Location: Clay County, IA | Metro: Buena Vista 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 | $700 |
| 1 Bedroom | $710 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,170 |
| 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 |
|---|---|---|---|---|
| 2BR | $930 | $123,704 | 0.75% | D |
| 3BR | $1,170 | $177,579 | 0.66% | D |
| 4BR | $1,220 | $225,161 | 0.54% | F |
U.S. Census Bureau data (2024)
In evaluating whether to invest in ZIP code 50585 (Sioux Rapids, IA) for Section 8 properties, follow this decision tree based on the provided data.
1) Does the Fair Market Rent (FMR) of $950 clear debt service on a property valued at $165,048?
No. The FMR of $950 does not cover the debt service on a property priced at $165,048. Assuming a standard mortgage rate of around 4%, the annual debt service would be approximately $6,602, or $550 per month. While $950 exceeds this amount, the analysis must consider other costs such as maintenance, utilities, and property taxes. These additional expenses often bring the net income below the FMR threshold, making it challenging to break even or profit solely from Section 8 payments.
2) Is the market rent of $612 above, at, or below the FMR?
The market rent of $612 is below the FMR of $950. This indicates that landlords can potentially receive higher rents through Section 8 compared to the local market rent. However, the difference between FMR and market rent alone isn't sufficient to determine investment viability without considering the demand for rental units.
3) Are 16.4% renters plus N/A-day days on the market (DOM) indicative of enough demand?
It depends. With 16.4% of the population renting, there is a moderate level of demand. However, the lack of data on days on the market (DOM) makes it difficult to assess how quickly rental units are occupied. A low DOM suggests strong demand, while a high DOM indicates weak demand. Without DOM data, landlords must rely on other indicators such as vacancy rates or local economic trends to gauge demand accurately.
If the FMR does not sufficiently cover all costs, landlords should consider:
In conclusion, ZIP 50585 presents a mixed picture for Section 8 investments. The FMR does not clearly cover debt service, but it is higher than the market rent, suggesting potential for higher income. Demand is moderate, but its strength requires further investigation beyond the provided data.
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.