Location: Kalamazoo-Portage, MI | Metro: Kalamazoo-Portage, MI MSA
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 | $800 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,050 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,480 |
| 5 Bedrooms | $1,717 |
| 6 Bedrooms | $1,923 |
| 7 Bedrooms | $2,077 |
| 8 Bedrooms | $2,181 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $920 | $101,981 | 0.9% | C |
| 2BR | $1,050 | $185,065 | 0.57% | F |
| 3BR | $1,400 | $249,657 | 0.56% | F |
| 4BR | $1,480 | $280,840 | 0.53% | F |
U.S. Census Bureau data (2024)
The classification of ZIP 49006 in Kalamazoo, MI, on the axes of yield and stability reveals a unique investment scenario for landlords and small-portfolio investors. The Federal Market Rent (FMR) for this area in fiscal year 2024 is set at $1,010, while the average market rent stands at $1,511. This indicates a potential rental yield that is above the federal guidelines, suggesting a relatively high-yield market.
To understand the yield better, we must consider the median home value in ZIP 49006, which is $237,883. Given the FMR of $1,010 and the market rent of $1,511, an investor could potentially see a higher return on investment by renting properties at market rates rather than the FMR. However, it's important to note that the FMR serves as a benchmark for affordability programs, and market conditions can vary widely.
Moving onto stability, ZIP 49006 has a significant portion of its population as renters, with 65.0% of residents being tenants. This high percentage of renters suggests a stable demand for rental housing. However, the lack of data on days on market (DOM) for rentals indicates that there might be some uncertainty regarding how quickly properties can be leased. Additionally, the median household income of $43,639 provides insight into the economic profile of the area, which can influence the ability of residents to afford higher rents.
Based on these figures, ZIP 49006 appears to be a market that offers a balance between yield and stability. While it presents opportunities for higher-than-average rental yields, the substantial percentage of renters ensures a steady demand for housing. However, the absence of DOM data means that the leasing process could pose challenges, making it less ideal for a high-yield/low-stability "flip-style" market. Instead, it leans more towards a steady-cashflow zone, where landlords can expect consistent returns but must also be prepared for the possibility of slower turnover.
In conclusion, ZIP 49006 in Kalamazoo, MI, offers a moderate yield environment with a strong base of renters, positioning it as a middle-ground option for real estate investments. Landlords and small-portfolio investors should weigh the potential for higher-than-FMR rents against the need for patience in the leasing process.
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.