Location: Lenawee County, MI | Metro: Monroe, 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 | $860 |
| 1 Bedroom | $950 |
| 2 Bedrooms | $1,240 |
| 3 Bedrooms | $1,540 |
| 4 Bedrooms | $1,970 |
| 5 Bedrooms | $2,285 |
| 6 Bedrooms | $2,559 |
| 7 Bedrooms | $2,764 |
| 8 Bedrooms | $2,902 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,240 | $218,553 | 0.57% | F |
| 3BR | $1,540 | $319,440 | 0.48% | F |
| 4BR | $1,970 | $444,621 | 0.44% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 49267, Ottawa Lake, MI, provides insight into the potential returns for landlords and small-portfolio investors. Using the Fair Market Rent (FMR) for a 2-bedroom apartment at $1510 annually and the market rent at $866 annually, we can derive the implied gross yields against the median home value of $328,910.
First, consider the annualized Section 8 rent of $1510. This translates to an implied gross yield of approximately 0.46%, calculated as follows:
Next, using the market rent figure of $866 annually, the implied gross yield drops to about 0.26%. The calculation is:
Given that only 16.4% of residents in ZIP 49267 are renters, it is important to note that the likelihood of finding a steady stream of Section 8 tenants may be lower compared to areas with higher rental densities. Additionally, the absence of a specified Days on Market (DOM) indicates that there might not be enough data to determine how quickly properties are rented out, which could affect cash flow stability.
The gross yield based on Section 8 rent is nearly double that of the market rent, suggesting a potentially better financial performance for landlords who participate in the Section 8 program. However, the decision to enter such a program should also consider factors beyond just the gross yield, including tenant turnover rates, property management challenges, and the local demand for subsidized housing.
In conclusion, while the Section 8 scenario offers a stronger gross yield at 0.46% compared to the market rent's 0.26%, the actual performance will depend on the ability to maintain occupancy and manage the property effectively under the constraints of the Section 8 program.
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.