Location: Lenawee County, MI | Metro: Hillsdale 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 | $770 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $1,100 |
| 3 Bedrooms | $1,380 |
| 4 Bedrooms | $1,460 |
| 5 Bedrooms | $1,694 |
| 6 Bedrooms | $1,897 |
| 7 Bedrooms | $2,049 |
| 8 Bedrooms | $2,151 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,100 | $172,086 | 0.64% | D |
| 3BR | $1,380 | $195,889 | 0.7% | D |
| 4BR | $1,460 | $220,713 | 0.66% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 49247 (Hudson, MI) provides insight into potential investment yields based on the Fair Market Rent (FMR) and market rent figures. Using the annualized 2BR FMR of $1,130 for fiscal year 2026, the implied gross yield can be calculated. This translates to an annual rental income of $13,560. Given the median home value of $195,919, the gross yield from the FMR would be approximately 7%.
Alternatively, using the market rent figure of $868, the annual rental income would be $10,416. This results in a gross yield of about 5.3%. The difference between these two yields is significant, with the FMR-based scenario offering a higher return.
The 15.6% renter density suggests that while there is a substantial tenant base, it is not overwhelmingly high, indicating that competition among landlords could be moderate. However, the lack of data on days on market (DOM) makes it challenging to assess how quickly properties might be rented out, especially under Section 8. Typically, a higher renter density would support faster leasing times, but without DOM data, we cannot draw definitive conclusions.
The FMR-based gross yield of 7% is theoretically possible if a landlord can secure a Section 8 tenant willing to pay the higher rate. However, the market rent-based gross yield of 5.3% is more likely to reflect actual conditions, considering the typical behavior of tenants and the current housing market dynamics in Hudson, MI. Investors should focus on the market rent scenario as a more realistic expectation, though they may find opportunities for higher yields through strategic property management and tenant selection.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.