Location: Marquette County, MI | Metro: Alger 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 | $830 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,680 |
| 5 Bedrooms | $1,949 |
| 6 Bedrooms | $2,183 |
| 7 Bedrooms | $2,358 |
| 8 Bedrooms | $2,476 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,190 | $228,236 | 0.52% | F |
| 3BR | $1,410 | $271,357 | 0.52% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate picture for ZIP 49885 (Skandia, MI) can be derived by comparing the Federal Market Rent (FMR) and the market rent against the median home value. For a two-bedroom unit, the annualized FMR for FY 2026 is $13,680 ($1,140 per month), while the annualized market rent based on Census ACS data is $12,900 ($1,075 per month).
Given the median home value of $230,189, the implied gross-yield for the FMR scenario is approximately 5.9%. This is calculated by dividing the annual rental income ($13,680) by the property value ($230,189). In contrast, the gross-yield for the market rent scenario is slightly lower at about 5.6%, computed by dividing the annual market rent ($12,900) by the median home value.
Considering the renter density of 3.4% and the fact that the days on market (DOM) is not available, it's important to evaluate which yield is more realistic. The FMR scenario, with its higher yield, might seem more attractive at first glance. However, the market rent scenario is likely more reflective of the actual rental environment in Skandia, MI, due to the low renter density. A 3.4% renter density suggests that most residents are homeowners, potentially leading to a less competitive rental market where landlords must offer closer to market rents to attract tenants.
Moreover, the lack of DOM data could indicate a slow-moving market, further supporting the argument for aligning with market rents rather than relying on the higher FMR rates. Investors should recognize that while the FMR provides a benchmark for potential rental income, the market rent offers a clearer picture of what is achievable in a real-world scenario with limited demand.
In summary, while the FMR yields a gross-yield of 5.9%, the market rent implies a gross-yield of 5.6%. Given the local context, the latter is likely more realistic for investment purposes in ZIP 49885.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.