Location: Schoolcraft County, MI | Metro: Alger County, MI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,130 |
| 3 Bedrooms | $1,440 |
| 4 Bedrooms | $1,670 |
| 5 Bedrooms | $1,937 |
| 6 Bedrooms | $2,169 |
| 7 Bedrooms | $2,343 |
| 8 Bedrooms | $2,460 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 49895 reveals a nuanced picture regarding potential Section 8 investments. Based on the Fair Market Rent (FMR) for a two-bedroom apartment set at $1,110 annually (for fiscal year 2026), and considering the median home value of $234,165, the implied gross yield under the Section 8 scenario would be approximately 4.74%. This calculation assumes that the rental income is derived from a property equivalent to the median home value.
In contrast, using the market rent figure of $455 (from Census ACS data), the implied gross yield drops significantly to about 1.94%. This stark difference highlights the financial benefits of participating in the Section 8 program compared to standard market rents.
Given the 22.2% renter density in ZIP 49895, it's important to note that the demand for rental properties is moderate. However, the specific dynamics of Section 8 participation can vary widely based on local administration and tenant preferences. The lack of data on days on market (DOM) suggests that either such information isn't readily available or isn't tracked effectively for this area, which could imply that the rental market is stable but lacks detailed transactional visibility.
The higher gross yield of 4.74% under the Section 8 scenario makes it a more attractive option for landlords and small-portfolio investors looking to generate consistent returns. While the lower gross yield of 1.94% from market rents reflects a more challenging investment environment, it does not necessarily indicate poor performance; rather, it underscores the importance of understanding the specific benefits and risks associated with Section 8 versus traditional rental agreements.
Investors should weigh these gross yields against their own cost structures and risk tolerance. The higher yield from Section 8 is clear, but the decision also depends on factors such as property management requirements, tenant turnover rates, and local housing market conditions. For ZIP 49895, the Section 8 scenario presents a more favorable gross yield, aligning well with the moderate renter density and suggesting a potentially stable and lucrative investment opportunity.
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.