Location: Tama County, IA | Metro: Waterloo-Cedar Falls, IA HUD Metro FMR Area
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 | $660 |
| 1 Bedroom | $730 |
| 2 Bedrooms | $950 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $950 | $139,095 | 0.68% | D |
| 3BR | $1,230 | $192,058 | 0.64% | D |
| 4BR | $1,590 | $245,563 | 0.65% | D |
U.S. Census Bureau data (2024)
The classification of ZIP 50638, Grundy Center, IA, hinges on the balance between yield and stability. With a Fair Market Rent (FMR) of $860 for fiscal year 2024, it stands out as a modest yield area, given that the median home value is $191,366. This suggests that rental income can be a significant portion of the property's total value, making it attractive for landlords seeking to maximize cash flow.
However, the stability of the market is a different matter. Only 18.1% of residents are renters, which is relatively low. This figure implies that there might not be a robust demand for rental properties, potentially leading to higher vacancy rates and increased competition among landlords. The lack of data on days on market (DOM) makes it difficult to assess how quickly rental properties can be filled, but the low percentage of renters indicates a less stable rental market.
Income levels provide another dimension to the analysis. The average income of $85,223 suggests that tenants have the financial capacity to cover rent, which could mitigate some risk. However, the low FMR compared to the home value indicates that the potential rental income might not fully offset the costs associated with owning a property in this ZIP code, especially if maintenance and other expenses are factored in.
Based on these figures, ZIP 50638 leans towards being a steady-cashflow zone rather than a high-yield/low-stability flip-style market. While the rental income provides a decent return relative to the home value, the lower percentage of renters and the average income level suggest a more stable environment where quick flips or speculative investments are less likely to succeed. Landlords should focus on long-term tenancies and properties that offer good value for money to attract and retain tenants.
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.