Location: St. Joseph County, 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 | $810 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,130 |
| 3 Bedrooms | $1,490 |
| 4 Bedrooms | $1,580 |
| 5 Bedrooms | $1,833 |
| 6 Bedrooms | $2,053 |
| 7 Bedrooms | $2,217 |
| 8 Bedrooms | $2,328 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,490 | $228,365 | 0.65% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 49072 provides a clear picture of the potential returns for landlords and small-portfolio investors. The Federal Market Rent (FMR) for a 2-bedroom unit in FY 2024 is set at $1030 per month, while the Census ACS reports the market rent at $994 per month. To derive the gross yield, we annualize these figures against the median home value of $204,496.
Using the FMR of $1030, the annualized income would be $12,360. This translates to a gross yield of approximately 6.05% when compared to the median home value. On the other hand, using the market rent figure of $994, the annualized income drops to $11,928, resulting in a gross yield of about 5.83%.
The difference between the two yields is marginal, with the Section 8 FMR providing a slightly higher return. However, the reality of the situation must be considered. ZIP 49072 has a renter density of only 9.9%, indicating a low demand for rental properties in general. This factor alone suggests that relying solely on the FMR might overestimate the actual rental income potential.
The N/A-day DOM (Days on Market) implies that there is insufficient data to determine how quickly rental units are leased in this area. This could mean either very quick leasing or significant vacancy periods, depending on local market conditions. Given the low renter density, it's prudent to assume that finding tenants may be challenging, making the market rent scenario more realistic.
In conclusion, while the Section 8 FMR offers a gross yield of 6.05%, the market rent scenario presents a more grounded expectation at 5.83%. Landlords and investors should prepare for potential difficulties in filling vacancies due to the low renter density, and thus, the market rent figure is likely a better indicator of sustainable rental income in ZIP 49072.
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.