Location: Franklin County, IA | Metro: Butler 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 | $710 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,100 |
| 4 Bedrooms | $1,390 |
| 5 Bedrooms | $1,612 |
| 6 Bedrooms | $1,805 |
| 7 Bedrooms | $1,949 |
| 8 Bedrooms | $2,046 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $930 | $125,389 | 0.74% | D |
| 3BR | $1,100 | $148,802 | 0.74% | D |
U.S. Census Bureau data (2024)
Dumont, Iowa, located in ZIP code 50625, is a small-town neighborhood with a total population of 930 residents. Only 7.2% of these residents are renters, indicating a predominantly owner-occupied community. The median household income in this area stands at $64,250, suggesting a middle-class living standard. The median home value is $130,931, which reflects the affordable housing market typical of rural America.
The rental economics in Dumont, IA, reveal an interesting contrast. According to the Fair Market Rent (FMR) set by HUD for the metro area in fiscal year 2026, the FMR is $920. However, the actual market rent, as per the Census American Community Survey (ACS), is significantly lower at $550. This discrepancy highlights the potential for rental properties to be undervalued in terms of their subsidy potential under the Section 8 program.
Given these figures, Dumont, IA, may appeal to different types of investors based on their investment strategy. For hands-off operators who prefer to rely on government subsidies to cover most of the rent, this ZIP code could be less attractive due to the low number of renters and the disparity between the FMR and market rent. On the other hand, value-add buyers looking to renovate and increase property values might find opportunities here. They can leverage the gap between the FMR and current market rents to improve properties and charge closer to the subsidized rate, thereby increasing profitability while still serving the local need for affordable housing.
In summary, ZIP 50625 presents a scenario where the potential for rental income is limited but offers possibilities for those willing to invest in property improvements. It is a niche market that requires a strategic approach to capitalize on the available subsidies without overextending into areas with low demand for rentals.
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.