Location: Mecosta County, MI | Metro: Montcalm County, MI HUD Metro FMR Area
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 | $1,020 |
| 1 Bedroom | $1,070 |
| 2 Bedrooms | $1,290 |
| 3 Bedrooms | $1,650 |
| 4 Bedrooms | $1,820 |
| 5 Bedrooms | $2,111 |
| 6 Bedrooms | $2,364 |
| 7 Bedrooms | $2,553 |
| 8 Bedrooms | $2,681 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,650 | $213,146 | 0.77% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 49310 reveals key insights into potential investment opportunities. The Fair Market Rent (FMR) for a 2-bedroom unit in fiscal year 2024 is set at $930 per month, while the market rent, based on Census ACS data, stands at $1,047 per month. Using these figures, we can calculate the gross yields for both scenarios.
Annualizing the 2BR FMR at $930 gives us an annual rental income of $11,160. Given the median home value of $220,880, this translates to a gross yield of approximately 5.05%. In contrast, using the market rent of $1,047 results in an annual rental income of $12,564, leading to a gross yield of about 5.69%.
To determine which scenario is more realistic, consider the local renter density and typical days on market (DOM). ZIP 49310 has a renter density of 10.4%, indicating a relatively low proportion of renters compared to homeowners. This suggests that landlords might face challenges in finding tenants willing to pay market rates. Additionally, the absence of specific DOM data makes it difficult to gauge how quickly properties are rented out, further complicating the market rate scenario.
Given these factors, the FMR-based gross yield of 5.05% appears more realistic for landlords and small-portfolio investors considering Section 8 participation. While the market rate scenario offers a slightly higher gross yield of 5.69%, the lower renter density and uncertainty around DOM suggest that achieving market rents could be challenging. Landlords should therefore focus on the FMR-based yield as a more reliable benchmark for their investment decisions.
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.