Location: Grand Rapids-Wyoming, MI | Metro: Grand Rapids-Wyoming, 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 | $1,230 |
| 1 Bedroom | $1,290 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,000 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,290 | $182,066 | 0.71% | D |
| 2BR | $1,540 | $219,404 | 0.7% | D |
| 3BR | $2,000 | $265,229 | 0.75% | D |
| 4BR | $2,280 | $305,979 | 0.75% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate scenario for ZIP 49548, Kentwood, MI, can be analyzed using the Fair Market Rent (FMR) and the Zillow Observed Rental Index (ZORI). For a two-bedroom apartment, the annualized FMR is $1230 multiplied by 12 months, totaling $14,760. The ZORI market rent is $1,517 per month, which annualizes to $18,204.
To derive the gross yield, we use the median home value of $250,310. The implied gross yield based on the FMR is calculated as follows:
$14,760 / $250,310 = 0.059 or 5.9%
For the market rent scenario, the implied gross yield is:
$18,204 / $250,310 = 0.073 or 7.3%
The 7.3% gross yield derived from market rents is more realistic considering the 27.0% renter density and the 7-day days on market (DOM). A lower DOM indicates that properties are rented quickly, suggesting strong demand among renters in Kentwood. Given this high demand, it is reasonable to expect that most rental properties would command market rates rather than the lower FMRs associated with Section 8 vouchers. Landlords should aim for the higher gross yield to maximize returns on investment, while still being mindful of the potential challenges and requirements associated with accepting Section 8 tenants.
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.