Location: Schoolcraft County, MI | Metro: Alger County, MI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $800 |
| 1 Bedroom | $950 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,440 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,070 for ZIP code 49884 will sufficiently cover the mortgage on a home priced at $179,330. Based on the data, the median monthly mortgage payment for a $179,330 home, assuming a 30-year fixed-rate mortgage at an average interest rate of 5%, would be around $940. Therefore, the FMR of $1,070 comfortably exceeds the mortgage payment, providing a buffer for other expenses such as maintenance, insurance, and property taxes.
The second objection concerns the adequacy of renter demand in ZIP 49884, given that only 18.6% of the population are renters. While this percentage might seem low, it's important to note that even a small percentage can represent a significant number of potential tenants. Moreover, the rental vacancy rate is 5.2%, indicating that the demand is steady relative to supply. A lower rental percentage does not necessarily imply weak demand; rather, it suggests a balanced market where landlords can still find tenants willing to pay the FMR.
The final concern is whether housing vouchers will keep pace with the market rents of $724. The voucher amount in ZIP 49884 is $710, which is close but slightly below the market rent. However, the voucher program has historically adjusted amounts annually based on inflation and local market conditions. This adjustment mechanism ensures that the gap between voucher amounts and market rents remains manageable. Additionally, many voucher holders are willing to accept properties below the maximum voucher limit, making them a reliable source of tenants despite the slight shortfall.
In summary, while some aspects of the data may raise initial concerns, the overall picture for ZIP 49884 is positive for landlords and small-portfolio investors. The FMR covers mortgage payments, the rental market shows a healthy balance, and voucher adjustments align closely with market rents.
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.