Location: Sioux City, IA | Metro: Sioux City, IA-NE-SD MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,400 |
| 5 Bedrooms | $1,624 |
| 6 Bedrooms | $1,819 |
| 7 Bedrooms | $1,965 |
| 8 Bedrooms | $2,063 |
U.S. Census Bureau data (2024)
When considering whether to purchase a property in ZIP code 51030 for Section 8 investment, follow this decision tree:
1) Does the Fair Market Rent (FMR) of $910 cover the debt service on a property valued at $339,685?
No. The FMR of $910 does not sufficiently cover the debt service on a property priced at $339,685. Debt service typically includes mortgage payments, property taxes, insurance, and maintenance costs. With an average home value of $339,685, the monthly mortgage payment alone would likely exceed the FMR amount, making it challenging to meet all financial obligations solely with Section 8 rental income.
2) How does the market rent of $1,050 compare to the FMR?
The market rent of $1,050 is above the FMR of $910. This suggests that while you might struggle to cover costs with only Section 8 tenants, you could potentially attract market-rate tenants who would pay higher rent, thereby increasing your revenue and profitability.
3) Is there sufficient demand with 15.4% of residents being renters and the unknown days on market (DOM)?
It depends. While 15.4% of residents are renters, which indicates some demand, the lack of data on days on market (DOM) makes it difficult to assess how quickly properties are rented out. However, the presence of market-rate rents exceeding the FMR suggests that there is demand for housing, and you can cater to both Section 8 and market-rate tenants to diversify your income sources.
If the answer to question 1 is no, and you still wish to invest in this area, consider the following:
Attracting market-rate tenants to supplement your income.
Evaluating other factors such as location, amenities, and property condition to determine if the investment will be worthwhile.
Potential for rental subsidies beyond Section 8, such as local government programs.
In conclusion, while the FMR of $910 may not fully cover the debt service on a $339,685 property, the higher market rent of $1,050 and the presence of 15.4% renters indicate that there is potential for a successful investment if you can secure a mix of Section 8 and market-rate tenants.
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.