Location: Plymouth County, IA | Metro: Plymouth 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 | $740 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $940 |
| 3 Bedrooms | $1,240 |
| 4 Bedrooms | $1,320 |
| 5 Bedrooms | $1,531 |
| 6 Bedrooms | $1,715 |
| 7 Bedrooms | $1,852 |
| 8 Bedrooms | $1,945 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $940 | $198,240 | 0.47% | F |
| 3BR | $1,240 | $274,599 | 0.45% | F |
| 4BR | $1,320 | $362,647 | 0.36% | F |
U.S. Census Bureau data (2024)
The Section 8 housing market in ZIP code 51038, which encompasses Merrill, IA, and parts of Plymouth County, presents a unique opportunity for real estate investors. The HUD Fair Market Rent (FMR) for the area, set at $1,040 for FY 2026, significantly exceeds the average market rent of $630 as reported by the Census Bureau's American Community Survey. This gap suggests that voucher tenants can cashflow comfortably in this region, even when renting properties at the higher HUD FMR rate.
To further analyze the investment potential, consider the median home value in the area, which stands at $277,976. Based on this figure, the rent-to-price ratio is approximately 0.23%, indicating that rental income is relatively low compared to property values. However, this does not necessarily detract from the viability of investing in this market, especially given the disparity between market rents and HUD FMRs. Landlords can expect a steady stream of income from voucher holders without the need to compromise on rental rates.
Regarding the rent-versus-buy dynamics, the median Days on Market (DOM) and percentage of price cuts are not applicable (N/A) for this ZIP code. This lack of data suggests a stable housing market where properties are likely sold quickly and without significant price reductions. Such stability can be beneficial for both landlords and small-portfolio investors looking to enter the market, as it minimizes the risk of holding properties for extended periods or facing substantial financial losses.
In conclusion, the strongest angle for real estate investors in ZIP code 51038 is cashflow. With voucher tenants able to cover rents at the HUD FMR rate, landlords can secure a reliable source of income without the need for premium units. This makes the area particularly attractive for those seeking consistent returns on their investments.
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.