Location: Gratiot County, MI | Metro: Gratiot County, MI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $800 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,600 |
| 5 Bedrooms | $1,856 |
| 6 Bedrooms | $2,079 |
| 7 Bedrooms | $2,245 |
| 8 Bedrooms | $2,357 |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 48806 is based on the significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the area, as set by the Department of Housing and Urban Development for fiscal year 2026, is $1,140. In contrast, the Census ACS data shows that the average market rent stands at $937. This creates a gap of $203, which represents approximately a 21.6% difference between what voucher holders can pay and the typical rent charged.
Given that the FMR exceeds the market rent, landlords and small-portfolio investors can leverage this situation to increase their yields. By accepting Section 8 vouchers, they ensure a steady stream of rental income that is higher than the prevailing market rate. This strategy is particularly beneficial in an environment where only 21.3% of residents are renters, suggesting a smaller pool of potential tenants. Moreover, with a median income of $61,375, many residents may find it challenging to afford market rents without assistance, making the voucher program a reliable source of tenants.
The median home value in the area is $195,499, indicating a relatively stable housing market. However, the lower market rent compared to FMR means that landlords can attract tenants who receive government subsidies, thereby securing a higher rental income than what might be obtained from non-subsidized tenants. This makes ZIP 48806 a favorable location for investors interested in maximizing returns through the Section 8 program.
While there may be administrative burdens associated with participating in the voucher program, the financial benefits outweigh these challenges. Landlords can expect a consistent rental income that is above the local market average, thus improving the overall yield on their investment properties. Additionally, the guaranteed payment from the government helps mitigate risks related to tenant default, making it a safer option for those looking to stabilize cash flows.
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.