Location: Lenawee County, MI | Metro: Lenawee 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 | $730 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $1,050 |
| 3 Bedrooms | $1,350 |
| 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: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,050 | $125,518 | 0.84% | C |
| 3BR | $1,350 | $170,461 | 0.79% | D |
| 4BR | $1,460 | $185,995 | 0.78% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 49256 (Morenci, MI) provides valuable insights into potential investment returns. Using the Fair Market Rent (FMR) for a 2-bedroom unit set at $1,020 per month for fiscal year 2026, the annualized income would be $12,240. Against the median home value of $172,261, this translates to an implied gross yield of approximately 7.1%. This calculation is based on the assumption that the property's value aligns with the median home value and that the rental income is consistent with the FMR.
In contrast, using the market rent figure of $872 per month (as reported by the Census ACS), the annualized income drops to $10,464. This results in an implied gross yield of about 6.1% when compared to the median home value. The difference between these two yields highlights the impact of using FMR versus actual market rents in investment calculations.
Given the 20.2% renter density in Morenci, it is important to consider the likelihood of finding tenants willing to pay the higher FMR rate. The N/A-day Days on Market (DOM) suggests either very low turnover or incomplete data, making it difficult to assess how quickly a property might be rented out at either price point. However, the lower market rent figure of $872 is more likely to reflect the actual rental income one could expect in this area, given the current economic conditions and tenant preferences.
While the FMR-based yield of 7.1% is attractive, it is less realistic in practice due to the lower renter density and the possibility that market conditions do not support such high rental rates. Therefore, investors should anticipate a gross yield closer to the 6.1% derived from the market rent figure. This yield still represents a solid return on investment, particularly for those interested in long-term, stable rental income in a smaller market like Morenci, 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.