Location: Isabella County, MI | Metro: Isabella County, MI
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 | $1,280 |
| 1 Bedroom | $1,280 |
| 2 Bedrooms | $1,530 |
| 3 Bedrooms | $2,000 |
| 4 Bedrooms | $2,060 |
| 5 Bedrooms | $2,390 |
| 6 Bedrooms | $2,677 |
| 7 Bedrooms | $2,891 |
| 8 Bedrooms | $3,036 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,530 | $163,629 | 0.94% | C |
| 3BR | $2,000 | $246,310 | 0.81% | C |
| 4BR | $2,060 | $335,219 | 0.61% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 48893 in Michigan reveals interesting insights into the potential investment returns for landlords and small-portfolio investors. Using the Fair Market Rent (FMR) for a 2-bedroom apartment at $1,210 annually and the market rent at $1,603 annually, we can derive the implied gross yields against the median home value of $222,114.
Firstly, with the Section 8 FMR of $1,210 per month, the annual rental income would be $14,520. Dividing this by the median home value of $222,114 gives an implied gross yield of approximately 6.5%. This calculation assumes that the property is rented out at the FMR for the entire year without any vacancy periods.
Secondly, using the market rent figure of $1,603 per month, the annual rental income would be $19,236. When this amount is divided by the median home value, it results in an implied gross yield of about 8.7%. Again, this figure assumes continuous occupancy throughout the year.
Given the 8.0% renter density in ZIP 48893, the reality of finding tenants willing to pay the market rent might be challenging. The renter density suggests that only a small portion of the population is actively seeking rental properties, which could limit the demand for higher-priced rentals. Furthermore, the N/A-day DOM (days on market) indicates that there is either insufficient data or no significant trend in how long properties remain unsold, which does not provide additional insight into the rental market dynamics.
In conclusion, while the market rent scenario offers a higher gross yield of 8.7%, the lower gross yield of 6.5% derived from the Section 8 FMR is likely more reflective of the actual rental environment in ZIP 48893. Landlords and investors should consider these figures carefully when assessing the potential profitability of their investments in this 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.