Location: Alpena County, MI | Metro: Alcona County, MI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $740 |
| 1 Bedroom | $820 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,340 |
| 4 Bedrooms | $1,620 |
| 5 Bedrooms | $1,879 |
| 6 Bedrooms | $2,104 |
| 7 Bedrooms | $2,272 |
| 8 Bedrooms | $2,386 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap rate for ZIP code 48762 provides a critical insight into the potential investment returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for fiscal year 2026 is set at $980 per month, based on the metro rate. This figure annualizes to $11,760. However, the market rent is listed as N/A, indicating that there is insufficient data to provide an accurate market rent estimate for this ZIP code.
To calculate the implied gross yield for the Section 8 scenario, we divide the annualized FMR by the median home value. For ZIP 48762, this calculation is as follows:
$11,760 / $210,374 = 0.0559 or 5.59%
This implies that if a landlord were to use the property exclusively for Section 8 tenants, they could expect a gross yield of approximately 5.59%. This yield is derived solely from the rental income and does not account for expenses such as maintenance, insurance, or property taxes.
In contrast, the lack of market rent data makes it challenging to assess the potential gross yield for non-Section 8 tenants. Typically, market rents can be higher than FMRs, leading to a potentially better gross yield. However, without specific market rent figures, this comparison remains speculative.
Given the 2.9% renter density in ZIP 48762, it's important to note that the majority of homeownership in this area is likely owner-occupied rather than rented out. The N/A-day Days on Market (DOM) further complicates the assessment of how quickly properties might turn over, which is crucial for understanding the stability and predictability of rental income.
While the Section 8 scenario offers a clear and calculable gross yield of 5.59%, the absence of market rent data means that direct comparisons cannot be made. However, historically, market rents tend to offer higher yields compared to Section 8 rents, suggesting that the actual gross yield for non-Section 8 tenants could be higher than 5.59%. The decision to participate in the Section 8 program should consider not only the gross yield but also the stability of long-term tenants and the administrative requirements of the program.
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.