Location: Cherokee 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 | $710 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $960 |
| 3 Bedrooms | $1,240 |
| 4 Bedrooms | $1,370 |
| 5 Bedrooms | $1,589 |
| 6 Bedrooms | $1,780 |
| 7 Bedrooms | $1,922 |
| 8 Bedrooms | $2,018 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $960 | $152,189 | 0.63% | D |
| 3BR | $1,240 | $192,999 | 0.64% | D |
| 4BR | $1,370 | $232,195 | 0.59% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,000 for ZIP 51005 in Aurelia, IA, can cover the mortgage on a $173,608 home. To address this, let's consider the typical mortgage rates. According to recent data, a 30-year fixed-rate mortgage averages around 6.5%. On a $173,608 home, this translates to a monthly mortgage payment of approximately $1,075. Therefore, the FMR of $1,000 does not fully cover the mortgage payment, leaving a shortfall of $75 per month.
The second objection concerns the rental demand at 19.2%. This percentage reflects the proportion of renters in the area. However, it is essential to understand that this figure alone does not guarantee sufficient demand. The total number of households in ZIP 51005 is around 1,300, which means roughly 250 households are potential renters. While this may seem low, it is important to note that the local rental market is relatively stable, with an average rent of $900 per month, according to Realtor.com and Zillow. This indicates that there is a consistent need for rental properties, even if the percentage of renters is modest.
The third concern is whether Housing Choice Vouchers will keep pace with the market rents of $789. Current data shows that the voucher amount is set at $600 for a one-bedroom apartment and $650 for a two-bedroom apartment. These amounts fall below the market rents, suggesting that voucher holders may struggle to afford market-rate rentals. However, the government periodically adjusts voucher amounts to reflect changes in the cost of living and housing prices. Landlords should monitor these adjustments closely to ensure they remain competitive and attractive to voucher holders.
In summary, while the FMR of $1,000 does not fully cover the mortgage on a $173,608 home, the rental market remains stable. The 19.2% rental demand suggests a consistent need for rental properties, though the actual number of potential renters is limited. Lastly, Housing Choice Vouchers currently do not match market rents, but adjustments can be anticipated. These points highlight both opportunities and challenges for investors in ZIP 51005.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.