms | $3,241 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,560 | $261,408 | 0.6% | F |
| 3BR | $1,910 | $352,174 | 0.54% | F |
| 4BR | $2,200 | $435,023 | 0.51% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 48438 (Goodrich, MI) reveals interesting insights into potential investment opportunities. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for FY 2024 is set at $1550 per month, while the Census ACS reports a market rent of $1,313 for the same type of unit.
To derive the cap rate, we must first calculate the annualized rental income for both scenarios. For the FMR scenario, the annual rent would be $1550 multiplied by 12 months, equating to $18,600. Dividing this figure by the median home value of $366,203 gives an implied gross yield of approximately 5.08%. In the case of the market rent, the annual rent is $1,313 multiplied by 12, resulting in $15,756 annually. This translates to an implied gross yield of about 4.30% when divided by the median home value.
The FMR-based gross yield of 5.08% is higher than the market rent-based gross yield of 4.30%, indicating a potentially better return for Section 8 properties. However, the reality of these yields depends significantly on the actual occupancy rates and management costs, which are not covered here. It's also important to consider that the renter density in Goodrich, MI, is only 5.0%, suggesting that the demand for rental properties, including those participating in the Section 8 program, is relatively low compared to other areas.
The N/A-day Days on Market (DOM) indicates incomplete data regarding how long it takes for properties to sell or rent. This lack of information could suggest either a stable market where properties move quickly, or a slow market where sales and rentals take longer. Given the low renter density, it is likely that the market rent scenario is more realistic, as it reflects the actual rental rates landlords can expect in the current market conditions.
In conclusion, while the Section 8 program offers a higher gross yield based on the FMR, the actual performance for landlords and small-portfolio investors in ZIP 48438 should be considered in light of the lower renter density and the potential challenges in finding tenants willing to pay the higher Section 8 rates. The market rent scenario provides a more grounded expectation for the gross yield, aligning closely with the economic realities of the area.
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.