Location: Barry County, MI | Metro: Battle Creek, 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 | $910 |
| 1 Bedroom | $1,000 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,570 |
| 4 Bedrooms | $1,820 |
| 5 Bedrooms | $2,111 |
| 6 Bedrooms | $2,364 |
| 7 Bedrooms | $2,553 |
| 8 Bedrooms | $2,681 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,210 | $150,803 | 0.8% | C |
| 3BR | $1,570 | $204,414 | 0.77% | D |
| 4BR | $1,820 | $234,434 | 0.78% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 49017 in Battle Creek, MI, reveals an interesting investment landscape. To begin, let's annualize the Fair Market Rent (FMR) and Zillow Observed Rent Index (ZORI) figures for a two-bedroom property. The FMR for a 2BR in FY 2024 is set at $1040 per month, equating to an annual rent of $12,480. In contrast, the ZORI, which reflects market rents, stands at $1,005 per month, or $12,060 annually.
With these figures, we can calculate the implied gross yield for both scenarios using the median home value of $181,999. For the FMR scenario, the gross yield is calculated as follows:
The difference between the two yields is marginal, with the FMR scenario offering a slightly higher gross yield at 6.86%, compared to the market rent scenario at 6.63%. However, when considering the reality of the local rental market, it is important to note that only 25.3% of residents are renters, indicating a relatively low demand for rental properties. Additionally, the average days on market (DOM) for rental listings is 52 days, suggesting that finding tenants willing to pay the FMR might be challenging.
Given these factors, the market rent scenario appears more realistic for potential investors. While the FMR provides a benchmark, the actual rental rates might struggle to meet this level due to the lower renter density and competitive market conditions. Therefore, investors should prepare to operate closer to the market rent of $1,005 per month, resulting in a gross yield of 6.63%. This figure should be used as a starting point for further analysis, including operating expenses and vacancy rates, to determine the net operating income (NOI) and ultimately the cap rate for Section 8 properties in Battle Creek, MI.
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.