Location: Marquette County, MI | Metro: Marquette 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 | $720 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,240 |
| 4 Bedrooms | $1,500 |
| 5 Bedrooms | $1,740 |
| 6 Bedrooms | $1,949 |
| 7 Bedrooms | $2,105 |
| 8 Bedrooms | $2,210 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,040 | $211,979 | 0.49% | F |
| 3BR | $1,240 | $259,346 | 0.48% | F |
| 4BR | $1,500 | $295,654 | 0.51% | F |
| 5BR | $1,740 | $350,830 | 0.5% | F |
U.S. Census Bureau data (2024)
A landlord considering purchasing a property in ZIP code 49866 (Negaunee, MI) for Section 8 must evaluate several factors to determine if it's a viable investment. The decision tree below outlines the key considerations.
Step 1: Determine if the Fair Market Rent (FMR) of $970 can cover the debt service on a property valued at $229,270. This involves calculating the expected monthly mortgage payment based on current interest rates and loan terms. For instance, with an average interest rate of 5%, a 30-year fixed-rate mortgage would result in a monthly payment of approximately $1,200. Since the FMR of $970 does not exceed this amount, the answer is No. The FMR is insufficient to clear debt service, making it a poor choice for a Section 8 investment in this scenario.
If the FMR were higher or the property value lower, leading to a positive outcome in Step 1, proceed to Step 2.
Step 2: Compare the market rent of $856 (as per Census ACS) against the FMR. In this case, the market rent is below the FMR, indicating that the rental income from non-Section 8 tenants might be lower than what the government will pay for Section 8 vouchers. This suggests a Yes for focusing on Section 8 tenants, as the government subsidy will likely provide better financial returns than the local rental market.
If the market rent were equal to or above the FMR, landlords would need to weigh the benefits of Section 8 versus traditional market rentals. This scenario would lead to an It Depends conclusion, as both options could be viable.
Step 3: Evaluate the rental demand. ZIP 49866 has a rental population of 17.1%. However, the Days on Market (DOM) for rentals is listed as N/A, which means there isn't sufficient data to determine how quickly properties are rented out. Given the limited information on DOM, the primary focus shifts to the percentage of renters. With 17.1% of the population renting, there is a moderate level of demand. This leads to an It Depends answer, as the demand is present but not necessarily robust without knowing the DOM.
To make a final decision, landlords should seek additional data on rental turnover and consider the stability of the Section 8 program in their area. Additionally, they should assess the local housing market trends and competition levels to ensure that the investment aligns with their long-term goals.
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.