Location: Kossuth County, IA | Metro: Humboldt County, IA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $690 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,160 |
| 4 Bedrooms | $1,300 |
| 5 Bedrooms | $1,508 |
| 6 Bedrooms | $1,689 |
| 7 Bedrooms | $1,824 |
| 8 Bedrooms | $1,915 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 50560 provides a clear picture of the potential rental income and yields under both government-subsidized and market conditions. The Fair Market Rent (FMR) for a two-bedroom apartment in the area, as determined by the federal fiscal year 2026 guidelines, is set at $920 annually. In contrast, the market rent based on Census ACS data stands at $833 per month.
To derive the gross yield, we annualize these figures against the median home value of $160,913. For the FMR scenario, the annualized rent would be $11,040 ($920 x 12 months), leading to an implied gross yield of approximately 6.86%. This calculation is straightforward: divide the annual rent by the median home value, and multiply by 100 to get the percentage. The formula is as follows:
(Annual Rent / Median Home Value) * 100 = Gross Yield
(11,040 / 160,913) * 100 = 6.86%
Under the market rent scenario, the annualized rent would be $9,996 ($833 x 12 months), resulting in an implied gross yield of about 6.21%. Again, applying the same formula:
(9,996 / 160,913) * 100 = 6.21%
The difference between the two gross yields is significant, with the FMR scenario offering a higher return on investment. However, the reality of the situation must be considered. With a renter density of 36.3%, it is evident that a substantial portion of the population in ZIP 50560 does not qualify for Section 8 subsidies due to income constraints or other eligibility criteria. Additionally, the N/A-day DOM (Days On Market) suggests that properties are either rented quickly or there is limited turnover data available, indicating that the market dynamics could favor either scenario depending on local conditions.
Given the data, the market rent scenario appears more realistic for most landlords and small-portfolio investors. While the FMR scenario offers a slightly better gross yield, the likelihood of securing tenants who qualify for Section 8 subsidies might be lower, especially considering the renter density. Therefore, unless a landlord has a specific interest in participating in the Section 8 program, the market rent scenario should be the primary focus for investment decisions.
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.