Location: Sioux County, IA | Metro: Plymouth County, IA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $870 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,500 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 51036 provides a detailed look at potential rental income scenarios for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area, as set by HUD for FY 2026, is $1,140 per month. This translates into an annual rental income of $13,680. When compared to the median home value of $341,536, the implied gross yield for a property rented under Section 8 is approximately 4%. This calculation is based on the FMR and does not account for any additional expenses such as maintenance, utilities, or property management fees.
In contrast, the market rent for a 2-bedroom apartment in ZIP 51036, according to Census ACS data, is $381 per month. This equates to an annual rental income of $4,572. Using the same median home value figure, the implied gross yield for renting at market rates is approximately 1.3%. Clearly, the Section 8 scenario offers a significantly higher gross yield when considering only the income generated from rent.
However, the choice between these two scenarios must be made with consideration of the local rental market conditions. With a renter density of 8.1%, it's evident that the majority of residents in ZIP 51036 prefer homeownership over renting, which could affect the demand for rental properties. Additionally, the lack of available data on the days on market (DOM) suggests either limited turnover or a stable rental market where vacancies are rare. Given these factors, the Section 8 scenario appears more realistic due to its higher rental income, which can better support the financial burden of owning a property in this area.
Investors should also factor in the administrative complexity and income stability associated with Section 8 tenancy. While the higher gross yield is attractive, the program's strict eligibility criteria and payment schedules might influence investor preference. Nonetheless, the comparative yields make it clear that Section 8 tenancy presents a more financially viable option for rental properties in ZIP 51036.
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.