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 | $840 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,520 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,210 | $218,550 | 0.55% | F |
| 3BR | $1,520 | $264,112 | 0.58% | F |
| 4BR | $1,590 | $313,686 | 0.51% | F |
| 5BR | $1,844 | $340,540 | 0.54% | F |
U.S. Census Bureau data (2024)
The analysis for the ZIP code 49286, which includes Tecumseh, MI, reveals a significant gap between the Fair Market Rent (FMR) set by the government and the actual market rent reported by the Census Bureau's American Community Survey (ACS). The FMR for the metro area in fiscal year 2026 is $1,160, while the average market rent is $1,008. This means that the FMR is $152 higher than the market rent, representing a 15.1% premium over the current market rate.
This premium makes ZIP 49286 an attractive yield play for landlords and small-portfolio investors willing to accept housing vouchers. The higher FMR allows landlords to receive a payment that exceeds the local market rate, thereby increasing their rental income and potentially their investment yield. In Tecumseh, where only 20.8% of residents are renters and the median home value stands at $259,523, landlords can leverage this discrepancy to ensure a steady and above-average income stream.
However, accepting housing voucher tenants comes with considerations regarding the cost of maintaining properties below the open-market rates. While the FMR provides a guaranteed income level, it also means that landlords must manage properties at a rate lower than what they could potentially charge to non-voucher tenants. Given that the median household income in Tecumseh is $72,429, landlords should be aware that the majority of voucher recipients might have lower incomes, necessitating careful tenant selection and property management practices to maintain profitability and property quality.
In summary, the gap between FMR and market rent in ZIP 49286 presents a clear opportunity for landlords who can manage the associated costs and risks. By accepting voucher tenants, landlords can benefit from a higher-than-market rental rate, making this a strategic move for those focused on maximizing yield in their real estate investments.
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.