Location: Pocahontas County, IA | Metro: Humboldt County, IA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,600 |
| 5 Bedrooms | $1,856 |
| 6 Bedrooms | $2,079 |
| 7 Bedrooms | $2,245 |
| 8 Bedrooms | $2,357 |
U.S. Census Bureau data (2024)
The ZIP code 50520, located in Pocahontas County, Iowa, can be an effective diversifier in a Section 8 portfolio strategy. The median income here is $73,750, which is notably lower than the state average. This makes it suitable for tenants who qualify for Section 8 housing assistance.
While the market data for ZIP 50520 shows a low median home value of approximately $46,500, this is actually a strength when considering it as part of a diversified investment portfolio. Such a low median home value suggests that the area may have limited appreciation potential, but it also indicates that the cost of entry into the market is relatively low, reducing the risk of significant capital loss.
The real estate tax burden in ZIP 50520 is also minimal, with property taxes paid for housing units being only around 1.1%, or roughly $542 per year. This low tax rate can help maintain positive cash flow for landlords, even if the area does not offer high rental yields.
A key consideration for including ZIP 50520 in a Section 8 portfolio is the 1.9% renter share. This means that a relatively small portion of the population rents, which could indicate a smaller pool of potential tenants. However, given the nature of Section 8 housing, where the government subsidizes rent for eligible low-income tenants, the demand for affordable rentals remains steady.
The Federal Market Rent (FMR) for the metro area in fiscal year 2026 is set at $920, providing a clear benchmark for rental pricing. Given the low median home value and the fact that market data is not readily available, it is advisable to rely on the FMR as a guideline for setting rents. This ensures compliance with HUD requirements and helps maintain a stable cash flow.
In conclusion, ZIP 50520 serves best as a diversifier in a Section 8 portfolio. Its low median home value and modest real estate tax rates make it a low-risk option for investors looking to balance their portfolios with properties that offer steady, if not spectacular, returns. The reliance on the FMR for rental pricing underscores the importance of adhering to government guidelines to ensure a consistent cash flow and avoid legal complications.
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.