Location: Lucas County, 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 | $1,080 |
| 1 Bedroom | $1,110 |
| 2 Bedrooms | $1,450 |
| 3 Bedrooms | $1,950 |
| 4 Bedrooms | $1,960 |
| 5 Bedrooms | $2,274 |
| 6 Bedrooms | $2,547 |
| 7 Bedrooms | $2,751 |
| 8 Bedrooms | $2,889 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,950 | $337,358 | 0.58% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 50151 provides valuable insights into potential investment opportunities. To understand the gross yield, we need to consider both the Fair Market Rent (FMR) for a two-bedroom apartment and the market rent. The annualized FMR for a 2BR in ZIP 50151 for FY 2024 is set at $1080, while the market rent stands at $1,714 based on Census ACS data.
The median home value in ZIP 50151 is $259,464. Using the FMR, the implied gross yield is calculated by dividing the annual rent by the median home value. For the FMR scenario, this would be $1080 / $259,464 = 0.00416 or 0.416%. On the other hand, using the market rent, the implied gross yield is $1,714 / $259,464 = 0.00661 or 0.661%.
The difference between these two yields highlights the potential disparity between government-subsidized rents and market rates. Given the 12.5% renter density in the area, it's important to note that the number of days on the market (DOM) is listed as N/A, which means we don't have precise data on how quickly properties are rented out. However, the higher gross yield associated with market rent suggests a more profitable scenario for landlords and small-portfolio investors.
While Section 8 can provide stable income, the lower gross yield of 0.416% compared to the market rent's gross yield of 0.661% indicates that investing in properties outside of the Section 8 program could result in better returns. This analysis does not include operating expenses, so investors should adjust the gross yield according to their specific costs.
In conclusion, although Section 8 offers a reliable source of rental income, the gross yield based on market rent is significantly higher, making it a more attractive option for those looking to maximize their investment returns in ZIP 50151.
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.