Location: Mitchell County, IA | Metro: Mitchell County, IA
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 | $690 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,190 |
| 4 Bedrooms | $1,220 |
| 5 Bedrooms | $1,415 |
| 6 Bedrooms | $1,585 |
| 7 Bedrooms | $1,712 |
| 8 Bedrooms | $1,798 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,190 | $167,493 | 0.71% | D |
| 4BR | $1,220 | $234,796 | 0.52% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $920 for the metro area in fiscal year 2026 will sufficiently cover the mortgage on a property valued at $169,171. This concern is valid given that the FMR represents the median rent for a two-bedroom apartment, which may not align with the mortgage payments on a single-family home. However, the FMR does provide a benchmark for assessing the potential rental income, and it's crucial to consider the prevailing interest rates and mortgage terms when evaluating this aspect.
The investor could also be concerned about the limited renter demand in ZIP 50476, given that only 13.0% of the housing units are rented. This figure suggests a smaller pool of potential tenants, but it's important to note that a lower rental rate can also indicate stability and owner-occupied housing, which often correlates with lower vacancy rates and more consistent demand. Moreover, the demographic composition of the area, including age and sex distribution, can influence the rental market dynamics. The data indicates a very low population density, which might imply fewer competition among landlords and potentially higher occupancy rates for those willing to invest.
Another objection might revolve around the adequacy of Housing Choice Vouchers (Section 8) to keep up with market rents of $664. The voucher program aims to subsidize housing costs for eligible low-income families, but the actual amount paid out can vary based on the individual tenant's income and family size. While the voucher amount is designed to reflect the average market rent in the area, it may not always match the exact rent charged. Investors should review the local Section 8 payment standards to ensure they align with their expected rental income. The payment standards are typically updated annually and can be found on HUD's website.
In conclusion, while the data provides insights into the rental market and potential challenges such as limited demand and voucher adequacy, it's essential to conduct a thorough financial analysis that includes current interest rates, mortgage terms, and local housing trends. Additionally, understanding the specific characteristics of ZIP 50476, such as its low population density, can help in making informed investment decisions.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.