Location: Delta County, MI | Metro: Alger County, MI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,090 |
| 1 Bedroom | $1,100 |
| 2 Bedrooms | $1,440 |
| 3 Bedrooms | $1,910 |
| 4 Bedrooms | $2,390 |
| 5 Bedrooms | $2,772 |
| 6 Bedrooms | $3,105 |
| 7 Bedrooms | $3,353 |
| 8 Bedrooms | $3,521 |
U.S. Census Bureau data (2024)
When considering whether to invest in ZIP code 49878 for Section 8 properties, follow this decision tree:
1) Does the Fair Market Rent (FMR) of $1,410 cover the debt service on a property valued at $208,631?
Yes: The FMR of $1,410 is sufficient to cover the debt service on a property costing $208,631. This indicates that rental income will meet financial obligations.
No: The FMR of $1,410 does not sufficiently cover the debt service on a property priced at $208,631. Consider lower-cost properties or those with lower financing costs.
It Depends: Evaluate the specifics of your mortgage terms. For example, if the interest rate is low, the FMR might still be adequate despite the high property value.
2) How does the market rent of $813 compare to the FMR?
Above FMR: The market rent is below the FMR, indicating that Section 8 tenants can pay more than what the average market demands. This could be advantageous for covering maintenance and other costs.
At FMR: The market rent is significantly below the FMR, which means Section 8 tenants will pay well above the market rate. This suggests a strong potential for profitability.
Below FMR: The market rent is lower than the FMR, meaning you'll be renting at below the maximum allowable rate for Section 8. While this doesn't affect eligibility, it does mean less potential income.
3) Is the demand sufficient with 3.4% of the population being renters and an unknown number of days on the market (DOM)?
Yes: If the DOM is relatively short and there's a steady stream of applicants, the 3.4% rental rate can support demand. However, the lack of DOM data makes this uncertain.
No: If the DOM is long, indicating slow turnover, the 3.4% rental rate may not be enough to ensure consistent occupancy.
It Depends: Without DOM data, the decision hinges on other factors such as vacancy rates and competition. A short DOM would suggest strong demand, whereas a long DOM would indicate the opposite.
Given these points, if the FMR clears debt service and market rents are below the FMR, then investing in ZIP 49878 is advisable. However, without DOM data, demand certainty is lacking. Evaluate further market conditions before making a final decision.
Data Sources: FMR data from HUD (2027). 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.