Location: Mitchell County, IA | Metro: Floyd County, IA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,360 |
| 4 Bedrooms | $1,630 |
| 5 Bedrooms | $1,891 |
| 6 Bedrooms | $2,118 |
| 7 Bedrooms | $2,287 |
| 8 Bedrooms | $2,401 |
U.S. Census Bureau data (2024)
A decision tree for whether to buy in ZIP code 50471 for Section 8 investment hinges on three key factors:
1. Does the Fair Market Rent (FMR) of $1,160 cover the debt service on a property valued at $159,562?
If the answer is yes, proceed to the next question. The FMR must sufficiently cover the mortgage payments, property taxes, insurance, and maintenance costs to ensure profitability.
If the answer is no, do not invest. A property valued at $159,562 would likely require a monthly payment higher than $1,160, making it unviable under Section 8 guidelines.
2. Is the market rent of $859 above, at, or below the FMR?
If the market rent is below the FMR, then it is favorable. This indicates that Section 8 tenants can afford the rent without exceeding their maximum allowable contribution, which is typically 30% of their income.
If the market rent is equal to the FMR, then it is neutral. The landlord will receive the FMR but will not benefit from any premium over the market rate.
If the market rent is above the FMR, then it is unfavorable. The landlord would be foregoing potential higher market rents and might struggle to compete with non-subsidized units.
3. Are the 18.7% of renters combined with the day DOM (Days on Market) sufficient to meet demand?
If the Days on Market is low and the percentage of renters is stable, there is enough demand. This suggests that rental properties are quickly occupied and that the rental market is healthy.
If the Days on Market is high and the percentage of renters is volatile, demand is insufficient. High DOM values indicate difficulty in renting out units, which could lead to vacancies and reduced cash flow.
If the Days on Market is moderate and the percentage of renters is consistent, demand is mixed. It depends on the landlord's ability to manage the property effectively and attract Section 8 tenants.
The final decision on whether to buy in ZIP 50471 for Section 8 investment is contingent upon these factors aligning favorably. If the FMR covers the debt service, market rent is below the FMR, and there is a steady demand with low DOM, then the answer is yes. Otherwise, the answer is no or it depends, based on the specific combination of conditions.
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.