Location: Kalamazoo-Portage, MI | Metro: Kalamazoo-Portage, MI MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $890 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,160 |
| 3 Bedrooms | $1,550 |
| 4 Bedrooms | $1,640 |
| 5 Bedrooms | $1,902 |
| 6 Bedrooms | $2,130 |
| 7 Bedrooms | $2,300 |
| 8 Bedrooms | $2,415 |
The analysis for ZIP code 49019 in Michigan reveals some limitations due to missing data points, specifically the median home value and market rent. However, we can still provide insight into the potential Section 8 cap-rate scenario using the available Fair Market Rent (FMR) figures.
For a two-bedroom unit, the annualized FMR based on the FY 2024 data is $1060 per month, equating to $12,720 annually. This figure is crucial for understanding the rental income potential under the Section 8 program. Without the median home value, we cannot calculate an exact cap rate, but we can discuss the implied gross yield.
In the absence of market rent data, it's challenging to compare the Section 8 rent against what landlords might typically receive. However, the FMR provides a benchmark for government-subsidized rents. Given the lack of specific market rent data, we must assume that the FMR is below market rates, which is generally the case. This assumption suggests that landlords participating in Section 8 would likely see a lower gross yield compared to market-rate rentals.
The missing renter density percentage and days on market (DOM) further complicate a full analysis. Typically, higher renter density and shorter DOM indicate a stronger rental market, which could influence the decision to participate in Section 8 versus renting at market rates. Since these figures are unavailable, we cannot definitively state which scenario is more realistic.
However, the FMR data allows us to infer that the gross yield from Section 8 participation would be based on the guaranteed $1060 monthly rent. This scenario offers stability and predictability for landlords, particularly if they are concerned about the volatility of the rental market or the difficulty in finding tenants.
Landlords should consider the trade-offs between the stability offered by Section 8 and the potentially higher gross yields from market-rate rentals. The decision ultimately depends on individual circumstances, such as property management capabilities and risk tolerance.
Data Sources: FMR data from HUD (2027).
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.