Location: Des Moines-West Des Moines, IA | Metro: Des Moines-West Des Moines, IA HUD Metro FMR Area
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 | $1,370 |
| 1 Bedroom | $1,420 |
| 2 Bedrooms | $1,690 |
| 3 Bedrooms | $2,310 |
| 4 Bedrooms | $2,360 |
| 5 Bedrooms | $2,738 |
| 6 Bedrooms | $3,067 |
| 7 Bedrooms | $3,312 |
| 8 Bedrooms | $3,478 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,420 | $252,288 | 0.56% | F |
| 2BR | $1,690 | $204,070 | 0.83% | C |
| 3BR | $2,310 | $304,901 | 0.76% | D |
| 4BR | $2,360 | $409,056 | 0.58% | F |
| 5BR | $2,738 | $546,571 | 0.5% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 50021, Ankeny, IA, reveals an interesting scenario when comparing the Federal Market Rent (FMR) to the market rent. For a two-bedroom unit, the FMR for fiscal year 2024 is set at $1380 annually, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1,353 per month, or approximately $16,236 annually.
To calculate the implied gross yield, we first annualize the rents. Using the median home value of $318,725, the gross yield based on the FMR would be around 5.27%. This is calculated by taking the annual FMR of $1380 multiplied by 12 months and dividing it by the median home value ($16,560 / $318,725 = 0.0527).
In contrast, the gross yield based on the market rent is significantly higher at 5.10%, calculated by dividing the annual market rent of $16,236 by the median home value ($16,236 / $318,725 = 0.0510).
Given the renter density of 25.5% and the days on market (DOM) of 49, the market rent scenario appears more realistic. The lower DOM suggests that rental properties in Ankeny are in high demand and can command closer to market rates. However, the slight difference between the FMR and market rent yields indicates that while Section 8 properties might offer slightly lower returns, they are still competitive within the local rental market.
Landlords and small-portfolio investors should consider these figures carefully. While the market rent provides a higher gross yield, the stability and predictability of Section 8 payments could offset the slightly lower return. Additionally, the 25.5% renter density implies a steady demand for rental units, making it a viable option for those looking to diversify their investment portfolio.
Investors should also note that the FMR is designed to cover only a portion of the rent, with tenants paying the balance. This means that the effective rent received from Section 8 participants will be closer to the market rate, enhancing the overall attractiveness of such investments in Ankeny, IA.
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.